Thursday July 1, 2010

I've Been Thinking:

Yesterday Iran amended their "Law for the Support of Palestine." This law imposed a boycott on all Israeli goods, on all Jewish owned companies and on companies that outwardly do business with Israel.

The amendment also requires that an annual report be presented on the status of the boycott. That puts Coke, IBM, Intel, Nestles directly in the cross hairs or Iran.

Practically speaking, Iran only has about 73 million people. Not a huge market, but large enough to sting these companies. By comparison Israel's population is only 7, 587,000 about a tenth of Iran's.

Iran's hope is that others will join in the boycott. All these companies are searching for emerging markets and hope to expand. Iran knows that if more countries join the boycott, even in name only, significant pressure will be brought on these big companies to abandon Israel.

Iran wants to show how they can isolate Israel and how they can move international corporations to conform to their will. They are implementing their own boycott in the context of additional sanctions being brought on them.

Iran intends to use their boycott as a tool to repel the sanctions.

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