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6/29/07

Iran Country Review: Ravand Conference 2007 in Tehran

Source: Iran Investment Monthly, Turquoise Partners

 

In this edition of country overview, a summary of the panel discussions at the recently held Ravand conference, to which Turquoise acted as one of the sponsors, is presented. This conference, dubbed by the media as the Davos of Iran, was held in Tehran for two days in May under the title of “Iran: Its Role, Security & Economic Partnership”. There were several panel discussions at the event and the most significant economic and geopolitical topics which were discussed during the conference are covered here.

 

During the opening session, which was attended by the Iranian Deputy Speaker of the Parliament, Mr. Bahonar, Iraqi Vice President, Mr. Abdul-Mehdi and the Managing director of the National Iranian Oil Company, Mr. Nozari, different topics were covered by each panelist including the new privatization program in Iran and its impact on the economy, regional confidence-building, and the importance of oil in regional and international geopolitics.  Mr. Bahonar discussed the new privatization wave in Iran under which 80% of the economy is earmarked for privatization during a span of 8 to 10 years. He emphasized the commitment of all centers of power in the country to implement the plan and added that it will revolutionize the Iranian economy by creating competition, improving quality and raising standards as well as creating employment and a more dynamic economic atmosphere. Mr. Abdul-Mehdi’s speech covered regional security issues which he suggested could only be achieved through confidence-building and partnerships. He emphasized the willingness of the Iraqi government to initiate or join partnerships amongst regional powers that could help improve regional security which would in turn facilitate greater prosperity. Dr. Nozari provided the audience with some interesting facts and statistics about oil and gas reserves in the region in comparison to the world and concluded that the importance of energy has turned oil into a foreign policy tool that could have serious geopolitical implications such as recent conflicts in the region.

 

 

Security and oil were also major topics during the second panel that had experts like Iranian ex-Defense Minister, Rear Admiral Shamkhani, and Dr. Rosemary Hollis from Chatham House in the UK as panelists. While Rear Admiral Shamkhani criticized the US and the UK’s adventures in the region, particularly the occupation of Iraq, thus bringing under question their real intentions in the region, Hollis explained Britain’s balancing role between regional countries and the US. Both individuals, however, agreed that a key solution to the various problems of the region is recognition of Iran’s role and security by the Western powers as well as a broad face-saving solution to the nuclear standoff between the major Western countries and Iran.

 

In a more finance and investment-oriented panel, representatives of the bourse, the private sector, the privatization organization and foreign banks were present. The role and importance of foreign investment in meeting the ambitious targets of the fourth five-year development plan (2005-2010) was discussed in detail and the panelists pointed out several hurdles and limitations that are causing shortages in foreign investment. The main obstacles faced by  foreign investors in Iran included lack of up-to-date and pragmatic legislation, bureaucratic difficulties, and last but not least, the political risk brought about by the aggressive tactics of  certain countries intended to limit investment in Iran and deter interested investors. Overall, this panel confirmed that business opportunities in Iran are enormous and there is great appetite for investment in Iran if the mentioned difficulties are eased a little. There was a further perspective that the real problem of the Iranian capital markets is not the shortage of liquidity or capital but rather restrictions imposed on more innovative and effective utilization of capital. In regards to privatization, the panelists discussed a fundamental question about whether economic liberalization should take place before or after privatization. According to Mr. Kord-Zanganeh, President of Iran’s Privatization Organization, the main hurdles facing the process of privatization are constitutional and regulatory ambiguities as well as the lack of knowledge at different levels of government and society in regard to the new privatization plan and its economic benefits. However, he said that the government has sent a bill to the parliament clarifying many of the ambiguities and setting the boundaries of the country’s private, public and cooperative sectors in order to realize a more efficient approach for implementing the ambitious goals of the privatization program.

 

Overall, this conference, which was one of the only forums in which both Iranian and international figures and executives were gathered to answer questions regarding some of the most challenging economic, political and security issues that affect Iran, the Middle East region and the international community as a whole, appeared to be quite successful.  Most participants indicated that it was able to realize its goal of promoting partnership and understanding amongst regional players as well as addressing the internationalization requirements of Iran. Turquoise is pleased to have been a sponsor of this prestigious event and is looking forward to future cooperation with the Ravand Institute.

 

About Turquoise: Turquoise is a boutique investment bank based in Iran with offices in Tehran and London. Turquoise publishes Iran Investment Monthly with the aim of keeping its recipients updated on the latest macroeconomic developments in Iran, providing an in-depth analysis of the Tehran Stock Exchange as well as introducing new financial products and private equity opportunities to potential investors. For more information please visit: www.turquoisepartners.com/iraninvestment

 

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