GSL’s president spends a few words to introduce us to her lived experience in approaching a country system that has been under the bull’s eye of the international policy landscape for a couple of years now. Does what you read, coincide with firsthand experiences? Let’s hear, what does Ms. Cagliani think about it?
1. When and why did GSL start looking at the Iranian country system? How did the idea of building business with Iran come about?
Already since after the 2008 recession, we have been reflecting that the European market was mature and an outlet should be sought elsewhere. After some experience spent with mixed success in the CIS area in 2013-2014, we began to look with interest at the Middle East region of the Persian Gulf starting in 2015. The signing of the G5+1 Rome Accords certainly opened a window on a world that had been segregated for decades and corroborated our intentions of exploration and knowledge in an important way.
It was in the year 2016 that we began to take our first steps toward the Iranian market. Our choice was dictated not only, of course, by the climate of great international openness and détente resulting from the Rome agreements of May 2015, but above all by the preliminary research and analysis we carried out which, showed us the features of a market extremely rich in interesting development potential. In May 2016 when we crossed the Iranian border for the first time we found a climate of great excitement and enthusiasm and great expectations for the conclusion of the long period of international isolation.
The Iranian economic picture appeared to me from the outset to be in a constant struggle to climb back up the slope, scarred, first, by the eight-year war with Saddam’s Iraq, and then by the embargo imposed by the United States in 1995, an embargo partly ignored by many European, Asian and Middle Eastern companies that, in recent years have nonetheless found ways to take advantage of the country’s resources, especially energy and industrial resources. The recovery, at that time appearing to me as “galloping” after the recent détente at the international level, still suffered from a little bit of general rigidity, but conveyed very strongly and vividly the image of an extremely rich and inviting commercial and industrial landscape in every respect.
2. What scenario did you find during your visits? Is there really a problem of human rights violations? How do Iranian citizens live and work? Have you ever found yourself in difficult situations and with restrictions? What myths can you dispel about Iran? To hear the international propaganda, it sounds like it is hell on earth….
The scenario found was not at all one of fear or closure, rather people eager to have contacts and relationships.
Although my sojourns have not exceeded ten days, I can say with a good approximation of certainty that, life in Iran is not at all uncomfortable or even less risky (as it is often let on in Europe). In Tehran, a city that I have experienced the most in my travel experiences, the city parks are populated until late in the day by athletes working out, citizens devoted to relaxing and reading, or even families with children. I certainly do not have to be the one to point out how in some Italian urban areas, unfortunately the reality is sadly different.
In the country, I have grasped, from my first experience living in 2016, a very strong sense of legality. The legal framework is strong and comprehensive and is enforced with irreproachable rigor. In this sense, common delinquency (while obviously present) is a truly sporadic and occasional phenomenon. The Iranian legal system even provides for capital punishment for certain types of crimes, and this is also the case in highly civilized Japan, in the Chinese and American super-powers, or even in Thailand or India.
Regarding the sociality and living conditions of the Iranian citizen (and also of the host) there are several beliefs dictated by Western biased information to be firmly refuted. First and foremost, I must say that public transportation (I am always referring to Tehran) is distinguished by cleanliness, orderliness and punctuality (almost like by us in Italy…). No trace of beggars or homeless people, no marks on walls or carriages, seats intact and clean. There are carriages dedicated to women (as in Japan), mixed carriages for families and for men with the rule of giving precedence to women to make them sit down (because, unlike with us, the rules of courtesy and good manners are generally respected). Another false myth to fail is the one related to clothing. Since I happened to make stays (even of medium length) during the summer season, I wanted to inquire about what was possible or not possible to do. The recommendations were to wear, as a woman, pants or long dresses possibly with simple and unelaborate patterns and to cover (even symbolically) the head with a scarf. Men, on the other hand, have more freedom: sandals, shorts (up to the knee) and short-sleeved shirts or T-shirts are allowed.
I conclude, with a general overview of the status of women, again often pointed to particular deprivations. Women are generally quite free. I have seen with my own eyes people with even flashy makeup or colorful hair walking serenely in the city center . Instead, the idea I have gradually formed is that, it is the male figure who is most oppressed. For under the Mehr Law, the man must provide the woman with the same standard of living that the woman had before she married. If this standard is lacking, the woman can demand payment of the difference. Again: Iranian law stipulates that upon the husband’s death the estate goes to the wife, while upon the wife’s death the estate goes to her family, not to the widower. Men retire at 60, women at 55. If the woman does not marry, she can continue to receive her father’s pension even after her mother’s death (this type of survivorship is, of course, unknown in the West).
3. What is the current situation of the country, which will approach the very tough new U.S. sanctions plan in these days, politically, socially, commercially and industrially?
The landscape we have experienced from 2016 onward is very reminiscent of that of the 1960s in Italy, , but with the difference that the cultural level of people is still very high. The schooling rate is extremely high and often reaches the completion of the university academic course, carried out both in the country and abroad (mainly in the United States, but also at European universities). Undoubtedly, the changeover, which took place in early 2017, in the White House has produced results that are far from positive. The Obama-promoted détente developments toward the Rohani government have been partially undermined by the sudden tightening imposed by the new Trump administration. Without futile sugarcoating, we can safely say that this new and unexpected negative development turns out to be bad news for the entire industrial and manufacturing sector, which is moreover put in enormous difficulty by the continuous and brutal fluctuations of the local currency that really make any negotiations with the outside world complicated.
That said, my most recent trip last summer, which coincided temporally with the launch of the new economic-financial sanctions measures, led me to understand, including through talking with several local players, how the country system was preparing for the new squeeze brought by the Trump administration. In this sense, the strategy that the Iranian government is preparing to weather the incoming storm from Washington seems to be based on trying to shield its economy from the effects of sanctions at least until the end of Trump’s term. It is a return to the concept of a “resistance economy,” introduced by Ayatollah Khamenei in 2012 in response to Western sanctions. According to this concept, the country should focus on its domestic capabilities to resist external pressure: producing domestically instead of importing, introducing systems of exchange in goods instead of currency, relying again on trade triangulations through third countries to obviate financial isolation. In essence, the Rohani government drew heavily on trends adopted in 2012, the year before the start of the negotiations that would lead in November 2013 to the signing of the interim nuclear agreement and in July 2015 to the final JCPOA.
However, the differences from six years ago are quite marked. First and foremost, the U.S. is now alone in its punitive grip on Tehran. The European Union will align itself only in form with U.S. demands, while simultaneously seeking to safeguard the economic and trade channels built over the past two years with Iran. This element, coupled with the complete absence of U.N. sanctions, leads Tehran to a certain awareness that other countries, primarily the EU, are trying to equip themselves with means to circumvent the U.S. monopoly, while other countries, such as India, China, and Russia, do not seem willing to comply even in the first instance. There is, moreover, an awareness that economic indicators are bound to worsen in the immediate future – witness the depreciation of the rial we have been witnessing since the beginning of the year already – but overall this worsening is taking place within a macroeconomic framework that is more solid than that of 2011-2012. The unemployment rate has dropped to 11 percent today, there are $130 billion in reserves in the treasury, $30 billion more than in 2012.
As far as we are concerned, at this time we reconfirm the interesting overall potential of the market and also the presence of important commercial spaces for both passive and active development. At the time I am speaking we have a few projects in the embryonic stage, but nothing concrete, established and functioning.
4. What do you expect next in international relations between the West and Iran? In particular Italy with its trade relations?
My hope is that, after these certainly not pleasant moments of confusion and instability have passed, it will be possible for our country to maintain the development commitments it has made to Tehran in building trade and industrial communication relations that are extremely important to both of us. I personally find the embargo to be a solution out of the time dimension of today’s world. I believe that governments must work to free economic frameworks from these levies that are bound to affect negatively . Present times, ways and capacities are compatible for building a long-term trade relationship that can greatly benefit both our country and the Iranian country system; my hope is that this will be made possible by those who “govern” world balances.