Iran's reformist parliament on Wednesday passed legislation that would for the first time authorize and protect direct foreign investments in Iran.
The bill marks a success for the reform movement of President Mohammad Khatami, who has been under fire for his inability to revive the sluggish economy.
Deputies overwhelmingly supported the measure, which would effectively repeal legislation dating back some 50 years that prevents foreigners from holding more than 49 percent of companies in Iran.
It would also guarantee against the seizure of foreign capital and the nationalization of companies in Iran -- a major fear of investors after the state took control of all foreign firms after the 1979 Islamic revolution.
The bill still faces debate in the chamber to modify certain details in the legislation, but its approval marks a key step forward for the reformist goal of instituting economic reform in Iran.
Deputy Economy Minister Mehdi Navab, defending the bill before parliament, urged its adoption to help speed Iran's economic recovery and create new jobs as hoped under Khatami's latest five-year budget.
"Foreign investment will allow us to fully enter the field of international commerce," he said.
"Iran needs 20 billion dollars to finance the creation of some 800,000 jobs every year," reformist MP Ismail Jabarzadeh told the parliament, citing the figure outlined in Khatami's latest five-year economic plan.
"While other nations such as China rush to get foreign capital, Iran until now has only been able to attract 750 million dollars in direct foreign investment," he said.
Jabarzadeh also stressed that it was crucial for the government and other key state institutions to "protect foreign capital."
Several MPs in the conservative minority argued forcefully against the bill, citing articles in the Iranian constitution adopted after the revolution which expressly prohibit any foreign control over the economy or Iran's national resources.
They expressed fear that the measure could precipitate a financial crisis like that which rocked Asia in recent years, when the sudden flight of foreign capital played a key role in sparking a regional market collapse.
Khatami has come under heavy criticism for his handling of the economy, particularly from conservatives as he readies to run for re-election next year.
The economy remains wracked by high unemployment and inflation, while he came to office in 1997 pledging to revive the nation's stumbling economy, much of it lumbering under state control.
Wednesday's approval comes a day after parliament held a closed-door session with top cabinet ministers to look at ways of easing the barriers to foreign investment.
Economy Minister Hossein Namazi, Intelligence Minister Ali Yunessi and central bank chief Mohsen Nourbakhsh were among the participants at the session, sources said.
Only Iran's lucrative energy sector -- in which foreign firms have a full presence under so-called buy-back schemes -- has allowed full international investment to date. – (AFP)
© Agence France Presse 2000
© 2000 Mena Report (www.menareport.com)
