Iran Pulse

Why do Iran's conservatives oppose deals with Boeing, Hyundai?

Article Summary
Iranian conservatives denounce the billion-dollar deals with Boeing and South Korea’s Hyundai to modernize Iran’s air and shipping fleets after years of sanctions.

Iran’s national carrier Iran Air and US aircraft manufacturer Boeing signed a $16.6 billion deal for the sale of 80 passenger jets Dec. 11, despite strong opposition from the US House of Representatives. However, right-wing Americans have not been the only opponents of the deal; conservative Iranians have also voiced their objections against buying aircraft from the United States.

The deal was made possible by a Sept. 21 authorization from the US Treasury Department’s Office of Foreign Assets Control. The two companies' agreements are a result of the July 2015 Joint Comprehensive Plan of Action (JCPOA), which lifted nuclear-related sanctions on Iran in return for curbs on its nuclear program. With the goal of renewing its aging fleet, Iran will import Boeing airplanes, including 50 narrow-body 737 MAX aircraft and 30 long-haul 777s. Boeing said that deliveries will begin in 2018.

While Reformist outlets in Iran hailed the agreement to purchase a fleet of passenger jets from the United States, conservative media denounced the deal. On Dec. 12, Iranian media supporting President Hassan Rouhani celebrated the agreement on their front pages with headlines such as “Boeing’s historical landing in Iran,” “Spell on Iran-US economic relations removed,” “Flight of Boeing over wall of sanctions” and “Boeing in Tehran hangar.”

Meanwhile, Sobh-e No, a daily close to the Principlists, highlighted a Boeing statement that stressed the deal “will support tens of thousands of US jobs directly associated with production and delivery of the 777-300ERs and nearly 100,000 US jobs in the US.” Sobh-e No covered the agreement under the headline “A deal to create 100,000 jobs in US.”

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The semi-official Fars News Agency also reported on criticism of the deal by Brig. Gen. Mohammad Reza Naghdi, the cultural deputy of the Islamic Revolutionary Guard Corps (IRGC). According to Fars, Naghdi said, “They [the Rouhani administration] had promised to force the United States to return the $2 billion they owe us [as part of Iran’s frozen assets in the United States], but now they have poured another $16 billion in their [Americans’] mouths.”

Meanwhile, another agreement with an international firm received harsh criticism from conservatives in Tehran. On Dec. 9, the official IRNA news agency reported that Iran’s state-owned shipping company finalized an agreement with South Korea's Hyundai Heavy Industries for a $650 million order of container ships and tankers. Hyundai Heavy Industries is the world’s largest shipbuilder by revenue, and this is Iran’s first deal to modernize its fleet since 2006.

In a reaction to the deal, the conservative newspaper Kayhan on Dec. 12 quoted Abdollah Abdollahi, the head of Khatam al-Anbiya Construction Headquarters — the main economic arm of the IRGC — as stressing that the deal contradicts Rouhani’s promises to reduce the unemployment rate in Iran. Under the headline “Don’t give it to Koreans, we can do it ourselves,” Kayhan said, “It is alarming that despite having millions of unemployed youths in the country, the government gives away all our [economic] capacities to the sworn enemies of Iran.” 

IRNA quoted Vice President Eshaq Jahangiri on Dec. 12 as declaring that the initial agreement with South Korea’s Hyundai was reached under previous conservative President Mahmoud Ahmadinejad. “Iran had paid 25% of the final fee for the deal, but due to [nuclear-related] international sanctions it was impossible to make the other installments,” Jahangiri said. “After the JCPOA, we renewed the deal and they [Hyundai] agreed to reduce the price by 25%.”

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Found in: south korea, shipping, principlists, jcpoa, irgc, business & finance, boeing, aircraft

Changiz M. Varzi covers Iranian media for Al-Monitor.

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