Can Iranian Economic Diversity Be 'Programmed'?

Published March 7th, 2000 - 02:00 GMT

Economic experts emphasize that the time has come for Iran to diversify its heavily oil dependent export base.  


In fact, some experts deem Iran's over-reliance on petrodollars to be "the road to economic disaster."  


One possible solution according to many: Software development. 


In an interview with MENAS Associates Limited, Ahmad Kiarostami, Managing Director of, one of Iran's leading software companies, provided insights into Iran's potential for strengthening its software development capabilities. The Managing Director suggests that a relatively large software market exists particularly with Iranians abroad (i.e. an estimated 1 million Iranians reside in Los Angeles alone). Software developers have focused on producing software such as Iranian Football CDs, to provide Iranians abroad with some nostalgia. 


But Kiarostami argues that if Iran is to become a software success-story like India, the Iranian government must extend greater support to local software companies. Another shortcoming in the Iranian software sector, Kiarostami conveyed, is that, "[Iranians] have not learned teamwork in their academic studies. As long as the project framework is based on an individual, we can do it extremely well. But when it comes to teamwork, it requires another set of skills, which we lack." Mr. Kiarostami also pointed to a deficiency of effective managers in the nation. He added that the unstable environment detracts from foreign willingness to make long-term investments. For example, Iranian governmental policy related to the Internet frequently changes, with imposed restrictions continually surfacing and changing. The software market is highly dependent on effective Internet access, but Iran currently lacks good ISP services. Things do, however, appear to be changing for the better, with more and more quality ISPs entering the market. Also, increasing foreign investment is evident in this field. 


Although capable of manufacturing high-quality software at low prices, a fundamental problem faces software developers in Islamic republic. Many Iranian firms cannot effectively market their software products, and the aid of foreign firms is thought to be priceless in this regard. 


Because no copyright exists in Iran, software engineers have multi-thousand dollar software packages at their disposal at very low prices - a definite advantage, Kiarostami said. Indigenous programmers are able to gain a broad range of software experience and expertise. On the down side, the lack of adequate copyright regulations, deters many foreign companies from investments in Iranian software. However, contracts between two partners are generally the rule in Iran, and help fill the copyright void.  


While Iran boasts highly-skilled programmers at relatively low labor costs, several human resource problems baffle the industry. Emigration to Canada in recent years for computer programmers has become progressively easier, resulting in a loss of local talent. Typical programmer wages (between Rls 1-4.5 million per month) in Iran cannot rival the attractive wages offered abroad. Further, foreign companies wanting to develop software packages in Iran face great difficulties, and are typically limited to contracting existing companies.  


While it may take some time for Iran to enjoy a special place in the global software development market - a place comparable to that enjoyed by India, hopeful signs exist. The Government is becoming increasingly aware of the need to diversify its economy, and of the growing potential of software development. 

© 2000 Al Bawaba (

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