Neither Western Nor Eastern
As Tehran signs an historic nuclear deal and Moscow takes increasingly drastic measures against the EU, Arash Azizi explores the different ways these megacities have evolved under sanction…
Words Arash Azizi
Illustration Anna Dunn
“This is an historic day,” said Federica Mogherini, the European Union’s foreign policy chief, as she read the joint statement of Iran and six other nations that had just concluded an historic nuclear deal. By her side stood Iran’s Foreign Minister Javad Zarif, who was, in that moment, celebrated as a national hero on the streets of Tehran by a jubilant population.
The deal runs to over 150 pages, but to most Iranians it means two simple things: lifting the sanctions that have crippled Iran’s economy in the last decade, and the beginning of more open relations with the West.
Our country has been in transformation since 1988, the year in which our devastating eight-year war with Iraq came to an end, beginning a gradual, if uneven, process in which the country put years of war economy, isolation and autocracy behind it. Older generations never tired of telling us how closed the war years were; there was scarcely any foreign programming on TV; there was rationing at shops; repression was at its height and even wearing a short-sleeved shirt could lead to an arrest.
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The Iran of the late 1990s became slightly more liberal — especially after the 1997 presidential elections gave rise to the reformist administration of Mohammad Khatami — but ours was still one of the most closed societies in the world. There was no McDonalds, no Hollywood movies, no credit cards. Owning a satellite dish was, and still remains, illegal. This situation was the result of a mixture of US sanctions against Iran and the self-isolating policies of a hardline section of the Islamic Republic’s establishment.
In June of this year, Tehran’s mayor Mohammad Baqer Qalibaf, got up on stage in the capital’s District Six to commemorate the opening of new projects there. When celebrating the achievements of his mayoralty — widely popular with Tehranis — he made an outlandish claim: “Despite shortages and problems, the economic sanctions have left no effect on the kicking and healthy city of Tehran.” According to him, Tehran is “an honour for Islam and Shiism”and“foreign guests” all admit that sanctions have had zero effect. Qalibaf ’s claim was astonishing, and a direct contradiction of previous statements both from himself and his deputies.
Qalibaf is hardly alone in dismissing the impact of the sanctions. On the one hand, to say that they have been effective is to attest to the success of the West’s strategy, countering the official line of the Islamic Republic. On the other hand, blaming sanctions for all of Tehran’s problems is often too great a temptation.
Qalibaf himself is a Tehrani and has now been running the city for ten years. He belongs to the conservative faction but is also an archetype of a technocratic politician found in many post-revolutionary societies, more interested in engineering than ideology. While Tehranis generally support the ‘reformist’ side of politics, Qalibaf has proven popular precisely because of his technocratic approach which recognises the need for foreign trade and acquisition of foreign technology. Rhetoric aside, his brand of technocratic city management has clearly suffered under sanction.
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But beyond Qalibaf, there is a Tehran that doesn’t pay much attention to its politicians, national or municipal. This is the Tehran of tech start-ups, underground music and idealist youth. Speaking to The Wall Street Journal, a director of Saba (a leading start-up) said that when Western companies stopped selling servers to Iran, he had to “rely on Chinese equipment of lesser quality.”
This reveals a dirty truth about the sanctions and Iran’s protectionist economic policies. Far from leading to the development of Iranian-made industry and technology, they foster a reliance on less sophisticated foreign suppliers.The Islamic Republic’s founding slogan was “Not Western; Nor Eastern”, yet those that make loud speeches against “relations with the West” are usually profiting from trade with nations like China and India.
The thrust of young Tehranis pushing against the sanctions is not a naïve belief in the miracles of trade with the West. It is a genuine drive for the development of their economy. Occasionally, it even becomes a point of pride: one look at Iranian social media shows many snarky comments against rms like Snapchat or Airbnb which, in compliance with sanctions, refuse to service Iranians. In one of the most patriotic nations on Earth, such issues quickly become a point of struggle.
If Iran experienced a gradual opening up after the end of their war, the process in Russia was a violent and turbulent after the collapse of the Soviet Union in 1991. Russian experiences of ‘open and free markets’ were such that many now support more protectionist policies. Ordinary Muscovites go to great lengths to maintain their indifference to current sanctions. But there are many reports that show the Russian economy is already recovering from the effect of Western sanctions imposed only a year ago, and that little of the population care about their government’s reciprocal banning of foreign food.
A report in Newsweek points to the city of Cherepovets, a stereotypically grey and industrial area dominated by a Soviet-era steelmaker. The report speaks of the unlikely thriving of the city and its steelmaker, Severstal, which has posted some of its strongest pro t margins in recent years. It supplies a Renault-Nissan auto plant which, in turn, plans to increase its exports to former Soviet republics in the Middle East and Africa. The initial fear of supermarket queues and the return of spekulyanty (black market suppliers) seems not to have materialised so far.
The major difference between Moscow and Tehran is that the former had the legacy of a non-capitalist economy for close to a century. Import-substitution tactics can therefore actually work to a degree. Iran’s volatile capitalism has never been replaced with anything like a planned economy, despite a large percentage of state ownership that has been incrementally decreased since the end of the war with Iraq.
Now that McDonalds has started accepting applications for franchisees in Tehran (albeit without an exact date for its market entry), many are excited. One of the most iconic images of the last years of the 20th century is one of Muscovites queuing for McDonalds in January 1990.The Soviet Union had yet to fall but the golden arches were a clear sign of what was to come. The comparison between Tehran and Moscow isn’t purely symbolic either; the $400 billion Iranian economy is, in fact, the biggest market to open up to foreign capital since the fall of the Soviet Union and China’s move to capitalism.
Tehranis enthusiastic about opening up to the world are unlikely to be thinking about the exact economic consequences. They want to use the same applications as the rest of the world, to order merchandise on Amazon and connect on global social media like their neighbours in the UAE and Turkey. But the actual effects of lifted sanctions threaten to be as big a disappointment as that flavourless Big Mac in Moscow, and Tehran’s long struggle for worldliness will continue to crawl.