As a vast country of 80 million educated and qualified people and with a developed infrastructure straddling the crossroads of busy land and sea routes and boasting huge reserves of oil and gas, Iran is a strong point of attraction for foreign businessmen.
The Islamic Republic has seen foreign investments flowing in ever since Hassan Rouhani became President in August 2013 with over $4 billion already invested in 124 industrial projects across the country. This year Iran became the third biggest recipient of foreign investments in the Middle East after the United Arab Emirates and Saudi Arabia with 19 new countries joining Germany and South Korea as Tehran’s biggest foreign investors – a 90-percent jump from 2015. By 2020, foreign companies are going to invest $185 billion in Iran’s oil, gas and petrochemical sectors alone. During the 1st Iran Investment Summit in Singapore held late last month, the Governor of the Central Bank of Iran, Valiollah Seif, said that Iran had become a priority destination for delegations from all over the world with interest in banking, oil and gas, aviation, tourism, automotive and infrastructure sectors. Russia remains one of Iran’s main economic partners in the world having signed more than 40 billion dollars’ worth of joint investment agreements with Tehran since January and having promised an additional $7 billion in loans.
While lifting “nuclear sanctions” from Tehran and allowing businesses to do dollar transactions with Iran by offshore banking institutions as long as they do not enter the US financial system, the United States keeps in place “non-nuclear” sanctions and proposes new ones.
Iran holds the world’s fourth-largest oil reserves and its second-largest gas reserves. With a GDP of US$1.4 trillion, adjusted for purchasing power parity, Iran is the world’s 18th largest economy according to the International Monetary Fund’s 2015 World Economic Outlook. Even after years of being subjected to economic mismanagement and sanctions, Iran’s GDP per capita of US$17,000 makes its citizens wealthier than their peers in China and Brazil.
Contrary to popular belief, Iran is not an oil and gas economy: 50 per cent of the Iranian GDP derives from services; 40 per cent from industry (of which only 20 per cent is oil, gas and petrochemicals) and the remaining 10 per cent is mostly agriculture. Some 83 per cent of the population lives in urban centres and, at its peak, Iran’s automotive sector produced 1.65 million cars – more than Britain produces.
With a population of 80 million, the same as that of Turkey, Germany and Egypt, the Iranian consumer presents a significant market to multinational corporations, financial market operators and emerging market investors. The population is young: 65 per cent of Iranians are under the age of 35 and need everything from credit cards and houses to retail and travel services. They are educated and many speak a degree of English. That enables them to surf the net and be connected through social media. 4G and smart-phones are widely available and are heavily used. Iranians like to communicate: they produce more blogs each year than any other country in the world bar the US.