Improvement Expected in Iran's Business Environment

July 29, 2002 - 0:0
LONDON -- Iran's business environment is forecast to remain "very poor" despite expectations of a big improvement over the next five years, according to a survey carried out by the economist intelligence unit (EIU).

The London-based consultancy also predicts that the U.S. will fall back from having the best business environment in the world to fifth place, behind the Netherlands, Canada, Finland and the UK.

In its survey of 60 countries, the EIU calculated that Iran's business environment would improve by rating of 1.5, the third highest, between 2002 and 2006 to a total score of 4.82, but up just by one place from its last place in the league between 1997 and 2001.

The gradings seek to measure the attractiveness of a country to sustain net foreign capital inflows and considers 70 quantitative and qualitative indicators across ten categories of the business environment, IRNA reported.

The EIU predicted that the overall trend in the global investment climate would continue over the next five years despite the world's economic slowdown, the effects of September 11 attacks in the U.S. and the crisis in Argentina.

But for the U.S., the business environment was expected to fall by 0.03 points to 8.66 due to ongoing threats of terrorist attacks and an appreciable risk that the U.S. will engage in large-scale armed conflict with potentially damaging consequences for business.

Moving into first place, the Netherlands was seen as the best place to conduct business due to strong performances across all categories. Canada was expected to move up from fifth to second place, Finland from eighth to third and the UK down from third to fourth.

The biggest decline in the business environment was expected to be experienced in Argentina, with its global ranking plummeting 20 places to 50th position. Nigeria was put in last place behind Iran.

The EIU suggested that the best improvement in the business environment in the next five years would be in Ukraine, increasing its score by 1.78 points to 5.36, up six places to 53rd, and in Russia, with a rise of 1.51 points to 5.8 and up to 46th place.