Hassan Rouhani, the first Iranian leader in a decade to visit Davos for the World Economic Forum, invited oil companies to invest in his country as a nuclear accord with world powers triggers the lifting of some sanctions.
Rouhani told a meeting of about 30 executives, mostly from the oil industry, that Iran has a good investment environment now and that risk is low, said Lin Boqiang, director of China Center for Energy Economics Research, who attended the meeting today.
Iran, holder of the world’s fourth-largest proven oil reserves, saw its economy shrink more than 5% in the fiscal year through March under the weight of international sanctions. Some of those trade restrictions and capital controls, imposed over the nation’s nuclear research, are being suspended after a Nov. 24 interim deal to freeze parts of the atomic program. Iranian oil exporters, financial institutions and companies linked to its nuclear work are still sanctioned.
Rouhani’s trip to Davos comes as global companies express interest in the economic opportunities on offer if Iran’s ties with the world community continue to improve.
Renault SA would be willing to re-enter Iran as trade sanctions end, Chief Executive Officer Carlos Ghosn said in a Bloomberg Television interview in Davos today.
“Even with all the sanctions, the Iranian market represents 700,000 to 800,000 cars,” Ghosn said. Once an agreement is in place enabling trade to resume with Iran, the country’s new car market could jump to “anywhere between 1 million to 1.5 million cars.”
Rouhani said today said his country won’t impede progress toward a final nuclear accord. The interim agreement implemented this week brought Iran about $7 billion in sanctions relief, according to the U.S.
The deal struck with the the so-called P5+1 group -- the U.S., the U.K., France, Russia, China and Germany -- marked the first breakthrough in a decade-long standoff.
Iran’s will to reach a comprehensive accord is “present and strong,” Rouhani said in a separate speech today in Davos. Hurdles may arise if other parties show a “lack of serious will” to secure a deal, he said.
“One of the theoretical and practical pillars of my government is constructive engagement with the world,” Rouhani said. “Without international engagement, objectives such as growth, creativity and quality are unattainable. We will make use of active foreign policy to achieve economic development.”