June 22, 2018
According to the International Monetary Fund, Iranians set a new record for pulling money out of the country last Persian year: $27 billion. The worst year in terms of capital outflow, before last year, was the 2010-11, when capital flight totaled $25 billion.
The capital fleeing the country far exceeds the foreign investment coming into the country, which set a record high of $5 billion last year, a pittance compared to the flight.
Capital flight came to nearly $135 billion over the decade from 2006-7 to 2016-17, the daily Iran reported.
Farhad Ehteshamzadeh, the chairman of Imports Federation of Iran, said capital flight over the past 40 years since the revolution has amounted to more than $800 billion.
Ubiquitous satellite TV commercials and newspaper advertisements encourage Iranians to invest abroad. The Financial Tribune said, “The interesting point is that the target audience of these advertisements is no longer the wealthy investors from the affluent, upper class. Today, the Iranian middle class, including rank-and-file employees of public and private companies, is also attracted by the lure of investment in other countries. Some even sell their homes and other properties.”
According to Majid Reza Hariri, the deputy head of the Iran-China Chamber of Commerce, the number of applications for immigrant investor visas has increased significantly in recent years.
He said more than 100,000 people are awaiting investor visas in China while over 1.5 million have applied for Australian and Canadian permanent residency. “The investment needed for acquiring such visas is between $150,000 and $500,000,” he said.
Economist Ali Rahmani told the Financial Tribune that when the risks of investment in one’s own country are too high, investors look abroad.
“Foreign countries are in constant competition to absorb investments and Iranians’ resources are one of their targets. They offer special incentives like visas and employment to investors because such promotional strategies are appealing to Iranians,” he said.
“That should be a cause for concern for top officials. They need to improve the business environment and the safety of investment in the country.”