Foreign direct investment in Iran (FDI) has been hindered by unfavorable or complex operating requirements and by international sanctions, although in the early 2000s the Iranian government liberalized investment regulations. Iran ranks 62nd in the World Economic Forum's 2011 analysis of the global competitiveness of 142 countries. In 2010, Iran ranked sixth globally in attracting foreign investments.
Foreign investors have concentrated their activity in a few sectors of the economy: the oil and gas industries, vehicle manufacture, copper mining, petrochemicals, foods, and pharmaceuticals. Iran absorbed US24.3billionofforeigninvestmentfrom1993to2007andUS34.6 billion for 485 projects from 1992 to 2009.
Opening Iran's market place to foreign investment could also be a boon to competitive multinational firms operating in a variety of manufacturing and service sectors, worth 600billionto800 billion in new investment opportunities over the next decade.
Foreign trade in Iran and Foreign trade relations of Iran by country
Firms from over 50 countries have invested in Iran in the past 16 years (1992–2008), with Asia and Europe receiving the largest share, as follows:
Sectors of the Iranian economy
As of 2007, Asian entrepreneurs made the largest investments in the Islamic state by investing in 40 out of 80 projects funded by foreigners. The largest amount of foreign investment was in the industrial sector, including food and beverage, tobacco, textiles, clothing, leather, chemical, steel and oil derivates. The figure exceeded US8.76billion.Water,electricityandgassectorrankedsecond,attracting874.83 million. In the third place, the real estate sector absorbed more than 406million.Investmentsinservice,telecommunication,transportationandminesreached193 million, 14.3millionand14.2 million respectively. Asian countries invested 7.666billioninvariousprojectsfollowedbyseveralmultinationalconsortia.Investmentsbythesemultinationalcompaniesexceeded1.39 billion (in four projects).
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Iran is a mixed economy with a large public sector. It is the world's 21st largest by purchasing power parity (PPP). Some 60% of Iran's economy is centrally planned. It is dominated by oil and gas production, although over 40 industries are directly involved in the Tehran Stock Exchange. The stock exchange has been one of the best performing exchanges in the world over the past decade. With 10% of the world's proven oil reserves and 15% of its gas reserves, Iran is considered an "energy superpower".
Iran's telecommunications industry is almost entirely state-owned, dominated by the Telecommunication Company of Iran (TCI). Fixed-line penetration in 2004 was relatively well-developed by regional standards, standing at 22 lines per 100 people, higher than Egypt with 14 and Saudi Arabia with 15, although behind the UAE with 27. Iran had more than 1 mobile phone per inhabitant by 2012. Iran has a population of 80 million with some 56% of Iranians under the age of 25.
The politics of Iran takes place in the framework of an Islamic theocracy which was formed following the overthrow of Iran's millennia-long monarchy by the 1979 Iranian Islamic Revolution. Iran's system of government (nezam) has been described (by Juan José Linz in 2000) as combining "the ideological bent of totalitarianism with the limited pluralism of authoritarianism." It "holds regular elections in which candidates who advocate different policies and incumbents are frequently defeated", but scored lower than Saudi Arabia in the 2021 Democracy Index (combined by the Economist Intelligence Unit).