Iran News ...


3/29/05

Attraction of foreign, private investment vital for Iran

By: Behnaz H. Gholipour

Tehran, March 29, IRNA-Economists and economic and financial planners believe that the government's fourth five-year economic, social and cultural development plan (2005-10) would be a major challenge and hard to attain targets in the coming years.

The government is believed to face acute budget deficits in various economic sectors, including agriculture, tourism, industry and so on, which would make it impossible to meet all the targets.

Failure to meet the objectives and make up the deficit would result in soaring rates of inflation and unemployment as well as price hikes.

This is something against which a majority of parliament members have thus far raised alarms and cautions, calling for careful planning and budgeting mechanisms.

There are even talks of a 68.3 percent growth in this year's general budget deficit compared to the figure for last year, which is estimated to reach rls 70.757 billion.

The government announced last year it would import cars to make up the deficit but a word of caution: the imports would provoke 30 percent bankruptcy of domestic spare parts production industry.

Given the government's weak financial authority in the fourth plan, which begins as of this year, it is needed to adopt necessary plans to attract more capital through foreign and private investment.

The state budget has allocated a tiny share for development and production sectors, which are the key to economic growth of the country.

This year's budget stipulates only rls 60,000 billion for development and production projects in 30 provinces of the country, which is a very small amount of budget.

There are many lucrative investment opportunities in different parts of the country which have unfortunately remained untouched, awaiting investment.

For instance, Charmahal-Bakhtiari province has good potential and can lure large amount of investment.

The province is a good venue for investment in view of its economic status, its oil, gas, petrochemical sectors, fisheries, agriculture, infrastructures, mineral water, tourism and industry.

A group of 20 foreign investment teams from Germany, Arab states and the Persian Gulf littoral states such as Kuwait, the UAE, and Qatar reportedly toured different parts of the province last year to gain a first-hand account on feasibility of investment there.

Iran's Chabahar port in southeastern Sistan-Baluchestan province is also a good hub of investment given its access to free waters and its potential for economic, commercial, industrial, tourism and academic development.

The port city is also of importance for oil, gas and petrochemical investment because of its vicinity to the world's major oil markets.

Hard efforts are needed for attracting foreign investment in national development, production and industrial sectors.

For example, well-known entrepreneurs and investors can be invited into the country -- as was the case with the group of 20 investing group that visited Charmahal-Bakhtiari province last year -- to assess feasibility of investment there.

There have been reports that a 47-year-old Saudi capitalist, Prince Walid bin Talal bin Abd al-Aziz al-Saudi, visited Iran last year to examine investment opportunity, especially in the hoteliering sector.

The prince has made dlrs 21.5 billion investment in the US, notably in its internet business.

He had once visited Iran along with his father during childhood.

China has been able to record 5,444 cases of investment, worth about dlrs eight billion, only in January and February, 2005.

These all serve as good lessons for us to take strong measures for absorption of investment to meet necessary financial shortages.

Besides attraction of foreign investment government and officials can take other necessary mechanisms for offsetting any shortages by selling participation bonds, establishing necessary infrastructures for economic development, directing investment to production sector and preparing suitable ground for investment by the non-government sector.

Any failure to meet the shortages would give rise to many other economic problems such as spiraling inflation and price hikes as well as decline in agriculture, which is the key and backbone of the country's progress and development.

So, government should pay more attention to attraction and use of foreign and domestic investment to meet its long-term economic and financial objectives.

... Payvand News - 3/29/05 ... --



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