As it was recently in the news, US have sent 400 Million Dollar in cash on pallets to Iran. Everyone was guessing about the circumstances of the deal and the possible conspiracies behind the deal. I think the topic with the pallets is worth to risk a closer look.
Lack of funds
The Iranian economy is, as all other economies in the world driven by the steady flow of money to finance growth. This growth gives the reasons for interest and raises of fortunes and most important, gives the people jobs and thus a measure for their living. What we see in Iran is mostly a lack of liquidity due to the problem of getting money undoubtedly correct into the country. This makes it not so easy for willing investors as they have to stay in line with all the rules also or mostly prevailing in the US.
Lack of acceptance
The other issue of entering the Iranian economy comes from the harsh rules of US government against cooperation with Iran. Despite the recently closed deal, we have
a lot of constraints for making business with Iran. One is shown very prominently within this news, as it is not allowed to transfer money between US and Iran. This reduces the acceptance for
open deals with Iran for all companies, having heavy stakes in the US.
400 Million problems for economy
In a nutshell it is maximal complicate to make business with Iran. It starts with a problem of smooth bank transfers, goes to the missing acceptance from US to this topic and has no end in the cultural differences between the so called Western economy and Iran. The way back to normal is much much longer as the way away from normal. What we see all day in supporting our ventures in Germany is always the same question mark on the people faces. This comes to an end only if Iran behaves like a poster child in all aspects and show Iranian business as best in class. This will also include the set up in terms of market transparency, corporate governance or minimizing of trade barriers.
Stay tuned
Yours K-Street6 team