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All in Economy
◢ Iran's blue-collar workforce is the backbone of the country's economy, but has been largely overlooked by international policymakers and business leaders as a key stakeholder group.
◢ The new populist political environment in the West requires new ways of positioning the Iran Deal. Increasing awareness of Iran's working class could be a powerful way to connect to Western electorates.
◢ Swedish Prime Minister Stefan Löfven visited Scania's truck manufacturing facility in Qazvin, Iran on Sunday.
◢ The trip marked an important milestone for Scania, whose perseverance and leadership in Iran's market is being rewarded with new contracts and a clear route to growth.
◢ A preliminary agreement between OMV and Dana Energy heralds the push for privatization in Iran's oil and gas sector
◢ While the majority of contracts have been signed with state-owned oil firms, the new IPC framework enforces structures and management practices that support privatization
◢ Iran's inability to link with the European banking system stems in part from a lack of capacity in key governance and compliance functions.
◢ In the 1990s, European governments launched substantial "training and technical assistance" programs to help post-Communist states raise standards. Iran needs similar programs, and a model from Sweden may be the most effective.
◢ Youth unemployment continues to be a stubborn issue in Iran, with economic growth too low to generate sufficient job opportunities.
◢ Following the examples of countries like Germany and India, Iranian policymakers could do more to spur job creation through innovative entrepreneurship programs.
◢ A German plane spotter has photographed a brand new Airbus A321 in Iran Air livery.
◢ The aircraft lends credence to reports that Iran Air and Airbus are on the cusp of finalizing their contract and that the first deliveries of aircraft will take place in early 2017.
◢ As Henkel's recent moves show, investments can be made most quickly and with the largest economic impact in Iran's private sector.
◢ By targeting 100 private sector companies, with a maximum average transaction value of USD 100 million, just USD 10 billion could fundamentally change Iran's economy.
◢ Hypermarkets now account for 2% of the total value of the grocery market in Iran, and 15% of the market in Tehran.
◢ But as hypermarket growth begins to stall in Europe, retailers in Iran should take heed. Similar consumer trends are likely to manifest in Iran in the coming years. Big stores won't be enough to win sales.
◢ The IRGC reportedly controls up to 40% of Iran's economy. The scale of these holdings is in line with historical levels of state ownership seen in OECD countries.
◢ US policy should apply a more nuanced approach to state-owned enterprise in Iran, and induce the market forces that are already proving to support privatization.
◢ News regarding the Airbus deal, the gas industry, and the US election mark progress in Iran's frustratingly slow post-sanctions development.
◢ But the recent increase in the incremental steps taken for Iran's economic growth should be encouraging, as the math behind Zeno's Paradox demonstrate.
◢ The master plan for IKIA Airport City is one of the most ambitious in Iran and will require USD $50 billion in investment to achieve.
◢ Creating an airport city is not just about new transport links, but also about creating new models of collaboration between state and private actors.
◢ While Iranian companies have successfully engaged international legal counsel in arbitration, the use of outside counsel in commercial negotiations is limited.
◢ The track record of Iran's commercial deals with foreign firms demonstrates how proper legal counsel is necessary to help protect Iran's commercial interests.
◢ China's outward M&A has hit a record USD $207 billion this year, with major Western multinationals the primary target, including companies active in Iran.
◢ Though Iran has looked to the West post-sanctions, the new acquisitions may force Iranians to deal with the strategic implications of Chinese ownership across industries.
◢ Though initially reported as a Series A for ride-sharing app Snapp, MTN has made a EUR €20 million investment in the parent company Iran Internet Group
◢ But MTN's solo play breaks with a clear pattern of co-investment with Germany's Rocket Internet and it is unlikely Rocket would allow its dilution in this latest round
◢ Following the approach of most Iranian state owned enterprises, Iran Air has not engaged outside counsel for its negotiations with Airbus and Boeing.
◢ Hesitation to work with international law firms may be impacting the speed and effectiveness of negotiations.
◢ Iran's start-up ecosystem is dominated by the two VCs that have been successful securing foreign investment.
◢ With little competition, these VCs and their start-ups are beginning to form competitive "blocs," limiting opportunities for collaboration and innovation.
◢ Women suffered disproportionately in Iran's economic downturn. Since 2005, the actual number of women in the workplace has fallen by nearly 1 million.
◢ But the dearth in opportunities has spawned an entrepreneurial streak among many Iranian women.
Iran's businesses have a responsibility to protect the environment alongside the government and civil society. Companies should be motivated by both profit and an ethos of corporate social responsibility to adopt more sustainable practices.
◢ Iran's Ministry of Energy has devised Energy Conversion Agreements (ECAs) to encourage investment in power generation
◢ Investment is needed to upgrade an energy grid currently prone to 25% energy loss at peak times
◢ Entrepreneurial change starts with the individual, but is buoyed by favorable trends
◢ Megatrends in demographics, economics, communications technology and capital are driving growth in Iran's tech sector
