DUBAI, Jan 15, (RTRS): Iran’s parliament passed a five-year economic development plan on Sunday that includes a sharp rise in foreign investment, though Tehran may not achieve that while US president-elect Donald Trump is in office.
The plan lets the government arrange up to an average of $30 billion of foreign financing each year, in addition to $15 billion of annual direct foreign investment in Iran, and up to $20 billion of foreign investment conducted with local partners.
Such volumes of foreign investment would mark a big increase from levels seen in the past few decades. Since 2000, net inflows of foreign direct investment rarely exceeded $4 billion, according to the World Bank — a small amount by the standards of major emerging markets.
Investment has been deterred by red tape and restrictive regulation, and more recently by international sanctions. Many though not all of those sanctions were lifted last January after Tehran signed a deal with world powers limiting its nuclear programme.
Trump has threatened to either scrap the nuclear agreement or seek a better deal. At the very least, tighter enforcement of remaining sanctions by Washington could make companies around the world more cautious about trading with or investing in Iran.
Iranian officials have said they want foreign capital and technology to modernise a wide range of industries, estimating the key oil and gas sectors need about $180 billion of funds for expansion and maintenance during the next decade.
The development plan, many details of which have yet to be published, calls for efforts to create jobs and curb inflation, which the government of President Hassan Rouhani has brought down to single digits from over 40 percent a few years ago.
But as part of the plan, lawmakers earlier approved expanding military spending to 5 percent of the annual budget from almost 2 percent previously. This would include developing Iran’s long-range missile programme, which Trump has pledged to halt.
The development plan also features aspects of a “resistance economy” promoted by Supreme Leader Ayatollah Ali Khamenei, who has called for Iran to make its economy more self-sufficient so that it can resist outside pressure.
The plan has to be approved by the Guardian Council, which vets legislation passed by parliament, before it takes effect.
Meanwhile, Iran exported 11 million barrels of condensate to South Korea in December, partly delivered from tankers located outside the Gulf, the Iranian oil ministry’s news website SHANA said on Sunday.
“Three South Korean companies bought a total of 11 million barrels of gas condensates from Iran in December, so the Asian country remains the biggest receiver of condensate from Iran,” SHANA said.
The report was published as a denial of a Reuters story that quoted a source with knowledge of Iran’s preliminary tanker schedule as saying Iranian condensate exports were set to fall 17 percent to a five-month low in January, as main buyer South Korea cut purchases by nearly half and takes more barrels from Qatar.
“It appears that Reuters’ report is based on monitoring of vessels passing through the Strait of Hormuz (at the mouth of the Gulf), while Iran had several supertankers full of condensate located since earlier in open seas and near China that covered some of theses sales,” SHANA said.
Although Reuters’ report referred to January sales, SHANA did not give condensate export figures for January.
Iran, a member of the Organization of the Petroleum Exporting Countries, does not publish monthly data on its condensate and crude exports.
Iran scored a victory when it was exempted from an OPEC deal agreed in November to reduce production by 1.2 million bpd, and traders have expected it to raise output slightly and boost exports to reclaim market share.
Tehran has also been aggressively marketing oil from its offshore storage. It has sold more than 13 million barrels of oil that it had long held on tankers at sea.