Page 21 - bne IntelliNews Country Report: Iran Dec17

Iran, Afghanistan sign trade memo to push bilateral trade
Iran and Afghanistan signed a memorandum of understanding in Washington DC on October 15 on expanding bilateral trade, according to Tasnim News Agency. The Iranians are actively looking to conduct trade with large cities in Afghanistan including the capital Kabul, which is seen as a growing market for Iranian-produced consignments given its booming population of more than 6mn people. To that end, they are attempting to accelerate the development of trade routes into the country, but this objective has been hindered by delays given the slow development of Chabahar Port on the Gulf of Oman , which, once sufficiently progressed, would boost the routes with big volumes of Indian exports headed to Afghanistan via Iran.
The trade memorandum was signed on the sidelines of a global gathering of banking executives at a meeting of the International Monetary Fund (IMF) and World Bank Group (WB). Iranian Minister of Economic Affairs and Finance Massoud Karbasian and Afghanistan’s Finance Minister Eklil Ahmad Hakimi inked it.
Afghan government representatives also signed an initial agreement with Iran on the purchase of oil products, cement, and steel for their country's surging construction industry.
5.3 FDI
Iran FDI 2010 2011 2012 2013 2014 2015 2016
FDI net inflows (BoP) (USD bn)
3.649 4.277 4.662 3.05 2.105 2.05 3.37
FDI net inflows (% of GDP)
0.78 0.722 0.794 0.596 0.495 0.521 /
FDI net outflows (% of GDP)
0.036 0.038 0.027 0.033 0.021 0.035 /
source: World Bank
Iran attracted $3.37bn in FDI in 2016
The United Nations Conference on Trade and Development (UNCTAD) already has Iran ranked as among the successful countries in attracting foreign investment. Its 2017 World Investment Report says that in 2016 Iran attracted $3.37bn worth of foreign investment, a 63% improvement y/y. The FDI boost, very much a consequence of Iran's public and private sectors enjoying their first mostly sanctions-free full year since the nuclear deal took effect, was widely felt although some sectors were slow to rebound due to issues dogging the area of financial transactions.
How the Iranians would love to drive that figure up to dizzying heights – and their ambitions are not small with, for instance, $200mn being sought to develop the country’s oil, gas and petrochemical industries over the next five years – but there is a lot of anxiety that Trump, rather than attempting to deal the nuclear agreement one devastating blow, is trying to incrementally throttle it. The fear is that the strategy might be to steadily keep hindering investment by gradually piling on more and more sanctions to the point where the Iranians will no longer be persuaded that their adherence to the Joint Comprehensive Plan of Action (JCPOA), or the nuclear deal, is worthwhile.
Vincent Eiffling, a researcher on Iran at the Belgium-based Centre d’Etudes des Crises et des Conflits Internationaux, described such a scenario to
21 IRAN Country Report November 2017 www.intellinews.com