Economy, Business And Markets

CBI Eyes Tourism for Replenishing Reserves

CBI Eyes Tourism for  Replenishing ReservesCBI Eyes Tourism for  Replenishing Reserves

C entral Bank Governor Valiollah Seif is eying tourism industry as a source of foreign receipts, which could diminish the oil industry’s domineering role and help stabilize rial’s value.

The governor said the development of tourism would result in an inflow of foreign currencies as part of non-oil economy.

Addressing a gathering themed “Cultural Heritage, Handicrafts and Tourism” in Tehran on Thursday, Seif commented on the capacity of Iran’s tourism industry.

Seif stressed there are tourism opportunities in health and medical sectors to attract foreign tourists, as well as traditional attractions.

Iran, as an oil exporter, relies heavily on petrodollars to cover its foreign exchange expenses. However, officials are trying to increase the share of alternative sources of foreign receipts.

 The Four Seasons

The Iranian peninsula is one of the most biodiverse in the world, with a climate offering all four seasons year round, and terrain ranging from mountains and forests to deserts and seasides.

Furthermore, Iran is an ancient land and a cradle of civilizations dating back seven millennia.    

Neighboring Turkey with less biodiversity and historical heritage is the sixth most popular tourist destination in the world. It attracts over 30 million tourists annually in recent years, bringing nearly $30 billion in tourism receipts.

Iran attracts a tenth of Turkey’s tourists annually. A look at Turkey reveals Iran’s superior potential as a tourism destination. Diverse attractions, boasting cultural splendors and a diverse and beautiful landscape suitable for a range of activities is what Iran can offer, in turn helping strengthen the central bank’s hand at stabilizing the rial.

Realizing Iran’s tourism potential requires heavy investment in the sector and regulatory reform for visa applications and even social laws.

According to the head of Iran Touring and Tourism Investment Company, Mohsen Gharib, Iran will face a “tsunami” of foreign tourists once sanctions on the country are lifted.

 “Nearly 20 million foreign tourists will probably visit Iran within the next five years,” Gharib said recently.

 Historic Repercussions

Iran has a diversified economy, with over 40 different industries listed on Tehran Stock Exchange. But the oil industry has always overshadowed others in size and share of foreign receipts.

Iran’s oil reliance has cost it a great deal throughout the black gold’s production history.

The susceptibility of the country to economic turmoil as a result of oil price fluctuations and sanctions are two of the most concerning effects that concern policymakers.

UK sanctions on Iranian oil exports—after the nationalization of the Anglo-Iranian Oil Company in 1951 by the Iranian government following Britain’s refusal to amend the appalling terms given to Iran for its oil—broke the Iranian economy.

A more recent example were curbs on Iran’s oil exports in 2012—imposed to curb Tehran’s nuclear activities, which contributed to a 60% devaluation of the rial.