January 23, 2014 | Quote
Rouhani Does Davos
Nothing better sums up the disastrous Obama administration’s Iran policy than the Davos invitation extended to Iranian President Hassan Rouhani. Once President Obama bragged that Iran was “isolated.” Now the United States is, while, as two sanctions gurus from the Foundation for Defense of Democracies (FDD) put it, Rouhani is “yucking it up at Davos this week, munching canapés, shaking hands and cutting deals with the global business elite.” In stiffing the Green Revolution, treating Iran’s regime as legitimate and its human rights policy as not germane to any talks and easing sanctions on the regime, Obama has given Iran a new economic and political lease on life.
What impetus is there for Iran to capitulate — finally meet our demands for destruction of its illegal nuclear weapons program — when sanctions are lifting and businessmen are eagerly eying their Tehran prospects? FDD’s Mark Dubowitz and Emanuele Ottolenghi explain that the sanctions relief is much bigger and more significant than the administration let on:
A cash infusion of $7 billion into Iran’s troubled economy might not sound like a lot in today’s world. But it represents roughly 35 percent of Iran’s fully accessible overseas cash reserves, which are estimated at $20 billion. And the sanctions relief figure might be much higher and more difficult to reverse.
For one, the $7 billion figure does not factor in the psychological impact the Geneva deal has had on markets, businesses, and investors.
Before Nov. 24, when the framework agreement was signed in Geneva, even those who could conduct legitimate business with Iranian counterparts were hesitant to do so. Driven by fear of economic loss and legal sanctions, they were risk averse. The world had built an economic minefield around Iran that most businesses were loath to risk exploding.
The tide may now be turning. Though many legal restrictions remain in place, sanctions are as much about psychology as legalities. Greed is starting to overcome fear.