Iran open for business, but West still wary

As 1600 political leaders, global tycoons and celebrities descend on the Swiss resort town of Davos for the annual meeting of the World Economic Forum, one delegation could try to rebrand itself.

Iranian President Hassan Rouhani will court global business this week after winning an easing of some economic sanctions, but any trade bonanza depends on the long-term success of nuclear diplomacy.

A US stranglehold on Iran's access to the international financial system, the uncertain future of talks on its nuclear programme beyond a six-month initial deal, and vested interests in the Islamic Republic suspicious of Western investment all stand in Rouhani's way.

"I would be surprised if you saw Iran shooting quickly to the top of the list of attractive markets, though it may be attractive for certain manufactured goods companies in the short to medium term," said a Western business consultant.

"The fact that Iran is making signals in the right direction is welcome but I think the bulk of business people will be cautious and will play a bit of a wait-and-see game," he said, asking - like many involved with Iran - not to be identified due to the political sensitivities.

After a charm offensive at the UN in September, Rouhani opens Act Two of Teheran's return to the international stage when he addresses the World Economic Forum at the Swiss resort on Thursday, an event that attracts political and business leaders from around the world.

The White House released a summary last Thursday of November's interim deal between Iran and six world powers, under which Iran agreed to stop production of 20% enriched uranium by January 20.

In return, some sanctions imposed over the nuclear programme - which Western countries suspect is aimed at developing arms despite Iranian denials - will be relaxed from today.

In the short term, business opportunities are limited mostly to areas such as food and consumer goods, medicines, cars and petrochemicals under the interim accord.

But the potential of a market of 76million people in a country with some of the world's biggest oil and gas reserves is a magnet for foreign firms seeking long-term opportunities.

Bijan Khajehpour, a Vienna-based Iranian business consultant, said there were the beginnings of a "gold rush" mood in Teheran, with Russia and China racing to pin down oil-for-goods barter deals before Western companies arrive with the technology that Iran most wants.