Business And Markets

Is Kish A Good Long Term Bet?

Is Kish A Good  Long Term Bet? Is Kish A Good  Long Term Bet?

The tranquil island of Kish, nestled on the south coast of Iran has the enviable position of being Iran’s most renowned premier free trade zone. There are other free trade zones scattered across the length and breadth of the Islamic Republic, but those usurpers are generally not set up for international tourists and investors. But is Kish?

Since the Rafsanjani administration in the late 1980s and 1990s, Kish has been designated as a free zone -- an area where any national or foreigner can visit without visas, buy and invest in. Over the intervening years, Kish has had a stop-start level of investment and interest. There are multiple factors for this staggered progress, most notably the growth of the different cities of the Persian Gulf littoral states trouncing Kish for any possible return on investment; Western sanctions which damaged the island’s economy as much as they did to mainland Iran; and lastly, the restrictive access to the island. Although foreigners can enter Kish from a multitude of different places in the region, long distance international flights from Europe, Africa or Asia are not available. These three combined factors all explain the tepid interest in Kish as a destination for investment.

Island authorities have over the past few years noticed these issues and have attempted to carve out a niche for the free zone. Some people in Iran like to call Kish “Mini-Dubai” as homage to its bigger cousin on the south side of the Persian Gulf. But unlike Dubai, Kish has a host of long term economic problems.

People who reside in Kish, Kishers for the context of the article, have over the years attempted to garner interest in the island, through new shopping malls  and entertainment complexes, villas and apartments and restaurants. However as any developer knows these individual developments cannot be created in a vacuum, they in turn must be incorporated as part of a much larger master plan for the island.

The worst thing for Kish’s development over the next few years is if you get a hodge-podge of developments, which do not tie in to the structure of their neighboring developments. Kishers have long known this, but many off-island developers from Iran’s capital city Tehran do not have an understanding of the island’s geographical or cultural dynamic. The latest of these not-so-well-thought-out plans was by the now jailed billionaire Babak Zanjani. Zanjani’s plan for the island was meant to be a replica of Tehran’s once illustrious art-deco Lalehzar Street. Now a street near the bazaar of Tehran famous for its lighting stores, Lalehzar was once home to the best theatres and cinemas in town. However considering the status of its primary investor, the island is left with a metal structure lining a half kilometer stretch of the center of the island. No one quite knows what the status of this project is or whether or not the government will sell it on to another investment group, but in the long term, unfinished developments like this could have a serious knock on effect to surrounding plans.

However, there are some glimmers of hope for Kish, take for instance the large scale plans of the Padideh group. They are currently constructing mixed use developments across the island including an e-commerce city to attract businesses, the Padideh Shopping Complex and the so-called Vacation City. These projects under construction show a new willingness to invest, and with these currently underway, many more businesses are likely to follow suit. One quick check of websites like show the vibrancy in designs of the plans. Mixed-use developments like the ones above do show how some developers, whether they be local or from mainland Iran, now realize the need to broaden the long term plans needed to bring the punters in.

Other areas which look ripe for long term investment include manufacturing on the island. The Kish Free Zone Organization has publicly issued its willingness for companies to set up. A quick check of the KFTZO website and you’ll see that the authorities of Kish are attempting to broaden their investable potential by including industries such as healthcare tourism, merchant traders, jewelers, entertainment complexes among many others. If one was to analyze the page of the island you would be hard pressed to find a specific area that doesn’t need development. As far as the investment organization is concerned, all investment whether that be foreign or local is welcome. The jury is out whether Kish will attain the investment over the course of the current administration, but if any government is finally going to get Kish to its rightful place as a domestic and international destination of investment, tourism and business it is this one.