Governor of the Central Bank of Iran (CBI) Valiollah Seif has said the country is able to attract $3.5 trillion of investments within the next two decades.

He made the remarks in an address to the Meeting of the Central Banks and Monetary Authorities of the Member Countries of the Organization of the Islamic Conference (OIC) in Turkey on Friday, IRNA reported.

Seif referred to oil and gas, petrochemicals, mining, transportation, urbanism, industrial production, agriculture, and information technology as among the fields of interest for Iran to absorb investments within the next 20 years. 

Iran has decided to shift away from an oil-reliant economy to one that depends on other sources of revenue, including taxation as well as domestic and foreign investment to attain the goal of eight percent economic growth set by the Sixth Five-Year National Development Plan (2016-2021).

As previously reported, the government plans to attract $65 billion of foreign investment by March 2021, of which $30 billion is about to come in finance, $20 billion in economic partnership and $15 billion in direct investment.

To hit the set target, great opportunities and special incentives have been created in Iran to attract foreign investors, for instance, foreigners are presently capable of making investments in projects up to 100 percent. 

Simultaneously, according to Seif’s Friday remarks, under the aegis of JCPOA, Iran could take significant steps to tighten its international finical relation such as initiating brokerage relations and singing finance agreements with some international banks. However, as he further explained, in a bid to optimize exploitation of its capacities as a 80-million-people country, Iran needs to improve its financial relations with the countries in the region and also OIC countries more that the current time to ease attraction of foreign investments, investments which will initially lead to creating jobs for its young workforce and then in economic growth.

As a matter of fact, the major factor in attraction of investors, both foreign and domestic, in a country is the predictability and stability of its economic and political conditions besides legal and financial transparency. Investors should feel safe about making their investments. In post-sanction era, the Iranian government has tried to improve business environment to smooth foreign investor’s presence in Iran, Seif assured listeners on Friday. 

The taken measures by the Iranian government have borne fruit to some extent. The country could endorse investment agreements in various economic sectors with international companies and has also been successful in securing credit lines for different projects in its mainland during the past 21 months. The made efforts of Iran in this regard, is confirmed by the United Nations Conference on Trade and Development (UNCTAD), when in its World Investment Report 2017, UN-based body put Iran among successful countries in terms of signing investment agreements in 2016. Attracting $3.372 billion worth of foreign investment in 2016, the country has registered a 63 percent rise in this regard, the report said.

However, the road for foreign investors into Iranian economy still seems a little bit bumpy, since in practice, some global investors express concern about the investments risks, currency and interest rate risks, and competitiveness in Iranian market. They are not properly informed about Iran’s taxation system, labor laws, and etc. 

The solution would be gaining the membership of World Trade Organization (WTO). The Iranian government plans to become a WTO member by the Iranian calendar year 1404 (beginning in March 2023) and in this regard, has set up a team of economists and lawyers to evaluate the institutional and economic reforms required to make its trade regime WTO-compliant. Besides, doing some internal amendments to its financial system and laws, joining the international body would help Iran suggest itself to foreign investors as a safe and sound destination for their money. 

HJ/MA/MG