DUBAI Jan 15 Iran's parliament passed a
five-year economic development plan on Sunday that includes a
sharp rise in foreign investment, though Tehran may not achieve
that while U.S. president-elect Donald Trump is in office.
The plan lets the government arrange up to an average of $30
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
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, estimating
the key oil and gas sectors need about $180 billion of funds for
expansion and maintenance during the next decade.
The development plan, many details of which have yet to be
published, calls for efforts to create jobs and curb inflation,
which the government of President Hassan Rouhani has brought
down to single digits from over 40 percent a few years ago.
But as part of the plan, lawmakers earlier approved
expanding military spending to 5 percent of the annual budget
from almost 2 percent previously. This would include developing
Iran's long-range missile programme, which Trump has pledged to
The development plan also features aspects of a "resistance
economy" promoted by Supreme Leader Ayatollah Ali Khamenei, who
has called for Iran to make its economy more self-sufficient so
that it can resist outside pressure.
The plan has to be approved by the Guardian Council, which
vets legislation passed by parliament, before it takes effect.
(Reporting by Dubai newsroom; Editing by Andrew Torchia and Tom