Friday, April 5, 2019

Irans Economy: SWOT Analysis

Irans Economy SWOT synopsisStrengthsLocation between the Middle East and Central Asia, with access to the Persian Gulf and Caspian SeaIran is the ordinal largest country in the worldThe economy of Iran is the twenty-fifth largest in the world by GDP (nominal) and the 18th largest economy in the world by purchasing power parity (PPP)worlds arcsecond largest proven oil militia, after Saudi Arabia,worlds second largest proven gas reserves after RussiaIt is OPECs (Organization of the Petroleum Exporting Countries) 2nd largest oil exporter and is an energy superpower.Subsidy reform has cut interior(prenominal) consumption of oil and gas and posts more for exportOil and gas aside, Iran is rich in other(a) resources and has a strong agricultural sectorEasy Access to markets of neighboring countriesIran has genius of the highest urban growth judge in the world. From 1950 to 2002, the urban proportion of the population increased from 27% to 60%TSE (Tehran Stock Exchange) has been o ne of the worlds best performing stock exchanges in recent days.The Foreign Investment Promotion and Protection routine (FIPPA) gives some protection to strange investors and relatively good calls for the repatriation of profitsAlthough strangulated in the years since the revolution, Iranians are kn throw for their entrepreneurial skills, which is potentially a strong pull for foreign investors.excellent revolutionize engineering capabilities and technical innovationA large army including elite unitstwo thirds of Irans population beneath the age of 25Young, motivated and active work forceIran is a diverse country, consisting of people of some(prenominal) religious and ethnic backgroundsIran is home to one of the richest artistic traditions in world history and encompasses many disciplines, including architecture, painting, weaving, pottery, calligraphy, metalworking and stonemasonry.Existing historical tourist attractions for improving componental tourismThe culture of Ir an is a mix of antique pre-Islamic culture and Islamic cultureWeaknessesOne product economy (economic growth only rely on oil and gas industry)Little international or multinational involvement.International sanctions make investment and financing transactions difficult.International sanctions discourage foreign oil companies from bringing much needed technical friendship and equipment to maintain oil output levels.International Sanctions are eating into Irans oil revenues, increasing the chances of dreadful social unrest.International sanctions in banking system, means that the sector is underdeveloped and under-competitiveAfter a concerted cause to reduce public debt in recent years there are signs that it is once again locomoteIran has only a few allies in the regionForeign firms are unable to own hydrocarbon resources in IranUnfavorable contract structures limit profitability for foreign investors.Inability of controlling exchange ratesLimited financial or operational freedo mLack of infrastructures in different economical splitThe beginning of the countrys subsidy reform program has lowered its growth prospects and accelerated inflation.Progress on privatization appear remains slow despite some recent encouraging signsStructures of state-run firms are inefficient, which slows down the end product process. inflexible goernment control is highly restrictive to innovationLack of funds in commerce and market-gardening sectionLack of transportation vehiclestraditional production methods out-of-pocket to lack of advanced technologiesBureaucracy constricts only when state-run industries.Poor research facilities (despite ability to reverse-engineer).Decision making ultimately rests with the Supreme LeaderIran has one of the poorest tender-hearted rights records in the regionOpportunitiesThere is a possibility of regional dominance in the short term due to the countrys size and influenceThe gas sector is underdeveloped and there is respectable room to m aximize this source of revenue.government subsidized foundations that dominate Irans non-oil economyAny standardisation of relations between Iran on one hand and the USA and its allies on the other could provide the impetus for a huge reform of the banking sector.The government has granted a number of licenses to new secret banks in recent years these private banks are growing far faster than their state-owned counterparts.A growing population, combined with a shortage of housing, provides opportunities for investment in residential construction.Widespread deployment of enhanced oil convalescence (EOR) techniques could significantly boost output.Considerable untapped gas export potentialUS setbacks in Iraq and Afghanistan go for given Iran an opportunity to assert greater strategic influence in the regionIran still has excerption to resolve nuclear crisis diplomaticallyIran retains support in the international community, notably from China and Russia, which both contradict sa nctions.Opportunities for export if restrictions are lifted.A growing realization that international assistance may be need to develop industry could see further involvement in the future.Being neighbor with underdeveloped countries of Afghanistan and Pakistan uncorrupted climate for agriculture and providing the base for expanding of these productsHaving young, motivated and active workforceHaving border markets provide basis for embraceborder interactionsExisting special economical region and providing the base for economic growthHaving major prolific benefits in mine and industry sectionsHaving good universities and colleges to improve professional work force in the regionExpanding native culture of region and country to other neighboring countriesThreatsLack of privatization will continue to stifle the industry.Concentration on high-profile programs will detract from more essential ground forces research.Ongoing tension over Irans nuclear program raises the prospect of furthe r US and UN Security Council sanctionsEthnic tensions are on the riseHigh youth unemployment.A decline in world oil prices would collect a considerable impact on the economy.There is a stern risk of capital flight due to fears of conflict or sanctions.UN and EU sanctions on Iran pose a significant threat to the participation of foreign firms in the oil and gas sector.Non-performing loan ratios are dangerously high there are serious concerns over the solvency of state-owned banks over the long term.Government-mandated lending to poorer Iranians at low interest rates means that banks have limited control over their lending policies.UN, US and EU sanctions on Irans banking and energy sectors are making it difficult for foreign companies to undertake financial transactions with Iranian entities, and risky to invest in the hydrocarbons sector.The risk of internal political instabilityLong-term fall in domestic oil productionChanges in OPEC/national energy policyStrong regional competit ionPolitical issues make procurement decisions extremely slow.Slow pace of development.Inefficient workforce acts as a further drain on resourcesNot having enough infrastructures for expanding different economical sectionsSafety threats and consequently less investingReligious and tribal networksImmigration of professional workforceHaving unsuitable weather like 120 day sand assaultLack of advanced technologies

No comments:

Post a Comment