Iran's Political Tension Holding back Investment

Published July 2nd, 2000 - 02:00 GMT

The prevailing political tension in Iran must ease up because it is acting as a brake on private sector investment and contributing to capital flight, Iranian Industry Minister, Gholamreza Shafei, said, quoted by Iran News Agency (IRNA). 

"The government should encourage investment and reduce tension, because it is a brake," Shafei told a meeting of provincial leaders in Yazd, central Iran. 

"If political tension does not abate, there will be a flight of capital to more secure places in the world, so the government ought to encourage investment in the private sector," he said. 

For the past several months, Iran has been suffering from political tension between reformers, allied to President Mohamad Khatami, who recently swept the field in legislative elections, and conservatives, said AFP. 

The government is currently studying a tax exemption of four to 12 years on investments and may also give private investors access to up to 33.5 percent of bank loans made available to the industrial sector, AFP added. 

It also recently announced plans for the eventual creation of funds in both foreign currency and rials (Iran's currency) that would make loans for certain projects. 

Private sector investment rose 12 percent in 1999 after dropping significantly over the previous three years, the agency said. 

The 2000-2005 national economic plan will include the privatization of certain sectors of the economy, notably telecommunications - (Several Sources) 

© 2000 Al Bawaba (www.albawaba.com)

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