April 21, 2017
Economy Minister Ali Tayeb-nia said foreign investment approved in the just-completed Persian year totaled $12 billion, almost six times as much as came to Iran in each of the last two years.
Iranian figures on foreign investment must be treated with a grain of salt. A more reliable figure is the one that will be produced several months from now by the EU’s statistical arm that will show total investment by all 28 EU member states in Iran.
Another concern with Tayeb-nia’s figure is that he gave it out just five weeks before the presidential election. President Rohani and his opponents have all emphasized the state of the economy, as they perceive that is what is of greatest concern to voters. Government officials have been pressed to issue good news numbers.
The $12 billion figure compares with the following figures on foreign investment in recent years released by the World Bank: $2.05 billion in 2015, $2.1 billion in 2014, $3.05 billion 2013 and $4.7 billion in 2012.
Furthermore, only 11 days before Tayeb-nia spoke up, the head of the Foreign Investment Office, which is in Tayeb-nia’s ministry, said the country approved $9 billion of foreign investment in the last Persian year.
Another issue with the figure is that, if it is true, it destroys the regime’s argument that the United States is sabotaging foreign investment to keep Iran weak.
Yet another problem is that the Trade Ministry said in late November that it had approved only $1.6 billion in foreign investment since sanctions were lifted in January. That suggests a rather substantial surge in recent months.
Finally, these numbers are for foreign investments that the government has approved. That is not the same as foreign investment actually made. Not all approved investments come through. Also, an approved foreign investment may be made over several years, with little actually made in the year of approval.
Tayeb-nia said Iran has signed memoranda of understanding covering $50 billion in possible investments, which would mean Iran has converted almost a quarter of those MOUs into contracts. However, Reuters said in January that it had totaled up the amounts announced in all the MOUs signed since sanctions were lifted and they came to $80 billion.
Reuters also said that more than 80 percent of those MOUs were signed with state-owned businesses, essentially freezing out the private sector.
