Deputy Economy Minister Behrouz Alishiri said investment potentials in Iran grew by 10 percent in the global capital market after the imposition of sanctions.
“Investing in Iran has many advantages. Above all Iran has a good strategic and geopolitical position and this position is almost unique. Among advantages of this position is easy and rapid access to regional and Middle eastern countries,” said Alishiri who was addressing a one-day conference on Iran’s investment opportunities in Malaysia, the Persian daily ‘Iran’ reported on its Tuesday issue.
In addition, Iran’s market includes 70 million people with great demand which can be the most important factor in all decision-makings as a start, added Alishiri.
He emphasized that investment in Iran generate higher profit than any other places in the world.
“Perhaps doing business and the circulation of various affairs is not simple in Iran as much as it is in some other countries, but it should be borne in mind that Iran’s strategic access is unparalleled,” said the official.
Alishiri recalled that Iran is blessed with rich hydrocarbon resources and is the fourth greatest producer of crude oil in the world.
Moreover, Iran has the second largest natural gas reserves in the world and ranks tenth and fifth in the world in terms of tourism and ecotourism attractions, respectively, he continued.
The country ranks first in the Middle East and North Africa in terms of industrial foundations and infrastructures and it has a high growth in gross national product (GNP). Last year, most countries experienced a negative economic growth rate while the growth of the national economy was quite favorable, Alishiri noted.
Iran ranks sixth in the world based on inward Foreign Direct Investment (FDI) performance, the latest report released by a UN agency showed.
Data released by the United Nations Conference on Trade and Development (UNCTAD) showed that Iran attracted more than $3billion of direct investment from abroad in 2009, which is twice the amount of the previous year.
This is despite the fact that global FDI inflows dropped during 2009 as compared to the previous year.
The UNCAD ranking is for the year 2009, the most recent year available, and examines the economies of 141 economies.
The Inward FDI Performance Index displays a country’s relative success in attracting global FDI.
Meanwhile, the report finds that the plunge in FDI caused by the global recession bottomed out towards the end of 2009, and a modest recovery actually began in the first half of 2010.
It predicts also that global FDI inflows will climb to over $1.2 trillion in 2010, and continue to expand in 2011 and 2012, although such resurgence depends on continuation of the so-far fragile economic growth that has followed the downturn.
Alishiri announced earlier in July that that according to the reports released by the International Monetary Fund, foreign investment in Iran has risen from $900 million in 2007 to $3 billion in 2009.
Alishiri, who is also the Director of the Organization for Investment, Economic and Technical Assistance of Iran, said that cheap energy resources and a skilled work force were among the reasons for foreign investment in the country.
In April, Iran’s Finance Minister Shamseddin Hosseini said the country’s economic indicators have improved over the last year, despite the global economic crisis.
Various economic indicators, including those defining the inflation rate, stock exchange, exports, and imports became more positive over the last Iranian year (ended March 20), Hosseini stated.
Azadegan Oilfield Talks With China
Iranian Deputy Oil Minister Mohsen Khojasteh-Mehr said the country has held talks with China for the development of the Azadegan oilfield, a report said.
The senior Oil Ministry official told Mehr News Agency on Monday that Iran has been engaged in discussions with Chinese companies for the further development of the giant oilfield in the southwest of the country.
“The development of the oilfield has not stopped despite the discussions (for its expansion),” he went on to say.
Khojasteh-Mehr also pointed out that the Islamic Republic seeks to increase oil output from the joint oilfield with the participation of Iraq.
Azadegan is Iran’s largest onshore oilfield which the country shares with Iraq.
Iran currently extracts over 50,000 barrels of oil per day from the field.
It is one of the biggest oilfields discovered in the world in the past thirty years.
Azadegan oilfield, which has about 42 billion barrels of oil, was initially to have been developed with Japanese oil and natural gas producer Inpex Corp.
In mid October, Inpex said it has agreed with Iran’s state-owned National Iranian Oil Co. to exit from Azadegan oilfield in the face of US sanctions against companies doing business in the country.
The Japanese company in 2006 significantly lowered its stake from 75 percent to 10 percent due to worries about the risk of sanctions imposed on Iran over its civilian nuclear program.
Iran is the fourth-biggest oil supplier to resource-poor Japan.
On July 26, the European Union imposed new sanctions on Iran, which mainly target investment in and technical assistance to Iran’s refining, liquefaction, and liquefied natural gas sectors.
The EU sanctions followed UN and US sanctions on Iran over its nuclear program.
Entekhab Signs Daewoo Deal
Creditors of South Korea’s Daewoo Electronics Corporation signed a final deal to sell Korea’s third-largest electronics company to Entekhab Industrial Group of Iran on Monday.
Daewoo Electronics, which has been under a debt rescheduling program since August 1999, is a former subsidiary of the now-defunct Daewoo Group. Creditors acquired a combined 97.5 percent stake in Daewoo Electronics through a debt-for-equity swap, Yonhapnews reported.
Since selecting Entekhab as the prime bidder in April, creditor banks led by Woori Financial Group have been in talks with the Iranian firm to set a price.
The price for the controlling stake was reportedly set at 577.7 billion won ($518.7 million), which is less than the 605 billion won Entekhab proposed initially. The buyer will take over Daewoo Electronics’ outstanding assets and debts along with the stake.
“The transaction will be completed if Entekhab Industrial Group pays for the stake within three months,” a creditor bank official said.
The Iranian buyer plans to make a major investment in Daewoo Electronics to expand its market share to 10 percent of the Middle Eastern and African markets by 2013.
Offer to Help MENA Build Quake-Resistant Homes
Deputy Minister of Housing and Urban Construction said Iran is ready to transfer its know-how to the Middle East and North African (MENA) nations in the construction of quake-resistant and inexpensive housing units.
Mahmoud Fatemi-Aghda announced that Iran was elected as regional coordinator of CIB (International Council for Research and Innovation in Building and Construction) in MENA region during CIB International Conference on “Innovative Building Technologies for Affordable Mass Housing” which was held in India in Oct. 28, IRNA reported.
Building and Housing Research Center is in charge of holding training courses, making coordination among members, planning and disseminating information, he added.
CIB is a worldwide network of over 5000 researchers and experts from about 500 organizations in the building and construction sector, and includes almost all the major national building research institutes in the world. CIB was established in 1953 with the support of the United Nations to help rebuild Europe following the ravages of the World War II.
Ministry of Housing and Urban Construction and a Turkish investment company signed a memorandum of understanding (MoU) on construction of 5,000 housing units in new city of Amir Kabir, Markzi province.
Announcing the above, head of Markazi governor general office for international relations, told Mehr News Agency in Arak that the Turkish company is to contribute to this project.
Utilizing all existing capacities to expand the sector is among the government’s priorities, he said, adding huge potentials of Iran’s housing market have drawn the attention of foreign investors.
Stating that Iran and Turkey boast many commonalities, Keyvan Goudarzi said apart from investing in housing sector and construction of commercial complexes, this foreign company has voiced its readiness to invest in Arak Airport for expansion of its lines.
Amir Kabir city is located 35 km off Arak-Qom Highway.
In related news, Minister of Housing and Urban Development Ali Nikzad in a meeting with Turkish Public Works & Housing Minister Mustafa Demir (in July 2010) had said,” Iran and Turkey have the same condition on natural disasters.” “It is necessary that the two countries expand their cooperation in this regard,” he said, IRIB reported.
“Implementation of Joint projects by the two countries’ contractors in the field of construction in other countries is other opportunities for bilateral cooperation,” the minister reiterated.
Nikzad also called for participation of Turkish companies in big urban construction and tourism projects as well as construction of new towns in Iran.
“We are happy that our Turkish brothers are active in construction of low-cost residential units for Iranian nation. We expect they transfer their experiences and technologies to Iranian experts,” he added.
The Turkish minister, for his part, said that presently Turkish citizens have access to inexpensive yet high-tech buildings adding Turkey has turned into the second-biggest exporter of construction materials in the world after China.
UAE Businessmen Face Obstacles
United Arab Emirates’ businessmen and traders met with the deputy ruler of Dubai on Monday to complain of obstacles they face when doing business with Iran due to banking restrictions, the UAE’s official state news agency Wam said.
Iran’s ties with Dubai have drawn scrutiny from the United States and other Western nations seeking to isolate Tehran over its peaceful nuclear activity.
Businessmen, including exporters and importers of foodstuffs, building materials and medicines meeting with Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum urged the government to “intervene to mitigate losses incurred by the trade sector”, Wam reported.
Sanctions against Iran by the European Union, United Nations and United States have limited UAE’s trade with Iran.
Restrictions by banks included non-opening of permanent credits and the provision of the necessary finance to meet contractual obligations, the group told Sheikh Maktoum.
“The traders also discussed with Sheikh Maktoum trade barriers they are encountering in regards to UN-approved reexports of foodstuff, goods and commodities,” according to the report.
Iran and the UAE have close economic and historic relations. Tens of thousands of Iranians live and work in trade hub Dubai and elsewhere in the UAE, many of them involved in the multibillion-dollar reexport trade to Iran.
Iran is one of the UAE’s closest trading partners, with around $8 billion (Dh29.4 billion) in bilateral trade in 2009 after a peak of $12 billion in 2008, according to figures by the UAE-Iran Chamber of Commerce.
The UAE traders and business people have undertook huge loses due to sanctions.
Following the June 9 UN Security Council resolution, the US and EU imposed unilateral sanctions against Iran over its nuclear program, mainly targeting the country’s energy and banking sectors.
Washington will deny access to US markets for those companies that supply Tehran with refined petroleum products.
Car Plate Production
Iran plans to open a plant in Chaharmahal-Bakhtiari province (southwestern Iran) to manufacture galvanized steel plates for the auto industry.