Iran is an ancient country at the heart of the Silk Road, linking trade routes between the East and the West.
With its strategic geographic location, climatic diversity, extensive industrial base, diverse economy, huge energy reserves (ranking second in the world in gas and fourth in oil), valuable mineral reserves (accounting for 7% of the world reserves), relatively suitable transportation and telecom infrastructures, and access to domestic and regional markets, Iran can be one of the best destinations for investment. In other words, Iran is the largest regional economy that has not reached its full potential over its failure to integrate with the international community.
Feryal Mostofi, a member of Tehran Chamber of Commerce, Industries, Mines and Agriculture, prefaced her write-up for News.tccim.ir with this note. A translation of the text follows:
Human capital is Iran’s most important asset; 70% of the country’s 85 million people are young. They are skilled and educated (with a literacy rate of 89.7% and 20 million Iranians in universities).
According to the Global Innovation Index, Iran ranks second among the Central and South Asian economies after India. It occupies the ninth spot in the world in university education and is placed third in the percentage of science and engineering graduates.
Given competitive costs, the wage rate in Iran is significantly lower than that of the United States or Europe; factors such as higher percentages of unemployment among youths and university graduates show Iran’s high workforce capacity for global participation and foreign investment.
For the country to tap into its huge potential, it needs to join the international community and participate in the global economy. It is highly unlikely for the country to achieve its goals in the absence of international economic cooperation. With isolation, our resources will deplete by the day and the windows of opportunity (population and relative advantages) will not be open to us forever. In case of procrastination, we’ll miss out the opportunity.
The road ahead is not even, but once we decide to change, we can overcome these obstacles and build a country where every Iranian has the chance to realize their potential.
The long years of sanctions and ostracization have resulted in countless missed opportunities. We need to be careful that international partnerships do not pivot solely on investment. We can transfer technology and learn management through cooperation. Iranians have proven to be intelligent people; wherever the stage was set, they were able to take full advantage and improve.
The lifting of economic sanctions, linkup with SWIFT and accession to international agreements and institutions, including World Trade Organization and the Financial Action Task Force, should be undertaken urgently. Iran will be able to use financial instruments and take out cheap loans by joining international institutions. The move will also facilitate foreign investment.
Today, Iran is at a critical economic stage, as attraction of investment could help boost growth and development.
The performance of domestic banks and financial institutions will automatically improve when we forge international ties. Local banks will be forced to reform their accounting standards and transparency, which will lower corruption in the economic system. In addition, the presence of foreign banks and investments in Iranian banks and the establishment of branches of Iranian banks and financial institutions abroad will become possible. All these create advantages for the country.
Now that the country is under sanctions, the cost of economic exchanges is high. By removing sanctions and participating in the conventional environment, we can reduce the costs of international financial and commercial transactions and improve our economic competitiveness. This will help our companies and economic players receive better opportunities.
Money transfer will become safe and business risks will decline. As a result, exports and imports will grow and the country will find the opportunity to supply more products to international markets, create healthy competition and improve the quality of products.
Iran’s efforts to observe international standards and join global institutions can be an effective step forward and improve the economy, create jobs, boost export and empower domestic companies. This requires an overhaul of laws and procedures, organizational structures and macroeconomic policies.
