The Joint Comprehensive Plan of Action (JCPOA), which the P5+1 (the five permanent UN Security Council members plus Germany) and Iran signed earlier this year, marked a watershed moment in international diplomacy. For 20 months, the P5+1 and Iran negotiated an accord to freeze Tehran's nuclear program in exchange for an unfreezing of Iran's economic relations with the world. At this juncture, many analysts are shedding light on the greater geopolitical implications of the nuclear agreement, the lifting of sanctions on the Islamic Republic, and how this will impact countries which complied with the sanctions regime, yet have an interest in exploring commercial opportunities in Iran.
Italian-Iranian relations are a case in point. From Rome's perspective, the JCPOA opened the door for many Italian firms to tap into the Iranian market. Tehran officials have long seen Italy as one of Iran's closest partners in the West. Undoubtedly, the level of trust between Iran and Italy is higher than between Tehran and most Western nations.
Not lost in the equation is the armed group Daesh ("Islamic State"), which considers its home in Iraq and Syria. Both Europeans and Iranians view Daesh as a grave menace to international security. Although the European Union and Iran have their differences with respect to the crises in Iraq and Syria, there is a growing call in European capitals for greater collaboration with Tehran in the international effort to counter the extremist group and its regional offshoots. Federica Mogherini, an Italian politician and the current High Representative of the EU for Foreign Affairs and Security Policy, articulated this position shortly after global powers and Tehran signed the JCPOA. Mogherini wrote, "Cooperation between Iran, its neighbors and the whole international community could open unprecedented possibilities of peace for the region, starting from Syria, Yemen, and Iraq."
Earlier this month, Gulf State Analytics sat down with Cinzia Bianco, an Italian expert on Middle Eastern geopolitics, to discuss the context in which Italians and Iranians eye opportunities to pursue a mutually advantageous relationship in 2016 and beyond.
The text of the interview follows:
Gulf State Analytics: Iran has a relatively untapped market of 78 million people and a USD 400 billion economy. As European companies eye post-sanctions opportunities in Iran, what role do Italian firms see for themselves as Iran slowly reintegrates with the global economy? Who are the actors in Italy most interested in moving into Iran's economy?
Cinzia Bianco: Indeed, Italian firms are eager to capitalize on the lifting of sanctions against Iran and fully exploit the country's economic potential. Traditionally, Italy's long-standing and diversified economic relationship with Iran has been centered around the petrochemical sector and related services, as well as the steel, mining, automotive and machinery sectors.
Relatively untapped promising sectors include transportation and infrastructure. Major Italian firms in these sectors have had a long-standing presence in Iran and they were more reluctant to comply with the sanctions. At this point, they are ready to get back in business. Some of the big Italian companies include Alitalia, which had a good presence in the logistics sector; Danieli, a major global player for plant making in the steel industry; multinational corporations specializing in engineering and construction for oil and gas projects such as Snamprogetti and SAIPEM (both subsidiaries of the energy major ENI) - and Tecnimont SpA, which since last March has allegedly been involved in preliminary talks regarding the realization of auxiliary infrastructures for the petrochemical complex in Asaluyeh, southern Iran - and Ansaldo Energia, an integrated operator for power generation plants. In addition to that, being rich in mineral resources such as lead, zinc, iron, and copper, the mining industry and its ancillaries are also looking at Iran with tangible interest, both as an investment spot and as a source of import. The food industry seems promising in both directions. Iran still has a sizeable portion of unexploited arable land, which might be of interest to Italian investors, and it is a big market for the export of Italian food. Finally, in addition to the big multinational companies, countless small and medium sized-enterprises are examining ways to tap into Iran's market, in particular as a market for the export of "Made in Italy" products of the most diverse categories - from the usual textile and fashion, to luxury goods, to technology, and to medicine.
Gulf State Analytics: Before the UN Security Council imposed economic sanctions on Iran in 2006, Italy was one of Iran's most important trade partners. How did sanctions impact Italian-Iranian relations?
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