LINKING WITH THE FUTURE

Iran 2016 | ECONOMY | FOCUS: VISION 2025

According to its strategic plan, Iran seeks to become the Middle East's top power by the next decade. Vision 2025, also called Twenty-Year National Vision, embraces a set of goals to create a knowledge-based society with economic growth. In the context of a year based on a resistant economy, President Rouhani acknowledged that Iran's development depends on its interaction with the world.

In accordance with the horizon document, which was prepared by the Expediency Council and ratified by the Supreme Leader in 2005, Iran must be the regional leader in terms of economy, science, and technology by 2025. Creating an inspiring society has required Iran's leaders to prioritize young people and the transfer of knowledge, implementing new technology, creating jobs, and bringing in foreign investment. To that end, the success of Vision 2025 relies on Iran's ability to build constructive and effective international relationships with the world's nations.

A glance at the deals signed with Italy and France illustrates the government's prioritization of economic and technological cooperation in energy, industry, tourism, and finance. “Iran is the safest, most stable country in the entire region. We invite you to invest and we will provide stability and ensure that you can make adequate returns," Rouhani emphasized to European businessmen and politicians. Iran seeks 8% GDP growth, and experts say to be able to achieve it the country needs between USD30 and 90 billion in annual investment. Therefore, minimizing tensions while promoting peace and trust is key for Iran to facilitate the acquisition of foreign investment and technologies needed to develop the country.

Moreover, the JCPOA agreement is the ultimate representation of the importance of linking with the world to achieve future objectives. Resolving the nuclear issue was instrumental to fulfilling the vision's goal of recognition and reintegration in the international system as an equal player. Since then, numerous political and economic delegations have landed in Tehran to boost ties and sign fruitful deals.

Without a doubt, energy has been one of the main topics on the negotiation table, as Iran is seeking to attract more than USD100 billion in investments from international oil companies in a long-term plan to develop more than 70 crude and natural gas projects. By 2025, the Islamic Republic aims to produce 8% of the world's gas and 7% of the world's oil, which would make it OPEC's second-largest producer.

Additionally, Iranian non-oil exports were growing even before sanctions were lifted. After hydrocarbons, the automotive industry is Iran's biggest sector, accounting for about 10% of GDP and employing about 4% of the labor force. Reaching the number one rank in the Middle East's automotive industry based on technological advancement is another of Iran's goals for 2025. Assuming no further sanctions will be imposed, it can be expected that the country will produce up to 2 million vehicles within the next 10 years. Up to 40 foreign automakers, including Peugeot, Mercedes, and Toyota, have declared their interest in using Iran as a hub for exporting their products to neighboring countries.

In recent years, tourism has become the center of attention of national policymakers as another major sector to be focused on. Around 20 million tourists are expected for 2025, which will equate to some USD25 billion in income. This represents 30% growth over the next four years and requires renovating tourism infrastructures, especially in accommodation and transportation facilities. According to the national plan, this will require USD11 billion in investment.

Ultimately, Vision 2025 foresees a total investment of USD3.7 trillion to finance the transition from a resource-based to a knowledge economy. Much of this amount will go toward supporting investment in R&D in areas like biotechnology, nanotechnology, space technology, nuclear energy, and medicine. With external tensions simmering down, the Iranian government sees an opportunity to play a much more significant role in the international arena to improve economic conditions, reduce vulnerabilities, and promote competitive advantages. Seeing Vision 2025 to fruition involves reconnecting its vibrant emerging economy to world markets, with the allure of prosperity for international and local investors, and a brighter future for a young, talented population.