Economy, Domestic Economy

Industrialization Via Investment

Industrialization Via InvestmentIndustrialization Via Investment

Today's question is "how fast" Iran can open its doors and integrate into the global economy. It is a when, not if, and President Hassan Rouhani's administration is in a rush. That was the key message from the President's Chief of Staff Mohammad Nahavandian.

"Today the question is not: What about the sanctions?" he said in the Second Iran-Europe Business and Banking Forum on Sunday.

The three-day event, which opened on Saturday, moved focus from finance to investments on the second day. The forum is host to over 600 German and Iranian industry players in in Tehran. It was organized by Nader Maleki, president of International Bankers Forum, and Iran’s Ambassador in Berlin Ali Majedi.

Nahavadian, who was a keynote speaker on the second day of the forum alongside Minister of Industries, Mining and Trade Mohammad Reza Nematzadeh, said European businesses should shake their fear and misconceptions about Iran and understand Iran's policy shift.

"The economic policy in Iran seeks to replace imports with domestically-made goods, while Iran has always been and will be part of the global economy," said Nematzadeh.

"Our biggest mistake in the last 50 years has been focused on replacing imports."

> Snapback

In a policy turnaround, Iran is looking for investments and partnerships. But Iran's representation in the western media is hurting the effort. Nahavandian went on to rap the media for their focus on the "snapback clause" in the nuclear agreement.

Iran and the P5+1—Britain, France, United States, China and Russia, plus Germany—signed an agreement, called the Joint Comprehensive Plan of Action, last July, ending a decade-long dispute over the scope of  Tehran's nuclear energy program.

The US and EU's nuclear-related sanctions were suspended in January, after the International Atomic Energy Agency verified that Iran had taken all of its key nuclear-related steps. However, a clause in the agreement says that if at any time Iran fails to fulfill its commitments, these sanctions will "snapback" into place.

Nahavandian said the media's focus on this word was misplaced, calling it a customary legal protocol.

The western media is playing with this clause and warning about it, but if Iran wanted to go back on its agreement "would it go through all the trouble of negotiating a deal? There is no motivation for a return to the past", he said.

Nahavandian said Iran had achieved all its goals regarding nuclear energy and its attention is on economic expansion.

"All political groups now agree on strengthening the private sector. The Rouhani administration is serious about empowering Iran's private sector. Thus it is inviting its new European partners to engage Iran's private sector directly," he said.

The government is boosting transparency in its own structure and in business regulations, while supporting competition in economic sectors.

And for those who are still wary of sanctions, Nahavandian said, "We have taken a step forward. Even if sanctions return, all investment contracts signed before the presumable "snapback" will be protected from sanctions."

> Growth in Industry

Nematzadeh said the investment outlook for Iran's industry needs to be between 10 and 20 years. His ministry has come up with a decade-long plan to make Iran a newly industrialized country based on the United Nations Industrial Development Organization's criteria.

The minister added that in the plan, priorities and projects have been presented, though "the plan is a guideline and we would be happy if foreign companies take the initiative themselves".

Abbas Akhoundi, minister of roads and urban development, replaced Energy Minister Hamid Chitchian as a speaker, in a change of forum's program.

The event started on March 5 in the presence of Nahavandian, state secretary of Germany's Federal Ministry for Economic Affairs and Energy, Matthias Machnig, German Ambassador to Iran Michael von Ungern-Sternberg, Central Bank Governor Valiollah Seif, Iran's deputy foreign minister for European and American affairs, Majid Takht-Ravanchi, deputy central bank governors Akbar Komijani, Hamid Tehranfar and Gholamali Kamyab, as well as the head of Monetary and Banking Research Institute Ali Divandari.