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by Despite its continued bluster on nuclear issues, Iran is discovering that there are costs to be paid for maintaining its confrontational stance. Pressure from Washington to isolate Tehran financially has already succeeded in removing or significantly reducing such major European banks as Credit Suisse and UBS from the Iranian scene. Now several large German institutions are preparing to leave as well. Over the last few months Deutsche Bank and Commerzbank have withdrawn investments. Dresdner Bank has announced it will cancel operations within Iran altogether. It is believed that these banks fear losing U.S. business if they continue to operate in Iran.
The moves, however, have obviously not gone unnoticed in Tehran where Vice Governor of the Iranian Central Bank, Mohammad Jafar Mojarrad, has threatened the German financial institutions with a bar from Iranian business when relations improve. Mojarrad furthermore criticized the U.S. for misusing the Bank system as a tool for military purposes and also warned Germany that there are banks from Asia, Russia and the Gulf region ready to take Germany's place.
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It's odd, but the way Iran responded reminds me of an altercation I has with a gas station manager. I was overcharged and went back to get a refund. The manager demanded the return of the items, and after I explained the ice cream was no longer returnable, he would only concede to refund the difference in price. Given the obvious injustice of being overcharged, and having made multiple special trips to the station to get the refund, I demanded a full refund (similar to the policy they have at grocery stores). Rather than handle it professionally, the manager proceeded to yell things like, "I don't want your business! Go to Kroger across street!" - in front of a line of customers.
In any case, back to the point at hand: Is there something in Middle Eastern culture which conflicts with customer service? You know, sympathize with the customer, try to keep their business even if it means refunding the cost of an ice cream bar, etc. It may be an incorrect generalization, but it seems there is something either offensive in that culture about taking an issue to a manager (maybe it was because I was young?), or they just tend to deal with things in a more ... contentious manner (e.g., the political situation above).
Would banks in Asia and Russia be as powerful an institution as the German bank?
Would banks in Asia and Russia be as powerful an institution as the German bank?
The classic answer, of course, is that it depends. Coming from a financial service advisory role, the critical factors aren't just how much money the bank has to throw around, etc. It's how trustworthy they are in terms of money-laundering, asset seizing, etc. You can have a bank with ass-tons of assets ... but would you trust their investment in you if there's a good chance they'll just seize your profits or use that loan as a noose for blackmail, etc. In that case, a European or American bank becomes infinitely more powerful than anything Russia can offer.
It's all about saving face over there and not letting people tarnish your honor. Mr. Mojarrad probably takes the withdrawal as personal failures and is lashing out at Germany because he's sees his bank failing and Iran failing in the process. My observation has been this causes Middle EAsterns to use threats to try and get their way when negotiations would be a lot more effective. Iran seems to have a way of acting juvenille. Look at this whole situation like this and set it on a t-ball field:
International Community: Hey man, you can't play with an aluminum bat.
Iran: I can if I want.
International Community: No, you agreed not to. Come on, seriously.
Iran: I can. You can't make me. You're not the boss of me.
International Community: Ok. Then we're going home and taking our stuff with us.
Iran: Fine! See if I care! One day I'm gonna be a super-great t-ball player. Then when you wanna play, I won't let you. Screw you guys! There's kids down the street that'll play with me.
Iran: You drink from the toilet ... and you LIKE it.
International Community: Well you play baseball like a girl!
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Economics vs Politics by VnutZ :: NR8 :: on 24 August 2007
I remember in high school I had two very polarized instructors - one taught macro-economics and the other politics. The two were friends, but consistently dug at each other's curriculum discussing how your other teacher is going to say policy drives the world when in reality it is this supply-demand curve - and vice versa.
So anyway, it will be interesting to see how real economics plays into the behavior of Iran as opposed to political bickering. And before anyone tries to say Iraq was already the case-study, the oil-for-food scandals break that model. An oppressive government that maintains a personal money-supply via corruption therefore has no need to act from an economic basis because the decision-maker is satisfied.