Joint venture likely to turn into top investment priority in post-sanction Iran

Business Materials 3 May 2015 16:14 (UTC +04:00)

Tehran, Iran, May 3

By Mehdi Sepahvand - Trend:

While Iran is pushing its way through tough negotiations with the group P5+1 (the US, UK, France, Russia, China, and Germany) to a final deal on its nuclear program, the question comes up how Iran's economic relations with other countries will change after the deal which is expected to remove sanctions on Iran's economy.

As a result of the sanctions, Iran's export to the Eurozone fell by 10 percent last year.

Since they were imposed, the sanctions grew more and more intense, thus reducing Iran's trade volume with Europe and the Eurozone.

As a result, Iran's trade relations were limited to those countries which would have better relations with Iran's position on the new conditions and neighbor markets such as Iraq, Afghanistan and the UAE; and succeeded to increase the trade value more than before sanction with other new countries, Mohammad Lahouti, Vice President of Iran Export Confederation and member of the Tehran Chamber of Commerce told Trend May 3.

Another reason for the 10-percent reduction of Iranian trade was the depreciation of euro against other currencies, he added.

After the Lausanne agreement is turned into a final agreement and sanctions are removed, the Iranian market is going to be a virgin, attractive market for foreign investors, according to Lahouti.

Iran and the world powers are scheduled to strike a final nuclear agreement by July 1.

"From one side we will have an incoming flood of intermediate goods and industrial machines, and on the other side we will have foreign investors in large numbers who would seek to use the lush opportunities in Iran," he said.

"Since in major oil, gas, petrochemicals, and automotive industries there are many opportunities for activity, I think investments will be conducted very swiftly and investors will swarm the market."

Also, in the case of middle-sized and small investment opportunities, since we have the upper hand in the case of some goods and are otherwise in some other sections, there are still attractions to be found in those areas too, he further stated.

"Although the talk will be mostly about large investments such as oil, petrochemicals, gas, and car manufacturing, where the market is very attractive especially for European and US investors, there will also be attraction in tourism, hotel business, fabrics, clothing, and other industries," he asserted.

"However, investment in small industries takes more time to improve because it is occupied by private sector. There we will need some reformations inside Iran in order to create more lucrative investment opportunities."

"As a conclusion, I can say that the main area of investment will be joint ventures where the foreign investors, as well as Iran, will have top priority."

Mehdi Sepahvand is Trend Agency's journalist in Iran, follow him on Twitter: @mehdisepahvand