I was reading Forbes a couple of days ago and came-up with this rather disappointing analysis of Iran: Out of 144 countries surveyed for Forbes' Capital Hospitality index, Iran was ranked nearly at the bottom at 142 (Iran scored worse than Ethiopia and Chad in Africa).

What is the Capital Hospitality Index?

Our methodology follows a list of principles employed by the U.S. Chamber of Commerce when advising on international investment policy. Seeking out several of the world's top institutions of sociological and economic theory, we gather the results of surveys, statistical studies and socioeconomic data on each of the 144 countries in our index, ranking each based on the Chamber's largely qualitative principles. We then aggregate scores across our 10 separate categories.

By focusing on socioeconomic issues like personal freedom, investor protection, corruption and pro-business policy, the result is a quantitatively driven snapshot of each country's climate for foreign capital, including construction, offshore workforces and other forms of investment abroad.

Iran's Analysis:

GDP GROWTH 2006: 5.0%
GDP/CAPITA 2006: $8,900
TRADE BALANCE 2006: $13.1 bil
POPULATION 2006: 68.7 mil
UNEMPLOYMENT 2007: 15.0%

Iran's economy is marked by a bloated, inefficient state sector, over reliance on the oil sector, and statist policies that create major distortions throughout. Most economic activity is controlled by the state. Private sector activity is typically small-scale workshops, farming, and services. President Mahmud AHMADI-NEJAD has continued to follow the market reform plans of former President RAFSANJANI, with limited progress. Relatively high oil prices in recent years have enabled Iran to amass nearly $60 billion in foreign exchange reserves, but have not eased economic hardships such as high unemployment and inflation. The proportion of the economy devoted to the development of weapons of mass destruction remains a contentious issue with leading Western nations.

[ SOURCE: FORBES (http://www.forbes.com/2007/04/03/capital-hospitality-index-biz-cx_daa_07caphosp_land.html) ]

Our methodology follows a list of principles employed by the U.S. Chamber of Commerce when advising on international investment policy.

And you wonder why its on nr 142 out of 144. This is based on US investment perspective ;)

...Yeah, but foreign countries look at these same numbers.

Iran's Analysis:

The proportion of the economy devoted to the development of weapons of mass destruction remains a contentious issue with leading Western nations.

[ SOURCE: FORBES (http://www.forbes.com/2007/04/03/capital-hospitality-index-biz-cx_daa_07caphosp_land.html) ]


Hmm wasnt that a bit political there at the end. This is not a real economic matter and hints that this is a politically biased piece. I would actually be surprised if this wasnt politically biased given the resources spent and lengths that the US government is going to, to undermine the Iranian government.

^well said

everybody has an agenda and i imagine forbes in particular would...

Yes, Forbes magazine is pro-right, but if you look at the website for their analysis, the statistical figures themselves don't paint a good picture of Iran either. The figures don't lie!

Besides, Cuba and Syria are above Iran in the figures and both are also a thorn on America's side.

One thing about research and statistics is that you can make them what every you want. That's the beauty of research and statistics. I can use the exact same data to prove pro or against anything that research is about. Plus I can use exactly the same research field and analysis to give two total different outcomes.

What a typical Iranian reaction: Rather than blaming ourselves for the problem, we find other excuses. Regardless of what the statistics say, why don't more foreign companies invest in Iran? Could it be the corruption in the country? Could it be the poor political atmosphere? All of these factors were discussed in the report.

My reply is basic statistics. Just read a book by David S. Moore or similar and you shall see that it's not an Iranian reply.

One of the reason I don't take this report seriously is because I have seen reports from investment banks. One publicly available report is that of Goldman Sachs. One of the world biggest investment banks. Who consider Iran a good place to invest. 4 years ago they advised people to invest in Brazil, Russia, India, China. Their next advise was and still is:


Bangladesh
Egypt
Indonesia
Iran
Mexico
Nigeria
Pakistan
Philippines
South Korea
Turkey
Vietnam



You can read the full report here. (http://www2.goldmansachs.com/hkchina/insight/research/pdf/BRICs_3_12-1-05.pdf)


The last few years there have been huge foreign investment made in Iran. And with the privatization of companies, this is only going to increase.

My reply is basic statistics. Just read a book by David S. Moore or similar and you shall see that it's not an Iranian reply.

The last few years there have been huge foreign investment made in Iran. And with the privatization of companies, this is only going to increase.

I'm fully aware of David Moore's work (I read his most recent book) and Goldman Sachs, and the Next 11 mentioned by GS.

I don't deny that Iran has the potential to be great! It does! In fact, I think that Iran has the potential to be the regional economic, political and military power in the Persian Gulf.

However, the reality is quite different. As I mentioned in my older post, Iran's economic and political problems prevent it from realizing its true potential. If you read the Goldman Sachs report carefully, this is clearly shown.

We call this larger developing-country set the Next Eleven (N-11), though whether they will "emerge" is still an open question for many. (page 7)

Iran does score well on the macroeconomic potential, education and technological factors, but is below the average in the political scales: It's below average in political stability, forth worse in the rule of law, and has high corruption (all on page 17). Finally, from 2025 to 2050, Iran will actually drop from the world's 16th largest economy to the 21st (smaller than Pakistan and Egypt which have limited natural resources).

As for the "huge" foreign-investments: Iran had $10 billion in foreign investments last year. That's big, but not huge! The problem with investment in Iran is not because of political bias, it's because investing in Iran isn't so easy:

Iran's economy is unfree in many ways. Business freedom, trade freedom, investment freedom, financial freedom, property rights, and freedom from corruption are all weak. Business licensing and closing are regulated heavily by an intrusive and highly inefficient bureaucracy. High tariff rates and non-tariff barriers impede trade and foreign investment alike. Corruption is rampant, and the fair adjudication of property rights in a court of law cannot be guaranteed. (source below)

Index of Economic Freedom (http://www.heritage.org/research/features/index/country.cfm?id=iran)

I agree with you that it has more potential than is currently beeing used. I just don't think that the Forbes survey is correct for putting Iran on 142 from the 144 countries.

It's not just Forbes. The link that I provided (Index of Economic Freedom) put Iran at 150 out of 157 countries.

disappointing.

i wonder wat it was in the 70s :cheers: