Iran's president Hassan Rouhani addresses the World Economic Forum in Davos on January 23, 2014. (ERIC PIERMONT/AFP/Getty Images)[/caption]
In his speech at the World Economic Forum in Davos last week—arguably the most watched address during this year’s global gathering—Iran’s President Hassan Rouhani focused on his country’s economy. He provided a long list of goals, which taken together amount to a very challenging agenda.
As Rouhani put it, he wants his government to prepare the ground for Iran to become one of the 10 largest economies in the world in the next 30 years. Ambitious indeed, but this sort of sloganeering by an Iranian leader is much preferred by both Iranians and the international community over the obstinate and ultimately aimless program of his predecessor, Mahmoud Ahmadinejad.
Rouhani’s rhetoric in Davos was trailblazing in more ways than one. His message was, in essence, that the Islamic Republic of Iran has rediscovered the virtues of being an integral part of the global economy. Whether you blame it on the painful impact of the sanctions of the last few years or a deeper soul-searching in the ranks of the Iranian government, the fact remains that this represents something new.
In the last few years, the world heard a different narrative from Tehran: that of resistance and even divorce from the world, if that was what it took for Iran to pursue its national goals (and remember that the nuclear program was prominent among such goals). And it was not the perpetually clueless Ahmadinejad who spearheaded that exercise in hyping up Iranian independence, but the country’s supreme leader, Ayatollah Ali Khamenei. Back in 2012, Khamenei put everyone in Tehran on notice when he declared he favored a policy of economic khodkafai (self-sufficiency). Many read that to mean Iran was going to emulate the likes of North Korea: isolated, even impoverished, but that it would at least stand up to the demands of world powers.
Rouhnani’s speech in Davos was a 180-degree shift away from the purported ideals of khodkafai. In fact, the Iranian president said “all nations are on the same boat.” In other words, nations will, according to this new Iranian narrative, either sink or swim together. If such thinking gains more traction in Tehran, then the potential policy ramifications could be wide-ranging. As Rouhani must fully appreciate, Iran’s economic reintegration cannot happen without adjustments to some of Tehran’s most hardened and contentious dogma, including the habit of vilifying the United States, Israel and Saudi Arabia.
Putting aside politics, and even Rouhani’s striving for compromise, the distance between his economic ambitions and the endpoint he has in mind is a very steep and arduous path. In Davos, Rouhani repeatedly and loudly asked for foreign investment and urged business leaders to visit Iran and see Iran’s great potentials for themselves.
That Iran is a rich and largely untapped market is not in dispute, but nor can Rouhani ignore the fact that Tehran’s ability to attract foreign investment is not just about building the confidence of investors abroad. It would take a legislative and regulatory shake-up and much more.
According to the World Bank, Iran is today placed 152 out of 189 countries surveyed for business friendly conditions for foreign investors. That’s a drop from 129 in 2011. Among Iran’s neighbors, the United Arab Emirates (23rd on the same list), Saudi Arabia (26th), Turkey (69th), Azerbaijan (70th) and Pakistan (110th) are all ahead of Iran. Only impoverished Afghanistan (164th) lies below.
In other words, Rouhani has to be applauded for his vision and courage in standing up to the orthodoxy that has prevailed in Tehran in recent years. But he has to be reminded that fixing Iran’s economic ills is not as simple as merely inviting foreign investors to visit Iran. It is a much bigger challenge, but Iran would benefit greatly if Rouhani is able to implement what he says he has in mind for his country.
All views expressed in this blog post are those of the author and do not necessarily represent the views of, and should not be attributed to, The Majalla magazine.
