Breakthrough deal could ...
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Foreign Minister Abbas Araghchi wrote in The Washington Post on Tuesday that Iran was “open to welcoming businesses from around the world” and stressed it was the US, not Iran, that “kept American enterprises away from the trillion-dollar opportunity” in its economy.
A day later, President Masoud Pezeshkian confirmed that the Leader “has no objection to foreign investment, even from American investors, provided it is not accompanied by plots, subversion, or wrong policies.”
Years of sanctions have scared away foreign investors and left many sectors crying out for capital. For instance, the petroleum industry alone, which is seen as the backbone of Iran’s economy and main foreign currency cash cow, would need $125 billion in investment, according to the oil minister, over four years in order to reach the targets stipulated in the country’s Seventh Development Plan. Such a hefty sum seems out of reach domestically.
Sanctions have also pushed up production and export costs by making it harder to get hold of raw materials and essential equipment. The weakened rial has only piled on the pressure, threatening Iran’s edge in global markets. Iran’s disconnection from global banking has held up export revenues, with some funds wasted in attempts to get around sanctions.
Any deal that clears the way for sanctions removal and opens the door to foreign capital, including those of US companies, could breathe life back into Iran’s production and exports. It could also help revamp crumbling infrastructure that has long suffered from underinvestment.
Sectors like oil and gas, petrochemicals, power generation, renewables, automotive and tourism could be lucrative for foreign investors as they are all in dire need of sizable investments to stay afloat and scale up.
To hit its 8% economic growth target over the next four years, Iran has no choice but to bring in foreign capital and modern technologies. If Iran’s negotiators in Oman can stand their ground and seal a win-win deal that lifts sanctions and brings investment back, it could go down in history as a turning point where Iran’s economy would start to blossom.