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Iran's business environment still lagging despite improvements

Iran's business environment is forecast vastly improve in the next five years but still lag far behind most of the world's leading economies, according to a survey carried out by the Economist Intelligence Unit, IRNA reported from London.

In its survey of 60 countries, the EIU calculated that Iran's business environment would improve by rating of 1.2, the second highest after Russia, between 2003 and 2007.

But the increase to a total score of 4.64, slightly lower than the 4.82 forecast from 2002 to 2007, will move Iran up just by one place to 59th position, ahead of Nigeria, compared with the five year period to 2002.

The grading seeks to measure the attractiveness of a country to sustain net foreign capital inflows and considers 70 quantitative and qualitative indicators across ten categories of the business environment.

The EIU predicted that the overall trend in the global investment climate, except for the US, UK and Venezuela, would continue to grow over the next five years, albeit at a lower level than last year's forecasts, despite the world's economic slowdown.

The US was expected to fall back from having the best business environment in the world to fifth place, behind Canada, the Netherlands, Finland and even the UK, despite its fall in rating.

Canada's top position was due to an increase in its total score by 0.07 to 8.65, while the US was predicted to fall by 0.15, the highest amount, to 8.47.

The lower forecasts of improvement were largely attributed to the increased risk of international terrorism and the holding back of global recovery due to the long run-up to the Iraq war.

Of Iran's neighbours included in the list, Saudi Arabia's rating over the period was expected to improve by 0.76 to 6.16 over the next five years but stay in 41st place and Turkey was forecast to decline two positions to 47th with a score of 5.75, despite improving by 0.5.

Azerbaijan was predicted to improve its rating by 0.91 to 5.28 and move 4 positions to 52nd, while Pakistan was expected to fall back one place to 56th despite a 0.6 improvement in a score of 5.17.

Economic security promotes foreign investment

Deputy Head of Majlis Energy Commission Ahmad Azimi said in Tehran on Tuesday that investment security and incentive-driven tax system are important elements for promoting foreign investment, IRNA reported.

He told IRNA that private investors before committing capital to projects critically assess the investment and economic security of a country.

"Putting forth unwarranted issues by some people is the major cause of capital flight from the country," the MP from southern provincial capital of Shiraz added.

He said that efforts have been made by the government officials and MPs to remove hurdles on the way of higher investments.

Promotion and support of foreign investments, tax reform and exemption on some types of taxes are important policies enacted aiming to boost industrial production and manufacturing, Azimi said.

Meanwhile, Deputy Minister of Economy and Finance Mohammad Khazai said earlier in July that the number of applications for foreign investments rose in Iran last year and equaled the total foreign investments commitments in the past decade.

Khazai, also head of Iran Foreign Investments Organization, said hat with the passing of the new foreign investments law investments application has topped four billion since last July.

In a decade (1992-2002) close to 4.5 billion of foreign investments were committed in the country, he added.

He said that the mining sector drew dlrs 1.242 billion and industrial sector dlrs 1.4 billion of foreign investments in recent year up to March 2003.

Khazai said foreign investments does not only entail garnering financial resources and covering budget deficiencies, it also means greater access to new technologies, employment, generating schemes, and increase productivity and more efficient management.

... Payvand News - 7/16/03 ... --

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