World Business and Economic Analysis
World Business and Economic Analysis
Iran’s Untapped Potential: The Investment Opportunity the World Ignores
by : Hassan Hosseini
Phd in Finance
While headlines focus on Iran’s geopolitical tensions, a quieter story is unfolding: the country holds some of the most compelling—and overlooked—investment opportunities in emerging markets. With vast natural resources, a young and educated population, and a strategic location bridging Europe and Asia, Iran could become a linchpin for regional economic growth. But realizing this potential requires a pragmatic shift in how the world engages with Tehran.
Why Iran Stands Out
Iran isn’t just another sanctions-bound economy. It’s the 23rd-largest by purchasing power parity, with a diversified industrial base that outpaces many peers in the Middle East. Consider:
Unlike Vietnam or India—darlings of foreign investment—Iran hasn’t yet benefited from globalization. But its domestic market is larger than Turkey’s, and its stock exchange (the region’s biggest) trades at a fraction of the valuation of regional peers.
The Risks—and How to Mitigate Them
Yes, sanctions and political instability loom large. Yet these very constraints have forced Iran to build a self-sufficient industrial ecosystem, from pharmaceuticals to automotive manufacturing. For investors willing to navigate complexity, early entry could yield outsized rewards, as seen in post-sanctions Myanmar or post-1991 India.
Critics argue that corruption and bureaucracy remain hurdles. But reforms are underway: Iran now ranks 133rd in the World Bank’s Ease of Doing Business index—ahead of Brazil and India in some subcategories like contract enforcement. Special economic zones offer tax holidays and streamlined permits, mirroring China’s 1980s playbook.
A Test for U.S. Policy
The Trump administration faces a choice: double down on isolation or explore calibrated economic engagement. The latter could follow the model of Nixon’s China opening—using trade to incentivize moderation. Even limited sanctions relief for non-oil sectors (e.g., agriculture, tech) could catalyze growth while maintaining leverage.
The alternative? Ceding Iran’s market to rivals. China’s $400 billion investment deal with Tehran and Russia’s expanding trade ties show the cost of inaction. Meanwhile, regional neighbors like the UAE are already re-exporting Western goods to Iran, profiting from arbitrage.
The Path Forward
The world needs fewer conflict zones and more stable partners. Iran won’t transform overnight, but its economic potential is too significant to ignore. For investors, the calculus is shifting from “Is it safe?” to “Can we afford to wait?” And for policymakers, the question is whether to keep betting on pressure—or try something new.
Iran’s newly elected president, Masoud Pezeshkian, has received warm congratulatory messages from across the world, including the leaders of neighboring countries and prominent international organizations.
They have called for strengthening relations and cooperation with the Islamic Republic on global and regional issues.
Putin praises “constructive” ties
Russian leader Vladimir Putin congratulated Pezeshkian on his victory in the presidential runoff and attached significance to the improvement of ties with Iran.
"I hope that your activity as president will facilitate the further boosting of constructive bilateral cooperation on all tracks to benefit our friendly peoples, in the interests of easing regional security and stability," he said in a statement published on the Kremlin website.
The Russian president said Moscow and Tehran "efficiently coordinate efforts in resolving the pressing issues of the international agenda".
Addressing Pezeshkian, he said in the statement, "I wish you success, good health and prosperity."
Both Iran and Russia have been targeted by stiff Western sanctions.
Xi commends strategic mutual trust
The Chinese president issued a similar message.
"I attach great importance to the development of China-Iran relations and am willing to work with the President to lead the China-Iran comprehensive strategic partnership towards deeper advancement," state news agency Xinhua cited Xi Jinping as saying.
Xi added that Iran and China "have a long history of friendly exchanges, and bilateral relations have maintained healthy and stable development... for over half a century."
He also highlighted strategic partnership between Tehran and Beijing.
"Faced with complex regional and international situations, China and Iran have always supported each other, worked together and continued to consolidate strategic mutual trust. This has not only brought benefits to our two countries' peoples, but has also made active contributions to promoting regional and world peace and stability," the Chinese president said.
KSA demands stronger ties
Saudi Crown Prince Mohammed bin Salman called for promoting ties with Iran as he congratulated Pezeshkian after winning the presidential election run-off.
“I affirm my keenness on developing and deepening the relations between our countries and people and serve our mutual interests,” Saudi Arabia’s state news agency, SPA, quoted bin Salman as saying.
Last year, a China-brokered deal saw Riyadh and Tehran re-establish diplomatic relations after years of tensions. The two Persian Gulf countries have since increased regular contact in an effort to bolster ties.
Iraq seeks closer ties
The Iraqi president wished Pezeshkian success in his duties and in “fulfilling the ambitions and aspirations or the Iranian people”.
“We affirm our keenness to strengthen relations between Iraq and Iran in a way that serves the interests of the two neighboring countries and peoples,” Abdul Latif Jamal Rashid said in a message to Iran’s president-elect.
Senior Iraqi Shia leader Ammar al-Hakim, a former leader of the Islamic Supreme Council of Iraq and current head of the National Wisdom Movement, also sent congratulations and expressed hope that Pezeshkian can help resolve regional differences.
Other Persian Gulf Arab leaders, including Emir Sheikh Tamim bin Hamad Al Thani of Qatar, Sultan Haitham bin Tariq Al Said of Oman and Sheikh Mishal al-Ahmad al-Jaber al-Sabah of Kuwait also extended their congratulations to the Iranian president-elect.
Pakistan pushes for closer relations
The Pakistani prime minister called for efforts to “ensure a bright future” for the two neighbors.
“Heartiest congratulations to my brother Dr. Massoud Pezeshkian on his victory in Iran's presidential elections! I look forward to working closely with President-elect Dr. Pezeshkian to further strengthen Pakistan-Iran bilateral ties & promote regional peace & stability. As neighboring countries, Pakistan & Iran enjoy a close & historic relationship.
We must ensure a bright future for our two peoples through mutually beneficial cooperation’” Shehbaz Sharif wrote in a post on X, formerly known as Twitter.
The Pakistani president also hoped that Tehran-Islamabad relations will grow under the Pezeshkian presidency.
“Pakistan looks forward to working together with Iran for the peace and prosperity of the region,” Asif Ali Zardari said.
India hails long-standing relationship
The prime minister of India also extended his congratulations to the newly elected Iranian president.
“Congratulations @drpezeshkian on your election as the President of the Islamic Republic of Iran. Looking forward to working closely with you to further strengthen our warm and long-standing bilateral relationship for the benefit of our peoples and the region,” Narendra Modi said in a post on X.
South Korea wishes Iran prosperity
In East Asia, South Korea expressed hope for improving relations between Tehran and Seoul.
“We wish Iran a path of prosperity and development under the new government, contributing constructively to regional stability. We look forward to further enhancing our friendly relations with Iran,” South Korea’s Foreign Ministry said in a statement.
Malaysia urges fruitful collaboration
The Malaysian prime minister said in a message to Pezeshkian that the outcome of Iran’s election reflects the vibrant spirit of Iranian democracy and heralds a promising future for the country.
Datuk Seri Anwar Ibrahim said with its rich and ancient civilization, Iran occupies a unique and prominent place in world history, and the potential for Malaysia-Iran relations is immense and filled with promise.
“We look forward to strengthening our bilateral mechanisms to deepen and broaden cooperation between the two countries. We are committed to collaborating on international platforms such as the Organization of Islamic Cooperation (OIC), the Non-Aligned Movement (NAM) and the Developing-8 (D8),” the Malaysian leader said.
“I look forward to welcoming Pezeshkian to Malaysia at the earliest opportunity,” he said.
Syrian president hails strategic relationship
In Syria, President Bashar al-Assad expressed hope in a message to Pezeshkian that Tehran and Damascus will cement their “strategic” ties.
“We will work with you to boost the Syrian-Iranian strategic relationship and open new promising horizons for bilateral cooperation as resistance will remain the common approach that we follow in order to preserve the pride of our countries and defend the interests of their peoples,” al-Assad said.
The Syrian president added in his message, “Your country, which is impregnable as it has always been, is one of the most important countries with which we are keen to ensure that the relationship is at its peak because this relationship is based on roots established through decades of mutual respect, common understanding and firm principles to which Syria and Iran have always adhered.”
Aliyev invites Pezeshkian to visit Azerbaijan
Azerbaijan’s president extended an invitation to Pezeshkian to visit his country.
“I heartily congratulate you on your election as the President of the Islamic Republic of Iran. I invite you to pay a visit to Azerbaijan to exchange views on the prospects for development of our bilateral cooperation,” Ilham Aliyev said in a letter to the Iranian newly elected president.
He also threw a spotlight on friendly ties between Iran and Azerbaijan.
“We attach great importance to the relations between the Republic of Azerbaijan and the Islamic Republic of Iran built on solid foundations such as common religious and cultural roots, friendship and brotherhood. Today, the agreements reached on the future development areas of Azerbaijan-Iran relations based on mutual respect and good neighborliness and the implemented joint projects serve the well-being of our countries, the sustainable development and security of the region as a whole,” he said.
Armenia PM hails warm, friendly ties
The Armenian premier also called for deepening bilateral relations in a congratulatory message to Pezeshkian.
"Relations with the brother country of the Islamic Republic of Iran are of special importance for the government and people of the Republic of Armenia, which has been continuously developing since the declaration of independence of Armenia," Nikol Pashinyan said.
"Continuous deepening of warm relations between Armenia and Iran in the field of bilateral cooperation and stability and prosperity of the region is of particular importance," he added.
"I am confident that with the joint efforts of our governments, the agreements reached between the Republic of Armenia and the Islamic Republic of Iran will be implemented and we will jointly implement a number of new programs for the welfare of the friendly people of Armenia and Iran," Armenia’s prime minister concluded.
Venezuela calls for confronting hegemony
Venezuela hailed Iran for its “commitment demonstrated to democracy” during the two rounds of elections.
“Venezuela expresses its conviction that the decision made by the Iranian people will contribute to the prosperity of this nation, as well as its consolidation as an emerging power in the nascent multipolar world,” Venezuela’s foreign minister said.
Yvan Gil said Pezeshkian will have the “absolute support” of Venezuelan President Nicolas Maduro and his government with the aim of expanding relations and continuing to defeat “the hegemonic pretensions that threaten multilateralism and world peace”.
Iran and Venezuela signed a 20-year strategic cooperation plan in 2022 in Tehran.
Both countries have been under US sanctions.
Lukashenko urges strategic partnership
Belarusian President Alexander Lukashenko said in a congratulatory message to Pezeshkian that he is convinced the two countries will promote ties.
“The dialogue between Minsk and Tehran at all levels is steadily expanding. I am convinced that in the near future we will be able to implement all the agreements reached, including those on raising the level of the Belarusian-Iranian relations to a strategic partnership,” Lukashenko said.
Serbia sends message of hope
The Serbian President also congratulated Iran’s president-elect.
“Sincere congratulations to Iranian President
@drpezeshkian. Your victory reflects citizens' trust in your vision for the future, dedication to peace, and desire for your country's progress. I am confident that your leadership will bring prosperity and well-being to your people,” Aleksandar Vucic said in a post on X.
SCO “committed to working with Iran”
The Shanghai Cooperation Organization (SCO) is among international organization that congratulated Pezeshkian on his election as Iran’s president.
“The Shanghai Cooperation Organization is committed to working with Iran to jointly achieve sustainable development as the main guarantor of global stability, ensuring regional security and a mechanism for equality,” Zhang Ming, the organization’s secretary general, said in his congratulatory message.
The Shanghai Cooperation Organization, an intergovernmental entity formed in 1996 by the leaders of China, Russia, Kazakhstan, Kyrgyzstan, and Tajikistan, aims to foster multilateral security, economic, and political cooperation.
Central Bank of Iran Governor Ali Salehabadi said on Saturday that the economy of the Islamic Republic of Iran has seen growth in Q2 2021 despite the coronavirus pandemic and this indicated that the country has emerged from recession.
In a virtual meeting attended by International Monetary Fund Chairwoman Kristalina Georgieva, as well as central banks governors and chairs of financial institutions of the MENAP region, held on Saturday, Salehabadi said that just like many other countries, Iran was severely hurt by the coronavirus pandemic, but its economy is now on a strong path of improvement.
The latest statistics show a 6.2 percent growth in Iran GDP in Q2 2021 which is a great achievement despite tight restrictions on Iran's access to its funds abroad, CBI Governor added.
Iran’s non-oil economy grew by 4.7 percent in the same period, according to Salehabadi, indicating that Iran's economy has significantly climbed out of recession and moved towards improvement.
Salehabadi also said that unemployment retreated to 8.8 percent in Iran in Q2 2021 thanks to CBI and the administration’s supportive financial and monetary policies.
The official criticized the inequality in economic recovery among world regions and also in countries' access to the coronavirus vaccine resulting in different economic recovery processes.
No country is safe unless all the countries are protected against the virus, Salehabadi said, noting that any delay in vaccination in countries would pose a threat to the global economic perspective.
SDR allocation process in 2021 cannot help IMF member states meet their long-term COVID-19 vaccine demands, he underlined.
CBI Governor expressed support to the IMF’s new initiative to help members address climate change challenges, adding that the burden of climate change has been put on the countries with the minimum share in carbon emission.
He proposed that neighboring countries make multilateral funding and rich countries share their technological knowledge to better address climate change.
