Iran tackling its problems well

Despite all odds against it, Iran seems to be doing reasonably well in terms of economic development since the withdrawal of sanctions by the West after signing of a nuclear agreement with the UN Security Council's 5 veto powers plus Germany under the UN sponsorship in June 2015. However, Washington's refusal to withdraw all sanctions and unfreeze its assets (held since the emergence of the Islamic Republic in 1979) even after the nuke deal became operational in January 2016, is halting its speed of recovery.   
The official name of the Iran nuke deal is the Joint Comprehensive Plan of Action (JCPOA) and it has the potential to dramatically change Iran's economic capabilities in the near future. Its successes, however, largely depend on actions to be taken jointly by all concerned.
A Reuters report from Tokyo on July 01 said that while Iran's oil exports have nearly doubled since December 2015 before sanctions on its disputed nuclear programme were lifted, it is also facing tough competition from its rivals Saudi Arabia and Iraq.  Another report from London pointed out that the US energy majors such as ExxonMobile and Chevron are waiting in the wings because Washington still maintains sanctions prohibiting US entities from dealing with Iranian companies.
However, the US stand on the issue does not appear to be honest and has proved to be duplicitous. It has allowed the giant American aircraft manufacturers Boeing to complete a provision of a huge multi-billion dollar deal to sell close to 100 commercial planes to Iran's national carrier Iran Air after the nuclear accord. Apparently this was done to beat Boeing's arch European rival Airbus. It simply explains that the US government is only exposing its two-faced policy of greed and moral bankruptcy.
Effectively lifting of Western sanctions on Iran in January this year was to unfreeze billions of dollars of overseas assets and allow oil to be sold globally which cost Iran over $160 billion in oil revenue since 2012.
It is difficult to explain why the US, the leader of the Western alliance, after years of hard negotiations to reach the JCPOA agreement with Iran, is refusing to fulfil its part of the bargains. This US policy ambiguity has resulted in lowering Iran's total crude oil exports in planned July shipments to 2.14 million bpd from 2.31 million bpd in June this year. Only consolation is that this figure is 70 per cent higher than a year ago.
However, records say that its oil shipment to Asia in July will remain at June's level at 1.63 million bpd. China, the largest buyer, will pick up 50,000 bpd more to 654,000 bpd while India will import 480,000 bpd, the highest since March. South Korea is to increase import in July to 235,000 bpd against June's 190,000 bpd. Greece, Italy, Spain and Turkey are also importing oil from Iran.
RISING FDI, POPULATION AND FUEL CONSUMPTION: While foreign direct investment in Iran is rising faster than before, it is also facing a serious dilemma with its fast growing population and internal oil consumption. During the first quarter of 2016, 22 FDI projects were registered compared to only three in 2013, 8 in 2014 and 9 in 2015. These projects involve in automobile, business services, consumer electronics and textile sectors.  South Korea and Germany together committed investment worth $2.15 billion.
Informed sources claim that some details about South Korean investment in Iran are now available. South Korea's major steel producer Pohang Iron & Steel (POSCO) - the single largest investor with $1.6 billion - is to build an integrated steel mill in the Chabahar Free Trade-Investment Zone by March 2017. Posco's subsidiary, Posco Energy has entered into a memorandum of understanding (MoU) with Iran-based PKP to build a 500MW gas-based power plant using gas generated during steel making nearby.
Besides, 19 more foreign investors have signalled their interest in investment - a 90 per cent increase over 2015. Informed observers say, this trend, despite apparent US opposition, is likely to continue. Strong lobbies, headed by Israel and Saudi Arabia, are working overtime to offset this trend.
Meanwhile, a baby boom resulted in Iran after the Islamic Revolution in 1979, a decision seemingly prompted by the huge casualty incurred during the long-drawn, brutal war with Iraq (imposed by Iraq with US encouragement) has doubled its population. According to a CIA report, Iran's population was 35.7 million in 1979 which has now increased to 81 million. This has put a tremendous pressure on its economy and increased local petroleum consumption making it the second largest oil consumer in the region after Saudi Arabia.
To cushion the sufferings of the people from the prolonged war, Iran had introduced a cost of living subsidy in 1980 keeping gasoline price low. This encouraged oil consumption and put demand for automobiles. In the process, pressures were built on oil industry, in particular, on refining capacity. An OPEC estimate says, Tehran took up a massive project to increase the country's crude refining capacity in the 1990s and it now can produce two million bpd refined petroleum, though much of it low value product. To meet the burgeoning demand, according to a report by the US Energy Information Administration (EIA), it is importing 61,000 bpd refined petroleum.
REFORMS AND OIL INDUSTRY'S INVESTMENT NEEDS: Despite the apparent contradictory statements appearing in the media, Iran's programme to overhaul its energy infrastructures - that began before the nuke deal was signed - continues. Iran is also focusing to reform its wasteful and monopolistic auto industry and there is a social movement on to dump the gas-guzzling 'Zero cars' and thousands of people have vowed to 'No Zero cars' campaign until safety and fuel standards were improved. Closure attention is now being given to help restrict domestic demand for oil. But to turn oil production around and upgrade refining capacity will need huge investment from outside.
In late November 2015, in anticipation of sanction withdrawal after the nuke deal was signed in June, representatives of over 150 companies from Europe and Asia flocked to Tehran. Some of the attendees were from the world's largest energy companies. According to US Energy Information Administration's data analysis in July 2015, a total of $30 billion worth of contracts were offered by the Iranian government. Actually, Iran hoped to attract $150 billion new investment over the next five years. Given the enthusiasm shown in the November meeting by the foreign oil companies, this was no idle dream. However, none of these would be possible without normalisation of ties between Iran and the West, which actually hinges on Washington's decision whether it wants to implement the deal it signed along with its allies and Russia and China.
Meanwhile, the decision to overhaul Iran's deteriorating infrastructure is continuing despite all uncertainty about major inflow of FDI. Earlier in January this year, Iranian firms and Russian shipbuilders have entered into several deals to construct a series of new off-shore drilling rigs. China, Iran's largest Asian oil buyer, has already established direct train services to Iran to bolster the fast growing bilateral trade between the two countries. This is, in fact, part of China's Road and Belt initiative.  
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