Average Outlook

Published October 18th, 2000 - 02:00 GMT

The lens of the international media remains focused on Iran's power struggle between conservative and reformist elements. At the same time, President Khatami is striving to revitalize his country's lagging economy. While the President's rhetoric outlines the need for political reform, the Islamic Republic also desperately requires market reforms, including gradual privatization of loss-making state industry and streamlining trade and investment laws. Without the execution of meaningful steps, Iran's development goals will remain an illusion. 


Multinational firms should observe with great detail how events unfold in Iran, as signs of amelioration in the political and business arenas abound. If reforms proceed, Iran, with a population of more than 63 million and GDP of over $60 billion, could represent an extremely lucrative market. Nevertheless, even with a more moderate Majlis and the expected re-election of Khatemi next year, progress will continue to be impeded by the influence of conservative factions, which still control the important military apparatus and judicial system. Once the political gamesmanship subsides, the relative power of reformist elements will determine the degree to which Iran opens itself to the global economy. 

© 2000 Mena Report (www.menareport.com)

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