Iranian Business Community Welcomes Global Rating Agencies

As Iran pushes reforms to privatize its economy and improve the business landscape, the country's private sector is taking a more proactive approach in convincing the government to liberalize the economy and free it from the Kafkaesque bureaucracy hindering entrepreneurism.

As part of its plans, the business community is teaming up with global rating agencies to provide a roadmap for economic liberalization and remove negative stereotypes falsely projected in the world media about conditions in Iran.

"Our main objective is to improve the ease of doing business and in doing this, we know what the challenges are, which is why we are seeking the wisdom and experience of other countries that have gone through the same process," Ferial Mostofi, the head of Investment Commission at Iran Chamber of Commerce, Industries, Mines and Agriculture, said.

On Monday, TCCIM, of which Mostofi is also a senior member, hosted a seminar with senior fellows of Fraser institute–a Canadian research firm that, among other things, measures economic freedom across the world–to discuss ways of improving Iran's economic freedom index.

The event was attended by senior business figures and government officials as well as Omani officials, including Salem Al-Ismaily, the sultanate's chairman and CEO of Oman Public Authority for Investment Promotion and Export Development.

Mostofi, who has been the main force behind the seminar, said she was first inspired to pursue the issue after hearing a speech by the Omani official during one of her foreign trips.

Al-Ismaily, who has led his country's transformation into an attractive place for doing business, explained how his country faced the same challenges and that Iran can achieve the same with a strong plan and consensus among different bodies.

Addressing the same event, Michael Walker, a senior fellow with Fraser, and Fred McMahon, its chair of Economic Research, gave a review of the countries' status in the Economic Freedom Index where Iran stands  at a dismal 150th among 159 countries.

"As a first, you have to try and keep people in your own country," Walker said, referring to the high rate of brain drain in Iran with many educated and skilled population leaving the country every year.

Stressing that some 400,000 Iranians reside only in North America, he urged Iranian authorities to come up with ways to encourage their people to stay in their homeland–similar to what China did in the late 70s, which led to its economic turnaround.

McMahon recommended ways of reducing corruption, simplifying laws and leveling the playing field and "not throwing sand in the engine of economic growth" by putting roadblocks in the way of economic activity.

"Iran is a tolerant, open and educated society, and this makes it achievable," he said.

Starting a Movement

According to Mostofi, the entry of Fraser into Iran would be just the beginning of the arrival of major rating agencies in Iran.

She believes that will be helpful in influencing policymakers to espouse a more business-friendly attitude.

"This has already caused ripples both in the government and the parliament," she said, pointing to the attendance of Economy Ministry officials at the Monday meeting and the request ofseveral MPs for a report of the discussions. "The government and the central bank have so far been cooperative," she said.

"We also believe that a closer cooperation with rating agencies will lead to their change of perception about Iran, as it has already happened with Fraser when their staff were impressed with the level of potential and knowledge in the Iranian population and the business community."

This, she reckons, has prodded them to have a more positive mindset when rating Iran.

Mostofi also shared with Financial Tribune the business community's efforts to tap the potentials of the Iranian diaspora by soon convening a special gathering to accelerate that initiative.

Tehran's chamber of commerce, in the aftermath of Iran's nuclear deal, has formed a special post-sanctions committee comprised of senior experts and former diplomats to capitalize on opportunities created by the deal.

The efforts to reach out to Iranian expatriates in other countries are being followed up by that task group.

 "That is exactly what China did when it launched its open-door policy and will tap the resources and talents of the many Iranians living overseas," Mostofi said.