Iran’s New Year
Causes for Optimism?
Reformists’ gains in Iran’s recent elections show the extent of Iranian public optimism regarding the potential for economic improvement through President Rouhani’s policy of engagement with the West. As Iran seeks to end its political and economic isolation, the foreign investment community is monitoring what liberalisation measures Rouhani will now take to create opportunities, and in which sectors there will continue to be constraints on FDI as a result of military dominance. this article examines the political developments, resulting changes in the business climate and areas of potential risk of which potential investors should be aware.
Post-JCPOA Iran: Sufficient Progress?
on 20 march 2016, Iran’s supreme Leader ayatollah Ali Khamenei delivered a speech to mark the beginning of Nowruz, Iran’s new Year festival, in which he took the economy as his theme. Khamenei’s speech is likely to set the tone for the political year ahead in Iran. Despite stating his approval of the nuclear agreement and his ongoing support for president Rouhani, Khamenei emphasised that remaining banking sanctions were still acting as a deterrent for foreign investors in Iran. He warned that if Iran does not see sufficient economic benefit and foreign investment from the suspension of its nuclear programme, it may be forced to rethink its position.
Khamenei also emphasised that Iran would not bow to us pressure to halt backing ‘resistance’ activities overseas. These are led by Iran’s Islamic revolutionary Guard Corps (IRGC), a military body with extensive business interests which remains under sanctions related to its alleged support for terrorism.
Khamenei’s speech highlights the challenges for foreign investors seeking to take advantage of business opportunities in Iran. Though many Iranian banks were removed from the us treasury’s office of foreign assets Control (OFAC)’s specially Designated nationals (SDN) list on 22 January 2016 as part of the Joint Comprehensive plan of action (JCPOA), others remain, while dollar transactions involving Iran are still largely prohibited.