EghtesadOnline: After Iran reached a deal with six international mediators on its nuclear program, its economic ties with foreign partners transformed deeply and Iran became a magnet for international business.
This was stated by Vladimir Sazhin, senior research fellow at the Institute for Eastern Studies at the Russian Academy of Sciences, Sputnik Persian reported.
Iran’s nuclear agreement with world powers turned the country into an attractive destination for foreign investments. In 2016, Tehran began to compensate trade losses, after years of western sanctions. The focus was placed on such centers of power as the European Union and China.
Last year, Iran managed to significantly increase trade with France, Italy, Britain, Japan and Turkey among other states, according to Financial Tribune.
Currently, foreign investments play a key role in developing the Iranian economy.
According to Sputnik’s estimates, Tehran will need nearly $500 billion in the coming five-seven years.
For example, by 2020, Iran aims to attract $185 billion of investments only in the oil, gas and petrochemical industries.
In 2016, Iran’s economy received around $12 billion for 113 projects.
In the investment field, Iran cooperates with a number of countries, including China, France, Venezuela, Britain and Russia. In December, the Russian Parliament passed a draft bill to ratify a Russia-Iran agreement to promote and secure mutual investments.
Companies from Germany and Spain have been the most active players in the Iranian investment market. For instance, during December 2015-16, Spanish companies invested $3.2 billion into a few projects and German companies spent $2.9 billion on 17 projects.
“This is still far from the planned $500 billion and there are several reasons for that. In particular, the Iranian laws do not fully comply with foreign investors’ requirements and interest. Tehran knows that and is currently working to adjust its norms to internationally adopted rules,” Sazhin said.
“In addition, not all possible investors see the advantages of placing money in the Iranian economy. They are still prisoners of the stereotypes from the period of sanctions.”
In turn, Iran is working to improve and promote investing attractiveness of its economy, including in different sectors and regions.
The Case of Qeshm Free Zone
After the nuclear deal was signed, a free economic zone on the Iranian island of Qeshm managed to attract investments from 10 countries.
Qeshm Island is located a few kilometers off the Iranian southern coast, opposite the port cities of Bandar Abbas and Bandar Khamir. The 135 km-long island, which is the largest in the Persian Gulf, boasts a 300-square-kilometer free zone.
Hamidreza Momeni, managing director of Qeshm economic zone, said among the interested countries were Russia, France, Britain, China and Japan.
There are seven free economic zones in Iran.
According to Momeni, the Qeshm Free Economic Zone stands out in terms of investment attractiveness because it is rich in oil region with well-developed logistical infrastructure.
Its advantageous location makes Qeshm Island a transfer point in Iran’s trade with the Persian Gulf countries and Europe. The Iranian government expects Qeshm free zone to become a major economic center focusing on industrial production and information technologies as well as financial and banking institutions.