Iran

Info

Official name Islamic Republic of Iran
Political capital Teheran
Local currency Iranian Riyal (IRR)
Official languages Farsi (Persian)
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Why Iran

Economy: Iranian economic planning is based on twenty-year development plans, scheduled in five-year plans. Among the main structural measures, there is the implementation of reforms based on market economy principles, such as the elimination of subsidies to users and privatization of companies and state banks. The five-year plans determine the fiscal policies too. State still has a strong influence in the economy, and it owns majority holdings in large public and semi-public companies, which actually take a dominant position in commercial and production sectors. Big public banks occupy a large portion also in the financial sector. Iranian economy is a mixture of central planning, state ownership of oil and other large enterprises, village agriculture, and small-scale private trading and service ventures. Following the nuclear agreement in July 2015 and the lifting of sanctions, the country is progressively reintegrating into the international community. Iran holds some of the world's largest deposits of proved oil and natural gas reserves, which provide a high annual income for government's budget. After a recent recession caused by the decreasing of oil price, the country is going through an economic recovery. In addition, given Iranian geographical projection, the country aims at becoming a strategic hub between West and East trading consumer goods in the regional market, which serves about 350 million people. However, Iranian economy is affected both by the reluctance of foreign banks to operate directly in the country, and also by the scarce experience that local banks have in financing projects. 

Export and partners: Iran also possesses enormous mineral resources, including coal, copper, iron, zinc and gold. This has spawned a number of processing industries, particularly that of steel. Iran is already the third largest producer of copper in the world and one of its priorities is to increase non-oil exports. The main exported products are oil (80%), chemical and petrolchemical products, natural gas, food products, cement. Major export partners are China (22,2%), India (9,9%), Japan (4,5%).

Import and partners: food sector makes up a significant portion of imports, specifically food products account for 19% of total Iranian imports from Italy. In addition to food products and consumer goods, technology transfer, machineries, technical services are equally important for the country, focused on encouraging cooperation with foreign brands. Following are the main supplier countries: UAE (39.6%), China (22.4%), South Korea (4.7%).

Primary sector: agriculture is one of the most important sectors of the Iranian economy, accounting about 11% of GDP, 23% of the employed population and 15% of the foreign exchange revenues (form non-oil exports). Agricultural and animal husbandry products have always provided the major non-oil export items such as pistachios, raisins and even carpets (the wool or silk used in them). About 20% of the land in Iran is arable. The main food-producing areas are in the Caspian region and in valleys of the North-west. Some Northern and Western areas support rain-fed agriculture, while other areas require irrigation for successful crop production. 

Secondary sector: the key industries in the country are those of steel, weaving, food processing, cars, electrical and electronics. Iran now produces a wide range of manufactured commodities, such as telecommunications equipment, industrial machinery, paper, rubber products, steel, food products, wood and leather products, textiles, and pharmaceuticals. Iran is also known throughout the world for its hand-woven carpets. The traditional craft of making these Persian rugs contributes substantially to rural incomes and is one of Iranian most important export industries.

Tertiary sector: the service sector is the country's largest one. Estimates of service sector spending in Iran are regularly more than two-fifths of GDP, much government-related, including military expenditures, government salaries and social security disbursements. Urbanization contributed to service sector growth. Important service industries include public services (including education), commerce, personal services, professional services and tourism.

 

Investment opportunities in Iran

  1. Electricity, gas, steam and air conditioning (including renewable energy): in recent years a boom occurred in the construction sector, especially regarding residential properties and shopping centers. Development and construction of hospitality and healthcare facilities was consistent, simultaneously with the modernization of transport infrastructure and greenfield projects.
  2. Water supply, sewerage, waste management and reclamation: generally Iranian cities require massive investments in the field of waste water treatment and urban waste management. Water is a scarce resource in Iran, thus modern irrigation systems and desalination plants are required.
  3. Vehicles, trailers and semi-trailers: this is considered the leading sector of the Iranian economy following the energy sector. There is an increasing demand for business cooperation and industrial joint ventures with foreign brands (and Italian) especially in co-production and marketing of cars, heavy transport vehicles (TIR and trucks), agricultural machinery, vehicles for public transport (buses and minivans).
  4. Tourism: tourist flow is growing simultaneously with the number of hotels. Building new tourist accommodations and refurbishing the existing ones are priorities.
  5. Infrastructures: Iran is likely to need more than 1 trillion USD of investment in infrastructure in the next years. This will be necessary to meet the ambitious plans the Iranian government has laid out for transport, power and water. 

 


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