Iranian Global Economics

Iran's economy is a mixed economy. Two of the country's four main exports consist of Persian rugs and Petroleum - the latter constituting 80% of exports. The government imports commodities and foodstuffs to supplement domestic industries, yet the functioning of the economy relies on the oil sector (CIA Factbook)*


- 2002 layout of Iran's economy, from Iranian government sources*

* There is a chance these sources (The CIA and the Iranian Government) are misinformed and/or misreporting statistics

The Iran Foreign Investment Company (IFIC) was incorporated in March 1998 as a Private Joint Stock company with a mission to manage and expand Iranian holdings abroad (IFIC). The company claims to have energy, telecom, industry, mining, and stock market ventures - among others - in the countries of Germany, Brazil, Egypt, Jordan, Sudan, Yemen, Namibia, Oman, the U.A.E and Armenia. Recently the Iranian government has sought economic ties with Portugal, and continues to maintain strong relations with countries such as Indonesia, and other eastern States. (FIC)


IFIC Headquarters

Source: IFIC website: http://www.ifi-co.com/

The process of enacting economic sanctions on Iran has been complicated by the presence of western oil companies already in Iran, and the Iranian governments strong desire to strengthen the oil sector to support a crippled economy. In April the U.S government identified 41 companies as having commercial activity in Iran's oil and gas sector. Among these companies was Shell, and Spain's Repsol. Experts agree that Iran will need about $200 billion to develop a vital oil sector, yet the countries perceived progression to a nuclear arms buildup have spurred calls for increased sanctions, thus stalling foreign companies' investment decisions.(AP)


Iranian Oil Refinery

On May 10, Iranian officials issued an ultimatum to Shell and Repsol, claming they will be replaced with domestic companies if they chose to back down in the face of pending sanctions.






The ability for Iran to develop its oil sector is crucial for the economy to survive. Yet a thriving economy would most likely translate into the current regime's ability to maintain a hold on power. In the face of egregious human rights violations, Western companies will most likely heed the calls of their government. Yet Iran's ability to attract non-western investors will determine the future of its economy.

SOURCES:

"Iran Warns Shell, Repsol on Investment Delay" Associate Press. May 10, 2010. found online at Bloomberg Business Week: http://www.businessweek.com/ap/financialnews/D9FJURG80.htm

CIA World Factbook Online

IFIC Website

All images taken from Bing.com