'Chance of a Century': International Investors Flock to Tehran

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Since the West reached a landmark deal with Iran on its controversial nuclear program late last year, many Iranians are hoping for an end to sanctions. Western companies are also gearing up do big business.

Daniel Bernbeck has learned that in Tehran there's no point getting worked up about things like the gridlock between Gholhak, his neighborhood in the northern part of the city, and downtown, where his office is located. Here he is again, stuck in traffic, with everyone honking their horns. Tehran is a murderous city, says Bernbeck, even without international sanctions and threats of attack from Israel.

Bernbeck is sitting in a gray SUV. He's a wiry, tall blond man who wears lawyer-like glasses. The only departure from the standard business look is a narrow soul patch on his chin, which suggests a certain degree of individualism. His cell phone rings. Bernbeck's Iranian secretary is on the line. She's expecting him, and the deputy German ambassador has also arrived, along with two investment bankers from London and Hong Kong. They are asking about stock tips for Iran.

"Iranian stocks for Hong Kong?" Bernbeck exclaims with a grin, and then says in his best Farsi: "The same bankers would have said a year ago: You're crazy." Then he asks the driver to hurry up, although it doesn't do any good.

Bernbeck is the head of the German-Iranian Chamber of Industry and Commerce in Tehran. He paves the way for business ties in a country where Western politicians have been trying for decades to make such relationships impossible, especially since 2006.

At the time, the Islamic Republic started to rapidly expand its nuclear program. Intelligence agencies predicted that it would be only a matter of a few years before the Iranians had a nuclear bomb. Arab Gulf states in the region felt threatened, and Israel was determined to go to war with Tehran if a political solution could not be found quickly.

For over five years now, Bernbeck, 50, has been living between these two adversarial worlds, more specifically "on the dark side of Mars, where the cannibals and Holocaust deniers live." Bernbeck says that's how Iran is portrayed in the West.

Landmark Deal in Geneva

But his world has become much brighter since Nov. 24. That was the day when the five permanent members of the UN Security Council -- plus Germany and Iran -- signed a landmark deal in Geneva aimed at turning around the situation within the next six months. According to this agreement, Iran would roll back certain elements of its nuclear program and, in exchange, the West would ease economic sanctions.

Bernbeck believes in this possibility for a peace accord. Suddenly it appears to be there, the "chance of a century" that he has been waiting for, although this opportunity could still be dashed, like in 2005.

Back then, Iran only had a few centrifuges for enriching uranium, and negotiators were close to reaching an agreement that would have frozen its nuclear program at that level. But then the negotiations faltered and US President George W. Bush refused the deal.

Today, eight years later, Iran has over 19,000 centrifuges. So why should things work out now? Perhaps because this time both sides have made concessions on the issue. The Americans have dropped their absolute demand that the Iranians abandon their entire nuclear program. At the same time, Israel's threats of war and, above all, painful international sanctions have forced the Iranians back to the negotiating table.

For the past three years, there have been virtually no bank transfers between Iran and the outside world, and revenues from oil and gas sales have plummeted. Only the Chinese are still making purchases, but instead of paying in hard currency they are delivering only bulldozers and construction machinery.

Old Revolutionaries Are Skeptical

The sanctions have paralyzed Iran's economy. But Mohammed Hossein Rafi is one of the many Iranians who simply don't believe that. In fact, he says, the sanctions have only served to make his proud country even stronger.

Rafi ranks among the country's conservatives, the hardliners, the old faithful followers of Ayatollah Khomeini. He is sitting in the Iranian Artists' Cafe, and like most former revolutionaries, he wears his beard neatly trimmed around the chin. He keeps his cashmere coat on during the interview.

During the 1970s, he campaigned against the Shah, then fought in the Iraq-Iran war, and later had a long career with an Iranian intelligence agency. Now he is supposedly working at an institute for Islamic standards, which wants to create something akin to Germany's DIN industrial standards.

Rafi says that with the international pressure Iran has risen to become a leading country in the area of science and research. It has even discovered an effective AIDS drug, which will soon be presented to the world, he contends.

These are just some of the stories that war veterans recount in Tehran. The old revolutionaries take a highly skeptical view of the negotiations with their arch-enemy, the United States. They would prefer to see the negotiators fail. And the Revolutionary Guards' network, which was founded by Ayatollah Khomeini -- and includes Rafi -- still remains one of the most powerful organizations in Iran.

Rafi says that he doesn't believe in peace or the current nuclear negotiations: "Obama wants war," he says. Rafi maintains that 50,000 volunteers have already registered as suicide bombers, to be deployed if it should come to an armed conflict. But he refuses to divulge the identity of the organization that has recruited them.

Iran's new president, Hassan Rohani -- who the West is hoping has the strength to institute reforms -- will have to incorporate people like Rafi into his new Persia. Indeed, Rohani says that there should be no more "revolutions," but rather an "evolutionary process." It might be possible to win over the war veterans if they can benefit from future business deals, Bernbeck says.

Investors Flock to Tehran

Rohani needs economic success stories. He has to sweep aside the sanctions but, more importantly, move faster than inflation, which is eating away at the already meager income earned by millions of Iranians. The monthly minimum wage is only €140 ($190).

Iranians are suffering under the embargo, and they are not just holding the Americans responsible for this. The price of gasoline has multiplied; milk and cheese now cost three times as much as they did two years ago.

But it looks like the nuclear negotiations could spark an economic upswing in Iran. Although none of the sanctions have been lifted, droves of Western business people are already flocking to Tehran. Iran has the world's fourth-largest known oil reserves, and the second-largest gas reserves. Business deals worth billions of euros can be made here.

Bernbeck has finally arrived at the underground parking garage. He takes the elevator to the seventh floor, which is the home of the German-Iranian Chamber of Industry and Commerce. He lists the names of all the countries whose business people have already been here -- "except for the Germans again."

Bernbeck tells a story that he thinks perfectly illustrates the current situation in Tehran: Not a single top European official came to President Rohani's inauguration, as agreed by the EU member states' representatives in Brussels. But the very next day the government in Rome sent a high-ranking emissary to personally congratulate the new Iranian head of state.

Now the planes from Europe are "full of Italians," Bernbeck quips, including managers from Italian energy giant Eni. France is also on the move. In a deal worth billions, the French are about to renew their licensing contract for supplying Peugeot conponents to Iranian carmaker Iran Khodro. "And the Americans are already here with ExxonMobil, Chevron Corporation and other US companies," he says, adding: "They are responsible for renovating the old oil production facilities and refinery industry, as well as exploring new oil fields. That's a huge multibillion-euro business."

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1. optional
belfi 01/02/2014
Well, there are basically wrong assumptions in your article. And wrong assumptions won't lead one to "true" conclusions or understandings. Unless you mis-calculate, which makes your opinion even worse. When you call Persian Gulf with a wrong name, tells me you don't remember much from your school time. And when you talk about Israeli threats of war brought Iran back to table, tells me that you write texts based on news, not based on truth. You need to watch what is happening in reality, and then analyse it. Analyzing Hollywood-like news isn't a valuable job to be done.
2. US Exports
g.ly 01/03/2014
It seems the US has already started its export campaign: With snow !
3. optional
Fred 01/03/2014
Iranian wanted jobs just like everyone else. So a more transparent and open Iran should be welcome by the Iran people.
4. optional
spon-facebook-10000643357 01/03/2014
Peace means prosperity and business will produce new jobs. We need it as a German as we have no problem with Iran.
5. optional
vijay banga 01/07/2014
If Investors come to Iran it is a welcome step, in the process both , The Investors ,Iran , West Asia and the world at large will benefit so also chances of peace in the region may be closer due to new and expanding opportunities for local people
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