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C.P. Ho

Iran is a wonderful place to visit. It boasts an ancient civilisation,  a unique culture dating back to the Persian empire, and friendly people in cities of mystique and magic.  
In this context, and taking into consideration its geopolitical situation, it is little wonder that present-day Iran remains a world player. For one thing, it has the world's second-largest reserves of oil and natural gas. 
This  means its hydrocarbon industry accounts for more than 80 per cent of government income. Any drop in oil prices  is acutely felt. This is of grave concern to the authorities, as US trade sanctions continue and the European Union is considering tightening economic and other measures in response to Iran's  nuclear programme.
Analysts suggest much depends on how, and if, members of Opec, the oil-producers' cartel,  cut any deal with non-members.  
Since last September, Opec has cut production in the belief that the price this year will not exceed US$75 a barrel.  As Opec's second-largest producer, Iran - through its oil minister, Gholamhossein Nozari  - is on record as saying that the future of energy supply in the world can only be secured 'with US$75 to US$80 a barrel'. He has  called for co-operation between Opec members and non-members to maintain the status quo. 
'It seems that whenever Opec members cut output, non-Opec members increase it,' he reportedly said. 'These two [groups] should co-operate with each other to stabilise the market.'
Iranian authorities have almost always adopted a pragmatic approach to solving their problems. In matters of trade and commerce, they are doing their best to reduce economic dependence on oil exports. At the same time, they are working to import less from the west and increase commercial and other ties with the rest of the world.
In this respect, they have been particularly successful working with Turkey, the United Arab Emirates and Qatar. They also wield growing influence in Syria, Lebanon, the Palestinian areas and - strangely enough because of their costly 1980-1988 war - Iraq. 
China also comes to mind, with the Iran-China Chamber of Commerce and Industries  leading the charge to make it the leading exporter of goods to Iran. The head of the chamber, Asadollah Asgaroladi,  says  sanctions by the US and others leaves Iran no choice but to look east.
 'Our factories are dependent on [western]  technology. But what else can we do when they  turn their backs on us and bow to US pressure?' he said.
There is, therefore, a shift in Iran doing business, from Europe to Asia, from big countries to small ones and from conglomerates to smaller companies. In terms of doing business and investing in Iran, this is both the best  and  worst of times.
As well as oil and gas, Iran also has rich mineral deposits, including  the world's largest zinc reserves and the second-largest copper reserves.  Its relatively underdeveloped reserves of iron, uranium, lead, chromite, manganese, coal and gold  provide opportunities for firms offering mining equipment, know-how, capital and investment.
As the largest telecoms centre in the Middle East, Iran aims to turn itself into a market leader in the region, a trend the government is encouraging   through a number of privatisations  and by promoting private investment.
Environmental issues also concern the authorities. The capital, Tehran, needs technology to help curb pollution,  particularly from  vehicle emissions. The mineral processing and petrochemical industries seek ways  to upgrade production while minimising the environmental impact. And the Ministry of Energy is interested in water and waste water management, and is looking to set up water treatment plants.
Iranian exports that find favour all over the world include agricultural commodities, textiles and leather products, as well as handicrafts and its famous carpets.  
But Iran is under severe strain from the US and EU sanctions. Payments and receipts sometimes have to be indirect and made through brokers or middlemen countries. Logistics is also a problem: much of Hong Kong's exports  now need to transit Dubai before reaching Iran.
In the present worldwide economic climate, Iran also has to contend with surging inflation, high unemployment and low wages. 
New light may be shed on these issues over the next few months from a number of sources. One is the outcome of the presidential election in June. The other is how new policies of the Obama administration will shape relations with Iran. 
Both deserve watching, especially for those thinking of doing business or investing in Iran. 
C.P. Ho, a former news agency correspondent and television executive, writes occasional articles for newspapers and magazines



Iran as a trade frontier