New Iran Funds Show Frontier Challenges

There’s nothing wrong with what the fund is doing and it may well be very successful: Turquoise has been working on ways to get foreigners into Iran for years and produces some of the best research in the country. But it helps us to see that simply lifting European (not American) sanctions and turning Swift back on is a gross simplification of an exceptionally complex situation that will take years to find normal routines and practices.

In fact, an open Iran faces challenges both at this irksome technical level and at the grandest reaches of geopolitics. Having spent years trying to get Americans and Europeans onside, Iran may now face just a big a challenge having fallen out with Saudi Arabia. More than one institution with the potential for business in both Iran and Saudi has told Euromoney that it must steer clear of Iran for the moment, for fear of losing Saudi business.

At least one major UAE bank is known to Euromoney to be all set to go back in to Iran – which is no surprise, as Dubai has served as its entrepot right through the sanctions years – but wants explicit approval from the Central Bank of the UAE first. It is unlikely to get that blessing any time soon as the UAE is unavoidably linked to its bigger neighbour in Saudi Arabia and doesn’t want to irritate it.

Any look at market valuations, mineral wealth, the standard of national education or any of a dozen other metrics will make it clear that Iran is a vast opportunity. But realising that opportunity, from within or without, is never going to be straightforward.