UNCTAD: Decline in Foreign Investments in Iran

Radio Farda - The 2015 report from UNCTAD, released on Wednesday evening, shows that Iran's share of foreign investment in the world has decreased again. Mohammad Zarghami asked Fereydoun Khavand about the developments in foreign investments globally as narrated in the latest report from UNCTAD. Fereydoun Khavand: "UNCTAD, which stands for the United Nations Conference on Trade and Development, publishes a very important report every June regarding the latest developments and data related to foreign direct investments worldwide. The 2015 report indicates that in 2014, the volume of foreign investment globally fell by 16% compared to the previous year, reaching approximately $1.2 trillion, due to various reasons including stagnation in global growth and rising geopolitical risks. However, what stands out in this report is the dominant position of developing countries both as capital exporters and as recipients of investment. The days when multinational companies were solely Western are over. Now, multinationals from China, India, South Korea, South Africa, Brazil, and others are increasingly investing here and there, including in Europe and America. On the other hand, we see that in 2014, 55% of foreign investments were made in developing countries, with China becoming the world's most significant recipient of investment. The global economy is undergoing very important transformations. Regarding Iran, UNCTAD reports a decline in foreign investment. Why has this decline occurred? In 2012, foreign investment in Iran reached $4.662 billion, but this volume fell to $3.4 billion in 2013 and again dropped by 31% in 2014, reaching $2.105 billion. In other words, from 2012 to 2014, foreign investment in Iran decreased to less than half. The question arises as to why, despite the coming to power of Hassan Rouhani's government and the Geneva agreement, foreigners are investing less in Iran. In fact, this decline is not surprising, as it is a logical continuation of sanctions, and investors are waiting to see the final outcome of the nuclear negotiations before making decisions regarding Iran. Will foreign investment in this country actually increase with a final agreement on Iran's nuclear case? Lifting sanctions is a necessary condition for a massive influx of foreign investments into Iran, but it is not a sufficient condition. Existing barriers in Iran's business environment must also be reduced.