Chapter 11

Business Environment and Management Practices

Open for Business?

While Iran represents a sizeable economy, the foreign direct investment (FDI) in the country has been very insignificant over the past decades. The World Bank data shows that inflows of FDI reached $909 million by 1978 but subsequently fell to $164 million in 1979 and $80 million in 1980.1 In 2007, the inflow of FDI in Iran hovered over $754 million, which is a fraction of neighboring economies such as Turkey and Saudi Arabia.2 Iran has suffered from a significant domestic capital flight mainly to the UAE and Turkey. What is more, Iran’s GDP has contracted by 25 percent in the past three years from 2011 to 2013 mainly due to international sanctions. In addition ...

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