Following the end of most sanctions earlier this year, Iran is one of the most courted countries in the world due to its booming economic prospects. The Czech Republic is seeking a piece of the prospective action with a top level Iranian delegation in Prague on Friday to chart how bilateral economic ties can develop further.
Given the depth of Iran’s economic collapse thanks largely to international sanctions, the rebound opportunities are enormous. Gross Domestic Product outside the energy sector almost halved over recent years with Iranian economists estimating the likelihood of a 30-40 percent boost from the end of sanctions alone.
And if would be investors and sellers are worried about the country’s ability to foot the bill, then there’s the prospect of a flow of cash if oil revenues are quadrupled to previous levels and Iran once again becomes one of the biggest exporters worldwide.
The Czech Republic has already sought to position itself as an attractive partner, trade and industry minister Jan Mládek headed a large business delegation to Iran in January, a Czech Trade office was opened, and an economic cooperation agreement was inked. Other delegations and visits have followed.
On Friday, it was the turn of the Iranians to come to Prague with Minister for Economic Relations and Finance, Ali Tayebnia heading a delegation aimed at deepening economic cooperation. Minister Mládek set out the Czech ambitions:
“It necessary to underline that up till now commercial exchanges have not been that strong. In 2015 it came to 52 million US dollars. We agreed today with minister Tayebnia that this does not at all respond to the potential and that it should be in the short term increased at least 10-fold.”
The Czech Republic has a strong reputation and base to build on having taken part in the breakneck industrialisation of Iran in the 1970s and 1980s. Modernisation of the factories and power plants constructed then would be an obvious starting point. But Minister Mládek underlined the country has a lot more to offer, for example, in the field of environmental projects cleaning up drinking water, pollution, and reducing industrial emissions.
The Iranian minister was already in Prague almost a year and a half ago. He said that both sides now want to get a series of key trade and business promoting agreements between Prague and Tehran in place as soon as possible.
He said one of the most important agreements will be a protection of investment agreement which should be in place at the start of 2017. It is still being vetted by officials in Brussels.
And there should be others, such as a customs agreement and double taxation agreement. There are specific steps as well as putting in place the banking systems and arrangements that will help business.
Minister Mládek said that the Czech Republic has offered to help Iran take a big step to rejoining the global trading environment with membership of the World Trade Organisation (WTO). Czech help over the past decade helped Kazakhstan successfully undertake a similar step.