Jim Armitage: Iran has come a long way in its relations with the West, but trade is still a bridge too far. Yet perhaps business links are just what it needs

Global Outlook A few months back this column explored some of the risks facing Western companies seeking to get back into corruption-prone Iran.

That was just before Isis began making its lightning-fast gains in Iraq. Now, Iran looks ever closer to coming off the Western sanctions list as America and Europe realise they need a powerful political ally to help them deal with the chaos in the region. All members of the current coalition of the willing against Isis know bombing alone will not extinguish the hellfires of Iraq and Syria.

It’s a measure of how far Iran has come in its relations with the West that its reformist President Hassan Rouhani was speaking this week at the United Nations in New York, where he was courted by Western diplomats.

It was just such an address at the UN last year that paved the way for his phone call with Barack Obama that spawned the current round of talks to ease sanctions and curb Iran’s nuclear ambitions.

The road to normalisation of trade relations is hardly a freshly surfaced autobahn, though. While progress is being made on the nuclear issue, vocal opponents to a deal, particularly from Israel, say sanctions should remain due to Iran’s alleged support for terrorists. And, of course, a powerful liberal lobby warns of Iran’s extreme human rights abuses.

Some very limited business is allowed currently by US and European countries, but a ban on banks providing support for such transactions has, in reality, made trade too risky for most in the West. Any big bank considering taking a gamble certainly will not after seeing the multibillion-dollar fines on those that did.

Esfandyar Batmanghelidj, a young American-Iranian entrepreneur based in London, tells a typical story. His family’s attempts to export Western quit-smoking treatments to nicotine-addicted Iranians got off to a flying start in trials until the Western pharmaceuticals giant they were partnered with pulled the plug as sanctions were tightened. “It was understandable. For them, Iran was still too hot to handle,” he says.

However, Esfandyar (“Yar” for short) and his family are confident sanctions will be lifted sooner rather than later. Confident enough to have organised the first big London conference for Western businesses to learn about the Iranian commercial climate from some of the country’s leading entrepreneurs.

They have had to be very careful to set the ground rules in accordance with the trade restrictions: no business can be conducted at the event; no coercion to strike deals in the future is allowed; and none of the speakers have been paid. From the Iranian side, they had to get approval from the Government for the entrepreneurs to come over, too.

Yet the pieces have fallen into place, and they have assembled an impressive list for their Europe-Iran forum. For the first time, around 20 of the top chief executives and chairmen from Iran’s private companies will come over to talk about the opportunities and markets. And from the West, keynote speakers include WPP’s Sir Martin Sorrell, the former foreign secretary Jack Straw and representatives from Sotheby’s, Renaissance Capital and the World Bank, not to mention the Tate Modern art gallery.

I raise the issue with Yar about the potential reputational damage to Western companies of making money in a country of horrific public executions, state censorship of the media and other human rights abuses. I tell him about the Iranian reporter I know who was forced by state thugs to flee the country and now lives in exile in London, where he is still regularly harassed by its secret police.

General Electric is aware of that reputational risk. It has said any revenues that it makes servicing aircraft in Iran (business it has not yet begun) would be donated to charity.

But Yar, who was born and raised in the US and is clearly upset by the story of my journalist friend, argues that the way for the outside world to reform a country’s government, rather than shaking a fist in its face, is to empower its citizens with jobs, wealth and the influence over policy that goes with it. And only private sector trade and investment from the outside world can make that happen, he says.

It’s a view that I’m sure Sir Martin will espouse at next month’s conference. He took WPP into Burma after sanctions were lifted in 2012 and has recently been calling for a resumption of US trade with Cuba.

WPP now makes good money in Burma and employs 50 people who might otherwise be unemployed, paying them a relatively decent wage, too. It may not yet be Sweden by the standards of Amnesty International, but for the Burmese, perhaps having a steady job that puts food on the table is an important human right in itself.