September 15, 2023
The Tehran media is shouting to the rooftops about how much better the Islamic Republic is now doing in attracting foreign investment. But it’s really doing miserably. Foreign investment in Iran was up 5 percent last year, the Tehran media is crowing, citing an annual UN report. But a look at the accompanying chart (above) will show that the lowest four years for foreign investment since Tehran started trying to attract investment two decades ago in 2002 have been the past four years.
The world is no longer interested in Iran as a place to invest. Iran attracted a high of $5 billion in investment in 2017. Since then, investment has plummeted to $1.5 billion a year. That sounds like a lot, but it is only 12/10,000ths of 1 percent of all the foreign investment plunked down around the globe last year.
After decades of seeing foreign investment as a Western trap, President Mohammad Khatami launch a major effort two decades ago to change that mindset and make Iran attractive to foreign investors. It paid off quickly. From 2002 through 2018, Iran attracted at least $2 billion a year. But in 2019, when President Donald Trump opened the sanctions sluice on Iran, the bottom dropped out and there is little interest anymore in investing in Iran. Part of the reason is how difficult it is to do business in Iran. But the major reason is probably that the Islamic Republic doesn’t make staying off sanctions a top priority and that means foreign investors are no longer interested in Iran.
