FINEX 2017 Underscores Iranian Economic, Investment Rebound

EghtesadOnline: Foreign Minister Mohammad Javad Zarif heralded better days for Iran's economy as a result of the opportunities emerging on the back of the Joint Comprehensive Plan of Action—the formal name of Iran's nuclear deal with world powers.

News ID: ۷۴۰۹۶۹

16 April 2017

Zarif was speaking at the 10th International Exhibition of Exchange, Bank and Insurance–aka FINEX 2017–held in Tehran on Saturday. It runs until April 18.

"The path for the participation of our companies in global production chain, which is the best way of providing jobs for young workforces, has been smoothened," he said.

The opening ceremony was attended by high-ranking Iranian officials, namely Minister of Economy Ali Tayyebnia, Iran's Vice President for Science and Technology Sorena Sattari, President of the Central Insurance of Iran Abdolnasser Hemmati, Central Bank of Iran Governor Valiollah Seif and the head of Iran's Securities and Exchange Organization, Shapour Mohammadi, according to Financial Tribune.

Iran's top diplomat noted that foreign investment witnessed a whopping surge of 1,300% to surpass 12.5 trillion rials ($335 million) during the four years of President Hassan Rouhani's tenure.

"If this trend of foreign investments continues, foreign companies and investors will start to come around and trust the safety of our country and its market more and more. As a result, our companies can use that opportunity and start their activities in international markets," he added.

Zarif said the "unjust" international sanctions on the Iranian economy targeted three key economic sectors, namely oil, transportation and banking.

He pointed to the sensitivity of the banking system's sanctions, as they increased the cost of international trade by impairing the banking system and raised the risk of doing business with Iran by disheartening foreign investors.

Scaling Back Restrictions

Zarif elaborated on the fruits of JCPOA for the banking system, namely the reconnection of Iranian banks to SWIFT (the international interbank messaging network), the temporary removal from the FATF black list, resumption of correspondent relations with foreign banks and the unfreezing of CBI's foreign assets while forming new ties with other countries' central banks, especially those of the European Union.

In 2012, SWIFT cut off Iranian banks subjected to EU sanctions over Iran’s nuclear energy program, which shut down a major avenue of doing business with the rest of the world.

The intergovernmental Financial Action Task Force, which is the global standard-setting body for anti-money laundering and combating the financing of terrorism (AML/CFT), issued a public statement on February 24 in which it welcomed Iran's adoption of high-level political commitment to address its AML/CFT deficiencies and its decision to seek technical assistance in the plan's implementation.

This led to the suspension of countermeasures for 12 months to monitor Iran's progress in implementing the action plan, but if FATF determines that Iran has not demonstrated sufficient progress in implementing the action plan at the end of that period, FATF’s call for counter-measures will be reimposed.

The minister of economy also delivered a speech at the ceremony, noting that the economic growth rate stood at -6.8% when President Hassan Rouhani took office four years ago but now with the support of Iranian people and all sectors of the economy, the government managed to accelerate the growth rate to reach 8% by the end of last year (ended March 20, 2017).

"If the drop in oil price had not slowed the pace of economic growth in 2014, the economy would have experienced better days and our people could have felt the effects of these efforts much more," Tayyebnia said.

"The alarming 40% inflation rate was brought down to a single digit and 90% of fluctuations in exchange market were controlled, which restored stability and calm to our economy."