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All in Economy
◢ Iran is expected to welcome 20 million tourists per year by 2025, but the country currently boasts just 650 hotels.
◢ International brands are moving into the country and strong market potential means that investors can find favorable incentives and financing packages to support development.
◢ Iran suffers from a negative reputation worldwide, which does not match the domestic reality.
◢ Companies must master skills of marketing and communications to offer new perspecitves on the country and what it can offer.
◢ "Business diplomacy" has become a key skillset for multinational corporations operating in markets around the world.
◢ In Iran, the worlds of politics and business often collide making these skills part of the formula for succesful management.
◢ The Iran economic opportunity has been the source of great excitement, and the market is being touted as some kind of “dream land.”
◢ But expectations are beginning to outpace reality and a more sober assessment ofthe reforms necessary to make Iran a winning market is needed.
◢ Iran is a "game-changer" market, but demographics, macroeconomics, geography, and politics introduce risks that may make companies hesitate.
◢ The role of risk managers is to protect value, but they can and should also create value for their companies through a more proactive style of opportunity risk management.
◢ There is a vibrant but largely overlooked community of social entrepreneurs in Iran doing innovative work for the social good.
◢ A recent survey of 100 social entrepreneurs completed with the support of George Mason University concluded that while the sector is growing, more support and funding is needed.
◢ Post-sanctions trade and investment reporting has focused on three major countries: Germany, France, and Italy.
◢ But other European countries bring opportunities that should not be overlooked. A push to Iran by Poland's Economic Minister Janusz Piechociński reminds us that the story of Iran-Europe economic ties importantly extends to smaller economies as well.
◢ The Joint Comprehensive Plan of Action— a document of comprised of 159 pages, negotiated over 23 months—represents a triumph of diplomacy.
◢ Sanctions relief will be operationally challenging. Will this relief lead to investment in the Iranian banks themselves?
◢ The policy community in the US and Europe is very fearful that sanctions relief will provide Iran a dangerous windfall that it can use to expand its interventions in the region.
◢ But these concerns fail to recognize that Iran’s post-sanctions windfall will be domestically driven, will generate private investment, and will transform Iran’s political economy for the better.
◢ British businesses are now receiving advice to explore Iran opportunities —albeit in accordance with standing sanctions regulations — in order to prepare for a Iran's reentry into the global economy.
◢ With the door having been opened, British companies risk losing a key business advantage to their competitors in other Western states such as France and Germany if they do not act quickly.
◢ Most experts focus on growing antagonism between Iran and its Arab neighbors as a risk to regional prosperity.
◢ However, Iran’s large consumer-driven economy and some early success stories suggest that many GCC companies are actually very well positioned to transfer their knowhow to the Iranian marketplace.
◢ In a recent benchmarking study conducted by Frontier Strategy Group, more than 80% of the 28 multinational companies (MNCs) surveyed said they are focused on reassessing their strategic plans for Iran.
◢ These recent survey results indicate an unprecedented interest from EU- and US-based MNCs in Iran as an emerging market.
◢ Saipa, Iran's second largest auto producer, has announced a joint venture with a Chinese company called Brilliance.
◢ The arrival of Chinese designs both underscores the growing technical capacity of the Chinese auto industry, as well as the aggressive position Chinese companies are taking in Iran.
◢ For countries like Italy, Turkey, and Malaysia, tourism is among the main sources of economic value, as measured by contributions to gross domestic product (GDP).
◢ Similarly, Iran has significant tourism potential, particularly in maritime areas. This industry should be developed with international support.
◢ As politicians and analysts consider the wisdom of offering Iran sanctions relief in exchange for restrictions on the country’s nuclear program, a key stakeholder group remains unaccounted for in the debate – the private sector.
◢ Private sector leaders can play three vital roles to help bring a brighter economic and political future to Iran— interlocutors, stewards, and creators.
◢ The global energy industry continues to find greater value in efficiency and clean technology, with a rapidly growing reliance on renewable energy. But Iran lags behind.
◢ Now that Iran prepares to once again open doors to the international business community, the time is right for renewables to have a greater role in the country’s energy mix.
◢ Banks dominate Iran's financial system, largely because capital markets are small and underdeveloped.
◢ Companies have relied on loans to access capital, but over-leveraging and poor lending practices have left banks in a precarious position.
◢ There are approximately 400,000 disabled veterans in Iran, who sustained their injuries during the Iran-Iraq War.
◢ Government agencies like the Social Welfare Organization struggle to meet their needs. Public-Private Partnerships ought to be developed to help address healthcare provision for this important population.
◢ There are very few business-specific books on Iran published in English, and it can be difficult to know where to gather information and insights.
◢ However, certain works by noted economists, political scientists, and other academics contain important lessons and insights for any business leader devising a Iran strategy.
