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All in Economy
◢ Morteza Lotfi, the newly appointed head of SHASTA has recently announced a new effort for SHASTA to divest from a large portion of its portfolio, offering a second chance at the privatizations pursued a decade ago.
◢ But political barriers and a dearth of capital, particularly from foreign investors, risks rendering SHASTA's plan dead on arrival as Iran seeks to liberalize without crucial liquidity.
◢ A new survey by Bourse & Bazaar and IranPoll finds that business leaders believe Trump's rhetoric has slowed the pace of trade and investment by multinational companies in Iran.
◢ However, the results come at a time when the underlying commercial momentum seems strong. This suggests that Trump's words are having an impact not on those most directly working with Iran, but on the stakeholders on whom they rely.
◢ New deal between Azimut Group and Mofid Securities represents a landmark deal for Iran's financial services sector. Azimut Group is taking a 20% stake in Mofid Entekhab.
◢ The two companies will launch new investment offerings, largely targeting foreign investors. A capital raise will support the expansion of the local sales and advisory teams.
New survey conducted by IranPoll in partnership with Bourse & Bazaar looks at Iranian attitudes towards economic reform and foreign investment with new detail. Iranians demonstrate high degree of openness to foreign investment and the economic reforms necessary to facilitate that investment. But they want multinational companies to do more to localize their offerings effectively.
◢ MTN Group presented its interim results on August 3rd, which included an extensive look at the operational and financial progress in their Iran joint-venture, MTN Irancell.
◢ The transparent look at Iran for investors, analysts, and media is somewhat unprecedented and shows a future where major multinationals will report on Iran in the same way as any other market.
◢ European business leaders and policymakers will convene with their Iranian counterparts at a critical time during the 4th Europe-Iran Forum in Zurich on October 3-4, 2017.
◢ The business community will be meeting to set an agenda for trade and investment as the Trump administration signals its skepticism regarding the Iran nuclear deal.
◢ Japan is one of Iran's major historical trading partners. But Japanese companies have fallen behind European, Chinese, and Korean firms in post-sanctions investment.
◢ Japanese companies are now looking to European firms as they seek to balance political and reputational risks, especially in the absence of a high-level delegation to Iran.
◢ The arrival of Telepizza, a global fast-food brand, is a significant development for Iran's food service sector.
◢ The terms of the master franchise keep economic dividends in Iranian hands, and the new entrant will likely spur new investment and improvements in offerings across the sector.
◢ On Monday, Total will sign a long-awaited USD 5 billion deal to develop Iran's South Pars gas field, becoming the first international oil company to commit to a post-sanctions investment.
◢ The Total deal indicates rising confidence that political and banking challenges can be addressed, and the contract signing will likely buoy investor confidence across sectors.
◢ To win foreign investment, Iran's needs to boost development expenditures. But expansionary fiscal policy will require a new source of revenue, as oil sales remain stagnant and tax rises remain politically risky.
◢ A sovereign debt sale, long discussed by Iranian officials, is the fundamental way Iran can find the revenues to self-fund growth. The Rouhani administration must focus on making its bond offering a reality.
◢ In early April reports suggested that Iran Air would acquire its first Boeing 777-300ER nearly a year early, purchasing a plane originally built for Turkish Airlines.
◢ But the deal now seems dead and the aircraft has not made the expected flight to Victorville, California for repainting in the Iran Air livery.
◢ Start-up ecosystems in Iran, Pakistan, and Afghanistan show great promise, but entrepreneurs in these three countries remain isolated from one another.
◢ These entreprenuers would benefit from more regional programs that encourage collaboration and shared learnings. Programs on offer in the ASEAN countries offer a compelling model.
◢ The recent extension of Iran's Feed-in-Tariffs scheme has renewable energy investors pushing to close deals in the next 12 months to take advantage of the strong government incentive packages.
◢ But FiTs won't last forever, and Iranian energy authorities are working to improve the general mechanisms that support foreign investment in Iran's renewable sector, including the use of Iran's first competitive bidding tenders for renewable energy projects.
◢ The first new Boeing jetliner is likely to be delivered to Iran Air later this month in what will a historic moment for US-Iran relations.
◢ Boeing's deal with Iran Air represents a unique instance in which an American company's exports to Iran directly support American jobs. This simple fact may provide a framework on which US-Iran ties could be stablizied during the course of the Trump administration.
◢ Automation will fundamentally change labor markets around the world, with the deepest impacts being felt in the manufacturing sector.
◢ While foreign direct investment in Iran will support job growth in manufacturing in the near-term, eventually the push for efficiency gains will include automation and workforce reductions.
◢ 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.
