Iran’s plans for more foreign funding

Iran’s parliament passed a five-year economic development plan yesterday that includes a sharp rise in foreign investment, although Tehran may not achieve that while US president-elect Donald Trump is in office.

The plan lets the government arrange up to an average of $30 billion (Dh110 billion) of foreign financing each year, in addition to $15 billion of annual direct foreign investment in Iran, and up to $20 billion of foreign investment conducted with local partners.

Such volumes of foreign investment would mark a big increase from levels seen in the past few decades. Since 2000, net inflows of foreign direct investment rarely exceeded $4 billion, according to the World Bank — a small amount by the standards of major emerging markets.

Investment has been deterred by red tape and restrictive regulation and more recently by international sanctions. Many though not all of those sanctions were lifted last January after Tehran signed a deal with world powers limiting its nuclear programme.

Trump has threatened to either scrap the nuclear agreement or seek a better deal. At the very least, tighter enforcement of remaining sanctions by Washington could make companies around the world more cautious about trading with or investing in Iran.

Iranian officials have said they want foreign capital and technology to modernise a wide range of industries. The plan has to be approved by the Guardian Council, which vets legislation passed by parliament, before it takes effect.