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Japan's Prime Minister Shinzo Abe, Iran's President Hassan Rouhani and Iran's Foreign Minister Mohammad Javad Zarif (L-R) listen to a special address during the annual meeting of the World Economic Forum (WEF) in Davos January 22, 2014. (DENIS BALIBOUSE/REUTERS)
Japan's Prime Minister Shinzo Abe, Iran's President Hassan Rouhani and Iran's Foreign Minister Mohammad Javad Zarif (L-R) listen to a special address during the annual meeting of the World Economic Forum (WEF) in Davos January 22, 2014. (DENIS BALIBOUSE/REUTERS)

Iran’s Rouhani ties economic growth, political stability to lifting of sanctions Add to ...

There won’t be stability in Syria, Iraq or Afghanistan, or sustained economic growth across the region, until sanctions are lifted on Iran and it is treated as a regional leader, Iranian President Hassan Rouhani says.

Speaking at the World Economic Forum in Davos, Switzerland, Mr. Rouhani said Iran could become the world’s 10th-largest economy in a decade if U.S-led sanctions were lifted. He said his country would increase global oil supplies, expand gas shipments to Europe and become a force for economic liberalization in the Persian Gulf.

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He also said Tehran, which continues to back the regime in Syria as well as Shia forces in Iraq and Afghanistan, is essential to peace in those countries.

Mr. Rouhani was elected last year on a promise to reform Iran’s political system and economy, areas in which there has been little demonstrated progress in recent months. The Iranian economy shrank by an estimated 6 per cent last year, he said.

“Iran has been placed at a crossroads,” he later told a group of editors from news organizations, including The Globe and Mail. “Iran is the best route through which Central Asia and Afghanistan can be connected to the open seas. Iran has huge human capital.”

He pointed to his use of Twitter and Facebook as signs of liberalization in a country that tolerates little free expression. But when pushed on his use of Twitter, he conceded that he does not write his own social media posts. “They are written by my friends,” he said.

During a day of public appearances that were denounced by Israel as a publicity stunt, Mr. Rouhani urged peace in Syria, but said he has “a lot of doubt” about the United Nations-backed talks under way this week in Montreux, Switzerland. “The ultimate solution lies in the negotiations and dialogue between Syrians,” he said. “A Syrian-Syrian dialogue should take place in Syria and lay the ground for a free and fair elections.”

The UN talks have focused on the removal of Syrian President Bashar al-Assad, according to diplomats in the sessions. “There is no way he can stay,” said one Western official who had just been in the Montreux talks and spoke on condition on anonymity.

Mr. Rouhani tried to focus on Iran’s economic potential, saying it could be the world’s largest oil producer and third-largest gas producer, as well as a significant mining centre.

He met privately with Western oil executives in Davos, saying his government would liberalize investment rules this year.

Iran has reached out to the United States to engage in non-nuclear issues, such as environmental protection and poverty alleviation, he said.

“We have never sought and will never seek nuclear weapons,” he told the Davos audience. “I declare that a nuclear weapon has no place in our security strategy.”

A senior Obama administration official at Davos played down any prospect for a quick end to all sanctions, saying Washington wants to stick to its agreement with Tehran to reduce specific sanctions when verified progress is made in Iran’s nuclear program.

Iran has been turning to other rising powers to build international support. Mr. Rouhani attended a speech in Davos by Japanese Prime Minister Shinzo Abe, and received Japan’s Foreign Minister in Tehran last year. He is hosting Turkey’s Prime Minister this month.

The Rouhani speech was quickly attacked by Israeli Prime Minister Benjamin Netanyahu, who was in Davos Thursday to promote Israel as a global leader in innovation and an emerging ally for moderate governments in the region.

“Central Asian governments are preoccupied with the Iranian nuclear weapons and the Muslim Brotherhood. … The nations do not see Israel as an enemy but as a potential ally to combat these threats,” Mr. Netanyahu said.

In a statement, he said Mr. Rouhani’s speech had “no connection to what’s going on on the ground.”

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