Not long ago, saying the word Iran was enough to send Western businessmen running for cover.
But events last weekend — when a package ofnuclear-related sanctions against the country were lifted — changed everything and Iran’s market potential is travelling through boardrooms quicker than lightning.
Its population now stands at more than 75 million, the largest in the Middle East and North Africa, with the exception of Egypt.
For months, bold executives have been hot-footing it to Tehran to make inquiries about setting up companies and offices to kickstart and expand trade.
Strike up a conversation with them and before long you hear expressions such as “first-mover advantage” and “untapped market”.
After years of tough United Nations sanctions, on areas such as banking, steel, shipping and aviation, the needs of the Islamic Republic are extensive and global companies are hoping to cash in on the expected trade boom.
And it is not just about pumping more oil.
“Iran is the market of the future. To put it in context, after 1989 when communism dissolved, did anyone really think it wasn’t worth entering Russia?” asked a European executive of a global pharmaceuticals company, which has maintained some trade with Iran under license from the US Treasury’s Office of Foreign Assets Control.
With the main sanctions gone, the executive, who requested anonymity, is frantically conferencing daily with his legal team looking at all the options for establishing a Tehran office.
“Iran is a major focus for our company and in a few years it should be the biggest market in the region by far,” he said.
‘Everyone who is waking up to Iran now is waking up late’
The announcements have already started, with German auto manufacturer Daimler revealing that it has reached agreements with two Iranian companies to establish a joint venture for the production of Mercedes-Benz trucks and power-train components and the creation of a sales company in Tehran.
There is a “huge demand for commercial vehicles, especially trucks,” head of Daimler’s truck and bus business Wolfgang Bernhard said.
If all goes well, its first trucks could be available in Iran by the end of the year.
Such demand also exists for commercial aircraft.
Having been banned from purchasing new passenger planes for decades, Iran’s fleet is in need of a complete overhaul.
Officials have said there is a need for the purchase of 400 planes over the coming years.
Not surprisingly, European aircraft manufacturer Airbus is about to supply 114 planes to state carrier Iran Air as part of plans to rejuvenate its business.
With major international companies aiming to follow Daimler and Airbus, the coming weeks and months will bring big announcements.
But the positive effects of sanctions relief may take time to turn into economic benefits for ordinary Iranians, warn some local executives who are also readying themselves for new opportunities.
“Right now, it’s all about engagement and assessment. There’s no boom yet but every day will look better than the day before,” said a member of a family business who spends his time between Tehran and London, and who is involved in negotiations to bring heavy equipment from Europe into Iran.
He believed that Iran would be posting strong growth of up to 5 per cent annually as investment snowballs by the end of 2016.
“Everyone who is waking up to Iran now is waking up late,” he said.
‘Rouhani has an impossible job. Iran is a mess’
For Iran, relief from the sanctions imposed in response to its rogue nuclear program gives it the chance to breathe fresh life into an economy that also suffered from serious mismanagement under former president Mahmoud Ahmadinejad.
As a result, many hundreds of thousands of Iranians lost their jobs as investment dried up and businesses folded under the trade restrictions imposed in late 2011 and early 2012.
What followed was a collapse of Iran’s currency and inflation that spiralled to more than 40 per cent, bringing desperate times to a country that has long enjoyed considerable wealth through its natural resources, strong manufacturing and well-educated population.
Elected by a landslide in 2013, President Hassan Rouhani vowed to reconnect Iran to the international community and bring employment and prosperity.
Two-and-a-half years on, he has accomplished what many thought was impossible by leading the Islamic Republic to a historic nuclear agreement and subsequent sanctions relief.
Now the hard work of rebuilding the whole country is underway.
“Today is just the start for an innocent person who was kept chained unjustly by the hands and feet for 12 years,” Mr Rouhani told a conference in Tehran two days after the announcement in Vienna that the sanctions had been lifted.
“Today our main problem is unemployment and recession, the lack of a booming economy and many structural and economic deficiencies.”
While Mr Rouhani’s government has stabilised the economy, the slump in oil prices from over $100 a barrel to under $30 has unleashed havoc on the national budget, forcing cuts that have brought Iran back to the edge of recession.
At the end of last year, unemployment crept up to 10.7 per cent, according to official figures. Independent economists said the figure is nearer 20 per cent.
The financial fissures created within Iranian society over the last few years will take a long time to fix.
“Rouhani has an impossible job. Iran is a mess,” said an Iranian expatriate based in Dubai who is helping businesses to invest in his country.
“This isn’t just about trade. We need to look back and feel proud of what we’ve done. That means we need to concentrate on creating jobs and building a future.”