Iran’s Resistance Economy Is Kicking In

Farzaneh Sharafbafi, the first-ever female CEO of Iran Air, has just lost her job, a victim of U.S. sanctions on the Islamic Republic. Appointed in July 2017, Sharafbafi’s tenure was dogged by failures beyond her control. Of the 200 aircraft Iran ordered from Boeing, Airbus, and ATR, only 21 were delivered before the U.S. Treasury revoked the relevant licenses as part of the Trump administration’s “maximum pressure” campaign on Iran.

Sharafbafi’s replacement is Touraj Dehghani Zanganeh, a former air force commander and CEO of Meraj Air, a small airline which at one point operated the aircraft used by Iran’s president and foreign minister for diplomatic travel. Zanganeh was placed on the sanctions list by the U.S. last May.

The appointment of an individual sanctioned by the Trump administration is freighted with political symbolism: the Iranian government is signaling that sanctions designations will not influence decisions over the leadership of key industries.

More important, Zanganeh’s appointment exemplifies Iran’s renewed reliance on what its Supreme Leader, Ayatollah Ali Khamenei, has called a “resistance economy.” In order to overcome the restrictions imposed by sanctions, Iran will turn increasingly to a cadre of “resistance managers,” elevating individuals and empowering networks with unique capacities to keep Iran’s trade flowing under duress.

Given its long experience of economic sanctions, Iran has plenty of experienced “resistance managers” like Zanganeh. But their skills will be tested like never before as the U.S. ratchets up its sanctions regime—the latest round targets Iran’s metals sectors—and the economy sinks deeper into recession.

Government officials have vowed to adopt better monetary and fiscal policies in order to protect the public from the recession. But with trade with major partners like Europe and China collapsing, Iran needs to continue buying and selling goods, and earning hard currency, in sufficient quantities to keep the economy turning, even at a slower speed.

In the case of Iran Air, sanctions don’t just end the acquisition of new aircraft, but also significantly restrict the ability to secure spare parts for its existing fleet, to receive ground handling services at airports, and to sell tickets to passengers around the world. Iran Air no longer needs a CEO who represents the renewal of Iran’s aviation industry.

The government is betting that Zanganeh is a manager who can procure—by any means necessary—what the airline requires to keep its planes aloft. It is telling that he was designated by the U.S. Treasury as part of a procurement network. With his military background, Zanganeh also has the authority necessary to cut Iran’s national carrier to size as its commercial prospects darken. The airline has a workforce of over 11,000 and a fleet of just 53 aircraft. Competitor Mahan Air, which has 64 aircraft, has a third of the employees.

Not all companies will change their CEOs, but across Iran’s industrial sectors, many will increasingly outsource their procurement needs to intermediaries and front companies that use both legitimate and illegitimate channels. Such measures can already be seen in the embattled oil sector, reeling from the Trump administration’s recent decision to revoke waivers that allowed Iran to export its crude oil to major customers such as China and India. Speaking on the sidelines of a major oil and gas conference in Tehran, where the presence of foreign exhibitors had fallen from around 600 companies in 2017 to just 60 companies this year, deputy oil minister Hossein Zamaninia told journalists Iran could sustain exports, adding: “We have mobilized all of the country’s resources and are selling oil in the ‘gray market.’”

Analysts expect Iran can sustain exports of around 500,000 thousand barrels per day by leveraging gray-market channels. Zamaninia argued this would not constitute “smuggling,” because Iran doesn’t regard the sanctions “as just or legitimate.” Zamaninia has a point, considering that the U.S. is the only country seeking to enforce a global embargo on Iran’s oil exports.

But definitions aside, it was long expected that Iran would respond to attempts to limit its oil exports by resorting to smuggling, with the Islamic Revolutionary Guard Corps (IRGC) and other quasi-state intermediaries resuming the lucrative roles they had played in the previous sanctions period. Every day, hundreds of motorbikes strapped with jerrycans cross the border between Iran and Pakistan, taking Iran’s cheap gasoline to markets where it can be sold for a hefty profit. Some estimates suggest that 22 million liters of gasoline are smuggled out of Iran daily.

By choking off key exports and limiting access to banking channels, U.S. sanctions seek to limit Iran’s ability to earn and repatriate enough foreign currency to keep its market supplied. But the cash economies of Iraq and Afghanistan, flush with dollars due to the U.S.-led invasions, offer an important lifeline. Reports suggest as much as USD 2-3 million dollars in hard currency are daily being transported from Afghanistan to Iran. A similar trade exists with Iraq.

Central to these methods of “resistance management” is a selectively porous border. Iran needs to allow goods and money to cross into the country away from the scrutiny of the usual trade routes. But at the same time, the state cannot allow uncontrolled export smuggling, instances of which have already exacerbated shortages of basic foods and consumer goods at home. In March, officials from Iran’s agricultural ministry announced that due to a failure to “monitor and control the movement of livestock,” which saw whole herds smuggled to neighboring countries, and which drove the price of meat to historic highs, the responsibility for counter-smuggling activity had been handed over to the IRGC.

Iran needs to keep the economy turning with the bandaid solutions of resistance management, even if it means undoing the hard-fought reforms that had helped make Iran’s economy a little more globalized, more transparent, and less state-controlled over the past few years. As one senior Iranian official told me at a recent meeting: “If we are going to be treated like bandits, we might as well behave like bandits.”

Photo: ISNA

For Iranian Passengers, Old Planes and Few Parts Make Air Travel 5.5 More Times Deadly

In November, Kim Hjelmgaard of USA Today reported on the misery and danger faced by Iran’s air travelers as US sanctions return. Hjelmgaard’s interviewed with former airline pilot Houshang Shahbazi who heroically “saved the lives of more than 100 passengers and crew in 2012 when he successfully landed a 747 commercial airplane with a disabled wheel carriage.” His report also included data on aviation safety in Iran complied by Bourse & Bazaar. A closer look at that data is presented here.

To measure the risks posed to air travelers in Iran, it is possible to look to deaths per passenger journey. This is considered the “most accurate measure” for the mortality risks posed by flying as it accounts for the difference between long and short haul flights, which operate different types of aircraft.

Passenger journeys are tabulated by the International Civil Aviation Organization, and accessible via the World Bank’s data portal. Air accidents and fatalities in Iran are recorded by the Air Safety Network, an industry database. For the purposes of this analysis, we will compare global fatalities with passengers fatalities from accidents involving Iranian-registered commercial aircraft within Iran.

The period examined is 1997 to 2017, a 20 year period which includes the most recent available data. This is also the period which covers the intensification of international sanctions on Iran, beginning with the Iran Libya Sanctions Act signed into law by the Clinton administration in 1997. The International Civil Aviation Organization (ICAO), a United Nations body, has long gathered evidence which suggests that US sanctions contribute to the poor safety record of Iran’s aviation industry. A 2010 ICAO Universal Safety Audit found that “Iranian carriers are unable at present to fulfill most requisite ICAO aviation safety and maintenance standards and recommended practices (SARPs)… because they were denied access to updated aircraft and aircraft spare parts and post-sale services around the world.”

Looking to the data on risk of death, Iran’s 20 year average is 1.89 deaths per 1 million passenger journeys. The same figure for the rest of the world is 0.34 deaths. By this measure, flying in Iran is on average 5.5 times more deadly than flying in the rest of the world, in aggregate. Notably, this does not include 2018 figures, a year where Iran has had 66 fatalities.

When depicted in a chart, the ratios help illustrate the frequency with which Iran experiences serious air accidents. There have been accidents in 18 of the last 20 years, with an average of 2 accidents per year. Accidents do not always lead to fatalities. Fatalities are recorded in 9 of the last 20 years. But deaths can quickly mount when accidents occur at higher than normal levels. In 2009, Iran tragically experienced 7 aviation accidents, resulting in 189 deaths.

Statistically speaking, air travel in Iran is still safe. This is in large part due to the efforts of Iranian pilots and maintenance crews to keep aircraft operable despite limited resources. But even if the overall risk of an accident remains statistically low, the risk still far exceeds expected levels. Over the last 20 years, Iran has witnessed 41 accidents, accounting for 6 percent of the global total. But the country accounts for just 0.6 percent of passenger journeys made worldwide in the same period. By this measure, the frequency of accidents in Iran is 10 times higher than the global norm.

To help put the risk of death in context, one French study found that the rate of fatalities for motorcyclists in France is 1.26 deaths per million journeys. By this jarring measure, a journey on a commercial flight in Iran is more dangerous than a journey on a motorcycle. Iranian passengers put up with these risks because they must—it is the only way to visit family, conduct business, or travel for pleasure. But the situation remains unacceptable.

As Shabazi poignantly told Hjelmgaard, "Everybody knows the risks Iranians face in the air… and everybody's scared."

Photo Credit: IRNA

International Airlines Are Leaving Iran. Here’s Why.

Iranians reacted with anger and frustration to the news that British Airways will suspend its service to Iran from September 23. Soon after, news came that Air France would axe its service on September 18. As reported by the Washington Post, some Iranians expressed a feeling of being “imprisoned in the country” as they learned that international airlines were leaving Iran. Hamid Baeidinejad, Iran’s Ambassador to the United Kingdom, responded to British Airway's withdrawal more pragmatically, noting his hope that “Iran Air, with its three weekly direct flights to London, can seize the opportunity and fill the gap.”

The news appears to reflect further instances of multinational companies withdrawing from Iran in the face of returning U.S. sanctions while bowing to the political pressure exerted by the Trump administration. Israeli Prime Minister Benyamin Netanyahu took this view, stating about the withdrawals, "That's good. More should follow, more will follow, because Iran should not be rewarded for its aggression in the region.”

But the airlines have communicated that commercial and not political factors were paramount in the decision to withdraw. The British Airways statement described their London to Tehran route as "currently not commercially viable.” Air France echoed “poor commercial viability.” KLM has pointed to "negative results and financial outlook.” Some Iranians, observing regularly full flights, have questioned the honesty of these statements.

To better understand whether commercial or political considerations are driving these decisions, Bourse & Bazaar spoke to an executive of one of the international airlines now withdrawing from Iran. The executive asked not to be named given the sensitivity of the issues at hand. 

The executive’s account provides a more precise picture of why numerous airlines have determined that flying to Tehran is no longer commercially viable. These claims are not a fig leaf for politically motivated decisions, nor attempts to downplay legal barriers posed by returning sanctions (which are minimal). Instead, over the last few months, larger economic forces arose that made routes operating at high passenger loads unattractive, at least relative to the option of redeploying aircraft other routes worldwide.

As Amir Noorbaksh has written for Bourse & Bazaar, the influx of international carriers into Iran led to increased competition. Such competition depressed airfares in the short term. Airlines knew that it would be “difficult to become profitable quickly" and had expected to “wait at least two years in order to break even,” the executive explains. But by early 2018, the break-even point remained out of reach.

International carriers had expected that the growth in business and tourist travel to and from Iran would boost demand and help drive airfares upward over time. But the stalling post-sanctions economic recovery, slowed in part by President Trump’s decision to decertify the Iran nuclear deal in October as well as domestic factors, meant that the projected growth in passenger numbers was failing to materialize.

In response, as the first quarter of this year came to a close, most international carriers active in Iran began to plan reductions in their service in order to better match supply with demand. Austrian Airlines pursued a realignment of the airline’s portfolio by suspending flights to Esfahan and Shiraz. KLM planned to suspend its flights and Air France opted to run a reduced service after switching the operation of the Paris-Tehran route to Joon, a subsidiary. British Airways likewise planned to reduce the frequency of its flights. 

These adjustments should have enabled the international airlines to increase airfares in the market by addressing oversupply, bringing profitability back within reach for the sector. But the adjustments coincided with President Trump’s withdrawal from the Iran nuclear deal and an acceleration in Iran’s currency crisis.

The falling value of the rial had two important effects for international airlines. First, it significantly decreased demand. Not only were airfares more expensive as the purchasing power of the rial declined, but Iranians were also struggling to get reliable access to the hard currency they need in order to spend freely when abroad. Majid Nejad, CEO of Alibaba.ir, Iran’s leading online travel website, told the Washington Post that “compared with the same period last year, bookings to foreign destinations from Iran have fallen by half.”

Second, as the rial lost value, the revenues accrued by international airlines in Iran also lost value. In order to mitigate the foreign exchange risk, some international airlines began to market tickets locally only at the highest booking classes (an airline industry price categorization). Those few Iranians with access to foreign banks cards could still purchase tickets at any booking class online, accessing cheaper fares. Nonetheless, the move to increase prices hit demand.

But even if higher fares could protect revenues from devaluation in the short-term, the airlines faced long-standing issues around repatriation of revenues. Last week, the Iranian Civil Aviation Organization announced that international airlines would need to buy euros at the market rate, contradicting an earlier assurance provided by the Central Bank of Iran that foreign currency would be available to the airlines at the lower government exchange rate. The executive notes that a “lack of clear communication from the central bank and aviation authority proved one of the most frustrating aspects of the whole episode.”

In any case, airlines struggled to convert their rial holdings into foreign currency at whatever the rate. The airlines executive believes that when airlines sought to convert their rial holdings in accounts at banks such as Saman Bank and Parsian Bank, the central bank failed to make the foreign currency available because they either “did not have sufficient foreign currency on hand” or “were opting to build up reserves for more critical industries like the pharmaceutical sector.” As rial-denominated revenues languished in Iran, airlines saw their losses mount, and the routes were no longer commercially viable. 

For context, the executive impresses that “business is good in the aviation industry worldwide right now” and that for airline executive committees dealing with the headache of operating in Iran, the option to simply reassign an aircraft and flight crew to another more profitable route became increasingly appealing.

For now, Lufthansa and Alitalia are continuing their services to Iran. For these European holdouts, the withdrawal of their competitors could offer a reprieve, reducing competition and perhaps helping to stabilize airfares. European governments, which have been actively involved in the challenges faced by their national carriers since January, remain politically supportive. Of course, Iran Air will benefit. Iran's national carrier announced route expansions in May in an effort to win back market share from the international players. 

No doubt, sanctions contributed to the withdrawal of international airlines out of Iran, but not for the political or legal reasons readily assumed. Rather, international airlines would have persisted in their service to Iranian destinations, emboldened by political support from European governments, had it not been for the intractable issues surrounding commercial viability.

While the withdrawal from Iran essentially came down to fundamental commercial calculations, the executive makes sure to relay that the decision to cease operating in Iran was nonetheless difficult to make. In his words, nothing was more painful than “how deeply unfair the whole situation is for our team members in Iran.” Like many other young and talented Iranians, those let go by the international carriers will be wondering "what next?"

Photo Credit: Wikicommons

Iran Sanctions Hopes Fly on Possible Delivery of Eight ATR Aircraft

In a recent interview, French Economy Minister Bruno Le Maire expressed optimism for the delivery of eight ATR turboprops to Iran as part of a contract with Iran Air, the country’s national airline.

The encouraging comments come after Le Maire disclosed two weeks ago that the United States had rejected a joint European letter requesting a broad range of waivers and exemptions that had been sent to Secretary of Treasury Steve Mnuchin and Secretary of State Mike Pompeo in June.

In a change of tone, Le Maire spoke of being “hopeful that the United States will provide authorization to deliver these aircraft.” The ATR deliveries, like the three Airbus deliveries made prior to President Trump’s withdrawal from the Iran nuclear deal, are highly symbolic of the hope and expectations for increased trade and investment following the implementation of the Joint Comprehensive Plan of Action (JCPOA).

Le Maire described the intention for ATR to deliver eight aircraft prior to the August 6 sanctions deadline. At least four ATR 72-600 aircraft have been registered to Iran Air. A further four aircraft have been photographed in Iran Air livery, but have not yet had their registrations altered. These eight aircraft can be identified as follows:

• F-WWEP (now EP-ITI)
• F-WWEU (now EP-ITJ)
• F-WWEF (now EP-ITK)
• F-WWEG (now EP-ITL)
• F-WWEC
• F-WWED
• F-WWEE
• F-WWEX

To date, Iran Air has received an initial eight ATR aircraft, having signed a contract in April 2017 for 20 planes. Iran Air is using these planes as part of a new regional service. 

The ATR contract, like so many others, was immediately put in doubt following President Trump's withdrawal from the nuclear deal on May 8 and the announcement that the US would be reimposing secondary sanctions that had been removed as part of the JCPOA. Having already manufactured the aircraft on specification for Iran Air, only to see delivery delayed by financing issues related to sanctions concerns, ATR announced it would seek a new license from the US Treasury to permit the delivery of the aircraft following the US withdrawal form the nuclear deal. 

In July, US Department of Treasury assistant secretary of terrorist financing Marshall Billingslea downplayed the likeliness of any such licenses being granted, telling FlightGlobal, "At this stage, I think we are not in a position to suggest we would be issuing such licenses.” Billingslea cited an inability to “show flexibility on transactions.”

But Le Maire’s comments will give rise to new hope that the US authorities may be adopting a more flexible stance. The French minister disclosed that he has been “negotiating for weeks” with his counterpart, Mnuchin, “fighting so that in the health sector, in the agri-food sector, which are now sanctions exempt, there may be funding channels that remain open."

In the context of this fight, the delivery of the ATR aircraft will prove the most clear indication of US flexibility. There are three reasons US authorities might decide to issue a waiver. First, ATR’s smaller aircraft are used for regional routes. This limits concerns of possible “dual use” of the aircraft for military applications. US authorities have sanctioned Iranian airlines and aircraft for conducting “resupply” flights to the conflict in Syria. Such concerns clouded the Airbus and Boeing contracts for larger commercial aircraft.

Second, unlike Airbus aircraft, ATR turboprops, manufactured under a joint venture between Airbus and Italian aerospace company Leonardo, have limited US parts content. According to ATR executives, US components account for “slightly over 10%” of total parts content, or just above the sanctions threshold. Additionally, the aircraft are already manufactured, meaning that there is no further activities necessary with US entities along the supply chain.

Finally, there is a clear humanitarian justification. As shown by the tragic crash of an Aseman Airlines ATR 72 in February, smaller aircraft are especially vulnerable to accidents caused by aging and poor maintenance. Improving air safety has been a primary consideration for Iranian authorities as they sought to acquire new aircraft following the lifting of sanctions.

A focus on delivering eight turboprops and protecting banking channels for sanctions exempt sectors does not equate to a full-defense of French business interests in Iran. It is clear that Iran contracts of leading French enterprises such as Total, Peugeot, Alstom, and Airbus remain outside the scope of compromise with the US Treasury.

However, even a small victory would be important for Le Maire, as it would push the Trump administration into a mindset of negotiated compromise rather than blanket rejection. The Trump administration is unlikely to announce any softening in their position. So the clearest indicator will be whether the eight ATR aircraft make their long-awaited flights to Tehran. The eyes of a nation will be watching.

Photo Credit: ATR

Iran Air Expands Routes Amid Uncertainty

Despite recent uncertainty surrounding the 2015 nuclear deal, Iran Air has been moving forward with its expansion efforts. The airline's CEO, Farzaneh Sharafbafi, attended last Friday's meeting of the JCPOA Joint Commission. Her presence indicated the significant political efforts being made to facilitate the acquisition of new aircraft which the airline needs to successfully maintain its growth.

Celebrating its 57th anniversary this year, Iran Air began flights from Tehran to Belgrade and Tbilisi on March 10 and is planning to start flights to Budapest, Malmö, and Saint Petersburg later this year. 

With visa restrictions being lifted in Serbia, further optimism points to India. In a joint statement by President Rouhani and Prime Minister Modi in February, Iran and India committed to the opening of e-visa facilities for their citizens. In 2016, neighboring Armenia and Georgia lifted visa requirements for Iranians, leading to the overall flight increases between the two countries and the addition of Tehran-Tbilisi flights to Iran Air’s schedule.

Although Iran Air does not publish passenger statistics and load factors on its routes, its performance can be estimated based on frequency increases on many of its European routes in the last year. Flights to Frankfurt, Gothenburg, Stockholm, and Vienna have all seen the addition of more weekly flights and higher capacities. The Tehran-Belgrade flights, have already sold out through the summer of this year. The airline has also begun codeshare flights on Lufthansa’s Tehran flights, and expanded its codeshare services with Turkish Airlines.

Iran Air's network has grown significantly since 2015, but remains much smaller than that of a decade ago. In 2002, the airline was serving 18 European destinations, compared to 13 destinations today. Iran Air’s Asian flights to Beijing, Bangkok, Kuala Lumpur, Seoul, and Tokyo, have not been in operation for a several years.

By re-establishing these routes, Iran Air could capitalize on a hub and spoke system used by most global airlines. Better geographically positioned in the Middle East than any other Persian Gulf carrier, Tehran could serve as a connecting point for passengers traveling to East Asia and Australia from Europe and North America.

With neighboring Qatar Airways, Emirates, and Etihad Airways experiencing financial difficulties due to political tensions, increased competition, and investments in struggling European airlines, now would be an ideal time for Iran Air to revitalize its own hub and spoke strategy in order to grab market share. 

However, despite the opening of new routes planned for this year, Iran Air faces an uphill battle in sustaining its growth. Because the airline's network remains limited, the success of newly launched routes is initially dependent on Iranian tourists. Economic pressures could see Iranian tourist figures fall. The Iranian departure tax may rise later this year and current proposals show increases from USD 15 to USD 45, which must be paid by all passengers departing Iran.

Furthermore, due to the existing sanctions on financial transactions, Iran Air tickets are not sold on various travel websites. Tickets are sold only through Iran Air offices or travel agents, making it difficult for those booking online from outside of Iran. This hinders growth for connecting passengers and makes competing airlines more attractive, which have already increased their Iran services. In the last two years alone, Iran Air has faced new competition from Air France, Austrian Airlines, British Airways, and KLM, all of which have resumed services or increased the number of seats on Iranian flights. 

Nonetheless, Iran Air has revitalized its domestic flights with the creation of a new regional service using newly acquired ATR aircraft. Iran Air is projecting a significant rise in revenue. At the height of economic pressure in 2013, the company’s revenue was approximately USD 330 million. The airline hopes to earn around USD 1 billion annually once its new fleet has been put into service over the next decade. Plans to begin flights to many intercontinental destinations depend on the arrival of new long-haul aircraft. 

The airline currently has fifteen Boeing 777-300ERs on order, most of which will be used for intercontinental flights. During a press conference in Paris, the airline’s CEO, Farzaneh Sharafbafi, confirmed that upon receipt of the Boeing aircraft, Iran Air would start or resume flights to Adelaide, Bangkok, Kuala Lumpur, and Sydney, further expanding its reach into Asia and Australia. On these planned routes, Iran Air faces little to no competition from Asian carriers. 

Sharafbafi reassured all that Boeing would remain committed to its landmark contract. She also said that there are no problems in financing the orders and that Boeing and Airbus jets would be delivered in late 2018 and 2019 respectively.

But while the licenses issued by the U.S. government allowing for the sale of Airbus, Boeing, or ATR aircraft remain valid, the Trump administration continues to threaten to pull out of the Iran nuclear deal. Ultimately, the growth of Iran Air significantly depends on American adherence to the deal and the delivery of the new aircraft. It remains to be seen whether Sharafbafi will have the opportunity to pursue Iran Air's ambitious reintegration in the global airline industry.

Photo Credit: Alireza Izadi

“Davos of Iran” to Convene as Post-Sanctions Trade and Investment Reaches Critical Juncture

European business leaders and policymakers will convene with their Iranian counterparts at a critical time, setting an agenda for trade and investment as the Trump administration signals its skepticism regarding the Iran nuclear deal.                                                                                 

The fourth edition of the Europe-Iran Forum, which has been called the “Davos of Iran,” returns to the historic Dolder Grand Hotel in Zurich on October 3-4, 2017. The summit is set to be the most significant gathering of Iranian and European business leaders and policymakers to date, demonstrating a clear commitment to the economic dividends of the nuclear deal.

“Multinational companies have now spent two years studying the feasibility of new investments in Iran, and pressure is increasing for long-expected deals to reach the contract stage. Encouragingly, with a number of major agreements signed in the last few months, it seems the commitment to the Iranian market remains strong,” said Esfandyar Batmanghelidj, founder of the Europe-Iran Forum.

“The aim now is for European leaders to work with Iranian partners to find a sustainable agenda for trade and investment with a view to the long term.”

Helga Schmid, Secretary General of the European External Action Service (EEAS) and a key figure in the negotiation of the Joint Comprehensive Plan of Action (JCPOA) will give a keynote speech outlining the European commitment to the nuclear deal and the provision of sanctions relief to Iran in exchange for its verified compliance. This is the first time that the Secretary General, one of Europe’s top diplomats, will address an audience of business leaders on these matters.

The European push for “business diplomacy” will be bolstered by the participation of an unprecedented multilateral gathering of senior diplomats, including the Belgian, British, Danish, Dutch, and Polish ambassadors to Iran.

There will also be strong representation from the Rouhani administration, which is determined to push forward its agenda of economic engagement following a resounding election victory in May and the President’s inauguration on August 5.

Mohammad Khazaee, the Deputy Minister for Economic Affairs and Finance and President of the Organization for Investment, Economic, and Technical Assistance of Iran (OIETAI), will outline the administration’s agenda for monetary policy and regulatory reform. Iran is seeking to make more progress on banking challenges, particularly by improving its compliance with the recommendations of the Financial Action Task Force (FATF), an intergovernmental body that establishes regulatory standards for international finance.

Deputy Minister of Industry, Mine, and Trade Mehdi Karbasian, and Deputy Minister of Foreign Affairs Seyyed Kazem Sajjadpour, will also speak at the 4th Europe-Iran Forum.

Senior business leaders from Iran speaking at the conference include Farzaneh Sharafbafi, the newly appointed CEO of Iran Air and the first woman to lead Iran’s national airline. This will be Dr. Sharafbafi’s first major international address in her new role. Iran Air’s pending deals with Airbus and Boeing, valued at USD $10 billion and USD $17 billion respectively, count among Iran’s most important post-sanctions contracts.

Dr. Mohammad Saeedi, Chairman and Managing Director of the Islamic Republic of Iran Shipping Lines (IRISL), will outline how Iran seeks to modernize its merchant fleet and port infrastructure to keep up with rising trade flows. Iran’s non-oil trade hit nearly USD $30 billion in the four months since the beginning of the Iranian calendar year (March 2017). 

Masoud Khansari, President of the Tehran Chamber of Commerce, Industries, Mines, and Agriculture, will detail the ways in which Iran’s private sector has been empowered to drive economic growth across sectors, including those traditionally dominated by state enterprise.

A wide range of panels will discuss how Iran is succeeding in attracting foreign investment through new partnership models. Of particular importance will be a panel on transportation and logistics, with senior representatives from Alstom, Siemens, and Port of Antwerp discussing the holistic regeneration of Iran’s transport infrastructure and the concrete achievements of their companies in the market, in addition to ongoing efforts to mitigate risk and ensure adherence with global compliance standards.

Moreover, several of Iran’s key private equity and venture capital executives will explore how foreign capital has begun to enter Iran, supporting growth within the vibrant private sector.

Omid Gholamifar, CEO of Serkland Invest, a Swedish investment company focused on Iran, and a participant on the private equity panel, notes, “Over the last two years, foreign investors have deployed venture capital in Iran, supporting young digital businesses. Those investments have done well, spurring entrepreneurship and bringing new services to the market. Now investors are beginning to look at more mature companies and these growth capital investments could turbocharge Iran's private sector." 

The Forum will also mark the release of a new study measuring business confidence in Iran, commissioned in partnership with noted research firm IranPoll. The first-of-its-kind survey examines attitudes among Iranians towards domestic and multinational businesses, as well as the extent to which Iranians believe that business leaders will deliver on important commitments such as job creation, environmental protection, and innovation.

The 4th Europe-Iran Forum is organized by Bourse & Bazaar in partnership with Adam Smith Conferences. It is supported by KPMG, Dentons, and Manoir Industries among other world-class sponsors.

Photo Credit: Europe-Iran Forum