Country Notebook of the Islamic Republic Of Iran

The Country Notebook—a Guide for Developing Marketing Plan
The Country Notebook Outline (Click here for more information about the Country Notebook.) • I. Cultural Analysis • II. Economic Analysis • III. Market Audit and Competitive Market Analysis • IV. Preliminary Marketing Plan

I. Cultural Analysis
Guideline I. Introduction

Iranian culture have a long, creative and glorious history, unlike many other middle east countries Iran managed to remain independent throughout much of its history, today Iran has a population about 7o million persons and since 1979 Iran is an Islamic republic II. Brief discussion of the country‘s relevant history

The history of Iran is long and complex its shape is determined by the rise and fall of successive dynasties-with intervals of chaos and confusion. In 1954 Iran allowed an international consortium of British, American,frensh ,and Dutch oil companies to operate its oil facilities ,with profits shared equally between Iran and the consortium ,Iran established closer relations with the west joining the Baghdad pact and receiving large amounts of military and economic aid from the untitled states until the late 1960s Starting 1960 and continuing into the 1970s the Iranian government at the shah initiative undertook a broad program designed to improve economic and social conditions land reform was a major priority. In 1973 short of the end 1954 agreement with the international oil producing consortium the shah established the full control over all aspects Iran's oil industry and it used this situation to became a leader in the rising of oil prices in disregard of the tartan agreement in 1971 In 1979 the nation under the leadership of ayatollah Khomeini they made revolution and the current republic of Iran was founded



Geographical setting

Iran a middle eastern country, its west Asia and south of Caspian sea and north of the Persian gulf is three times the size of Arizona ,it shares borders with Iraq,turkey,Azerbaijan,Turkmenistan,Armenia,Afghanistan and Pakistan The Elburz Mountains in the north rise to 18603ft at mount from northwest to southeast the country is crossed by desert 800 mi (1287 km) A. Location Middle east ,bordering the gulf of Oman ,the Persian gulf, and the Caspian sea, between Iraq and Pakistan ,its country neighbors‘ Afghanistan and Pakistan in the east and turkey to the west B. Climate Iran has a hot climate characterized by long hot dry summers and short cool winters C. Topography Most of the land area consists of a plateau 1200 m(4000 ft) above sea level and strewn with mountains. Iran is geologically unstable with occasional severe earthquakes about 140000 people were killed in Iranian earthquakes during the twentieth century IV. Social institutions

Iran is a theocratic republic as such the situation of woman is very much affected by Islam and sharia law the constitution supports equal rights to large degree but its enforcement is generally poor and its provision is still poor Woman rights activates in Iran is continue to face obstacles in their attempts to improve the conditions for women but recent studies notes that woman human rights in Iran have advanced especially in regard to family ,religion and community A. Family Iranian woman still face many challenges within the family context, the average age of marriage appears to be increasing for both men and woman but the incidence of early marriage is still high the legal age of marriage is 13 years and fathers have the right to apply for permission to marry their daughters as early as the age of nine 18% of girls in Iran between 15 and 19 years of age were married, divorced or widowed the parental authority rests with fathers reflecting the sharia principle that fathers are the natural guardians of their children


1. The nuclear family This is the dominant model in Iran father ,mother ,brother and sister and they are closely bond to each other, families tend to be small, the family in Iran is the basis for social cultural ,the concept of family is more private than in many other cultures ,females relatives must be protected from out outside influences and are taken care of all times ,it is inappropriate to ask about Iranian wife or other female relatives 2. The extended family Is quite close 3. Dynamics of the family Loyalty to the family comes before other social relationship, even business a. Parental roles Is very important as parents is being involved in making major decisions for their child like whom they should marry and what profession they should have, parents spends a lot of time with their children and if they can afford to support their children all the way until they have finished all their education and beyond, family traditionally comes before the individual b. Marriage and courtship It's a lot more prevalent for males to marry non –Muslim foreigners than for males due to the fact that Muslim woman are legally barred from marrying non Muslim unless if they convert into islam, iraninan family and inheritance lows favor males, these issues might create serious problems at times of divorce custody rights and death, if marriage are registered with the Islamic authorities the Iranian legislation will be applied to such marriage both in Iran and outside the country 4. Female/male roles (changing or static?) Static


etc. Primary education (quality. there is a middle guidance cycle cover grades from 6 to 8 for children from 11 to 13 years old this cycle is providing children with general education in the phases the children interest and abilities are recognized then they applied for exam to proceed for the next cycle b. Education 1.this is a four year stage which covers grade 9 to grade 12 from age 14 to 17 secondary education is divvied in to two main branches academic/general and technical /vocational c. The role of education in society a. levels of development. Iran also it runs number of schools outside Iran Persian gulf countries and some in European countries 2. etc.and post secondary levels )is free of charge through private schools and universities authorized by law are allowed to charge tuition fees .) Its mandatory under the Iranian institution its starting from 5 years old student take exam at the end of each year on which their promotion grade is based at the end of grade 5 students take a notion wide examination those who pass the exam are qualified to proceed to the next cycle.B.1% C. etc.secondary. Secondary education (quality. levels of development.5% Female 87% Total adult literacy rate 89. levels of development.) Due to increasing number of applicants admission to post secondary institutions is through a nationwide entrance examination and only the most talented students can enter universities . Some points worth to mention English as a second language is introduced from grade 7. Higher education (quality. Literacy rates Male 90. Political system 4 .there is two main ministries is responsible for ministry of cultural and higher education and ministry of health and medical education .) 50000 Iranian students currently is studying abroad in general education in (primary.

1. Stability of government Stable 4. Role of local government 5 .which works according to Iranian constitution and Islam and other political entities which help the formation of the complete political structure .executive power ). And the current is Mahmud Ahmedi nejad it‘s the sixth president since Islamic republic 3. judiciary power .the collection of direct tax the tax on employees salaries and workers wages On the whole taxes in Iran are divided in to five categories namely : 1) Taxies on companies 2) Occupation taxes 3) Consumption and sales taxes 4) Import taxes 5) Taxes on salaries 5. the first of its type in the world. Special taxes The taxes in Iran is indirect system and for the same reason it is not transparent enough the only case low is stress on it .more importantly .Iran leadership is the backbone of Iran political system Islamic revolution gained victory as a result of ayatollah Khomeini and he took the control since this republic revolution. therefore. Political structure The political system of Islamic republic of Iran is the result of the Islamic revolution in 1979. Political parties Iran government( legislative power. 2.the supreme leader who is the highest authority in the Islamic republic of Iran revolution . Iran political system established afterward should have been defined according to the ideals of such revolution.

it was based on feudal lines that were drawn in part by economic and social functions. implies that the central authority exercised power through a pyramidal structure local terms this scholar is called the mujtahid . In general.Local councils are elected by public vote to 4 years. The title king of kings.economic . Code. socialist.cultural.they many different responsibilities including electing mayors . or Islamic-law country? Islamic law country E. common. those local councils with the parliament are decision making and administrative organs of the state .planning and coordinating national participation in the implementation of social . For example the lower and uneducated classes may regard females as inferior or different who 6 . Legal system 1. the supreme leader of Iran appoints the mujtahid as the head of the judiciary system and he serves a term of five years .this head of the judiciary system has the authority to nominate the ministry of justice 2. educational and other welfare affairs D. Crosscutting these divisions was a tribal structure based on patrilineal descent.costar active . Group behavior * Iranian culture is Class based * Tradition for most is rooted in religion and class and patriarchy have been constant features of Iranian society since ancient times * Class in its simplest form is mainly based on income and financial status * In Iran different classes have different cultures . Traditional Indo-Iranian society consisted of three classes: the warriors or aristocracy. Organization of the judiciary system It headed by a scholar in Islamic law that has a sense of judgment and is capable of ruling on legal matters through interpretation of Islamic legal sources . used even in the 20th century by the shahs of Iran. Social organizations Little is known of Iranian social organization in the period. the priests. and the farmers or herdsmen.

including personal and social relationships. female dress codes are modest and a lot more conservative with darker colors and little make up. Consequently for the traditional practicing Muslim the only accepted relationship between the sexes may be through marriage * In such cases what is usually classified as group behavior could also be identified with religious behavior * The whole iranian dress well and dress codes are very important in distinguishing modern and traditional groups. On the other hand the modern classes normally strive to guarantee the equality of sexes and eliminate gender discrimination. exposing body parts or dress sexy while in company of males. With such groups. * Tradition is mostly based on religion particularly Islam and its‘ prescribed codes of behavior * There is a belief held by many Muslims that ―Islam is a body of values. * With the more modern. ideas and beliefs that should encompass all spheres of life. men and women are expected to dress expensively and fashionably with expensive jewelry and accessories (mainly watches and rings for men) and drive luxury cars. at mixed gatherings males and females normally end up as clusters on their own if not segregated in the first place. listened to and are treated accordingly 7 . being loud is considered inappropriate unless people know each other very well * Respecting elderly is another ancient practice that has survived. With the more traditional. economics and politics‖. it is not necessarily for religious reasons * Iranians party a lot.are entitled to a lesser position in the society. females have no problems wearing heavy make up. * Generally with the affluent. are great entertainers and are known for their hospitality and generosity at such occasions * People are anticipated to behave politely at parties. Traditionally the older people are respected. * On the whole Iranians dress up formally even for ordinary parties and dressing up casually is reserved for very informal occasions with immediate members of the family * Dressing up formally and appropriately is also regarded as a sign of respect and people may get offended if their guests arrive in casual outfits and sneakers * Contrary to the stereotype images of Muslim males through the media most Iranian men do not have beards and if they do.

The Upper Classes * The post revolutionary upper classes consisted of some of the same elements as the old elite. whom they should marry and what profession they should have. 8 . Due to economic necessity and with the phenomenal increase in the number of highly educated Iranian women such culturally accepted norms are creating major problems for working mothers and challenging the status quo. Social classes * Wealth was important. marital relationships tended to bind together important elite families. and in the future the absence of such influence could impede the acquisition of new wealth. have an Iranian ID or passport 2. industrialists. They are not able to own property in Iran.* Gender roles are normally well defined and clear. and large-scale merchants * For the most part. *Mothers and recently fathers spent lots of time with their children and if they can afford it they will financially support them all the way till they have finished all their education and beyond * Children born from non-Iranian fathers can not became Iranian citizens since it is their fathers‘ nationality that matters and not their mothers. such persons no longer had any political influence. however. financiers. The priority for females is marriage and childbearing. Thus. but acquiring and maintaining wealth tended to be closely intertwined with access to political power * Since being part of an elite family was an important prerequisite for entry into the political elite. * Wealth was apparently no longer an attribute of authority * Religious expertise and piety became the major criteria for belonging to the new political elite. key government administrators held their positions because of their perceived commitment to Shia Islam. * Iranian culture is adult oriented with parents being involved in making major decisions for their children such as. such as large landowners.

The Middle Classes *After the Revolution of 1979. including entrepreneurs. who valued a role for religion in both public and private life. regarded a foreign education with suspicion. *Prior to the Revolution. refusal to conform to religiously prescribed dress and behavior codes has resulted in the loss of government jobs. were divided according to perceived skills. As a result of these tensions. The Working Class *The industrialization programs of the Pahlavi shahs provided the impetus for the expansion of this class. bazaar merchants. *Since the Revolution. The new political elite. rather than sharing a common identity. In some cases. and the junior ranks of the Shia clergy *Some middle.class groups apparently had more access to political power than they had had before the Revolution because the new political elite had been recruited primarily from the middle class. the higher grades of the civil service. who had a secular outlook. but it appears that the secular middle class has resented laws and regulations that were perceived as interfering with personal liberties. professionals. however. *The workers within any one occupation. *The unions played only a passive role from the viewpoint of workers. the composition of the middle class was no different from what it had been under the monarchy *There were several identifiable social groups. thousands of Western-educated Iranians have emigrated since 1979. The religious outlook has dominated politics and society. teachers. and those suspicious of Western education. medium-scale landowners. accordingly. 9 . military officers. an extremely high value had been placed upon obtaining a foreign education. the middle class was divided between those possessed of a Western education. *The middle class was divided by other issues as well. and managers of private and nationalized concerns. union activity was strictly controlled by the government. these two outlooks have been in contention. Before the Revolution. Under both the monarchy and the Republic. many members of the middle class who were educated abroad have been required to undergo special Islamic indoctrination courses to retain their jobs.

* The lower class is divided into two groups: those with regular employment and those without. Kurd 7% Arab 3% Lur 2% Baloch 2% Turkmen 2% Other1% F. Business customs and practices Doing Business . ethnicity. 10 . A suit is standard although wearing a tie is no necessary. 4. Race. and generally marginal existence. performance of manual labor.Dress *As a male you would be expected to be smart and conservative. women should wear very conservative clothing that covers arms. * Whether doing business in Iran or visiting. and subcultures Persian 51% Azerbaijani 24% Gilaki and Mazandarani 8%. legs and hair.Meeting and Greeting *When meeting someone in a business or official context always shake hands Doing Business .The Lower Class * Members of the urban lower class can be distinguished by their high illiteracy rate.

etc will close for 2-3 weeks . No-Rooz is the major holiday for Iranians . * Implementing decisions are just as slow. families. etc. Eid-e Fetr (festival celebrating the end of Ramadan).m.Other times to avoid doing business are Ramadan (the month of fasting). All offices. *Iranians enjoy haggling and getting concessions so be prepared for long negotiations. Wait for your counterpart to initiate the change in conversation to business matters. * There are a few key times to avoid in Iran. 11 . Friday is a holiday. jeans and scarves that barely cover the hair However.m.* However.Meetings *If you plan on doing business in Iran appointments should be made in advance both via telephone * Business hours are Saturday to Thursday 9 a. Eid-e Ghurban (celebrating the end of the pilgrimage) and Ashura (the tenth day of Muharram). Doing Business . * If you are doing business with government officials in Iran be prepared to be kept waiting. * Decision making can be slow. shops. Applying pressure in a non-confrontational way can help speed matters up although the most effective way to do so is to use people of influence to help you.5 p.Negotiations *Your success in business is defined by your aptitude to build effective personal relationships combined with a clearly outlined and well presented proposal. It is most likely that you will meet and negotiate with less senior members of a family or state department first.m. Once you are seen as trustworthy you will then move on to meet more senior members. . Lunch is usually an hour at around 1 p. work. Doing Business . Iran's red tape and layered bureaucracy means a lot of waiting. as a foreigner it is best to err on the side of caution. The administration and bureaucracy in Iran can be chaotic * At the beginning of any meeting engage in niceties and ask after people's health. businesses. the last decade Women can now be seen wearing make-up.

the official state religion. Yarsanis.are Muslims who adhere to Shia Islam. Mecca. Mandeans. Religion and aesthetics A. the majority of Muslims throughout the world follow Sunni Islam. The remaining 2% are non-Muslim religious minorities. and Shia Islam today * While always a minority the Armenian Christians have had an autonomy of educational institutions such as the use of their language in schools 2. The Prophet Muhammad. Which religions are prominent? The overwhelming majority of Iranians . In contrast. a member of the Hashimite clan of the powerful tribe of Quraysh. Around 89%[1] belong to Shi'a branch of Islam. proclaimed his prophetic mission in Arabia in 612 and eventually won over the city of his birth. Abu Bakr. Islam. Orthodox doctrines and structures *Christianity in Iran has had a long history. Within one year of Muhammad's death in 632. Jews. Membership of each religion Islamic Conquest of Iran The Bedouin Arabs who toppled the Sassanid Empire were propelled not only by a desire for conquest but also by a new religion. and Christians 1. dating back to the very early years of the faith *Christianity has always been a minority religion.V. Zoroastrians. Arabia itself was secure enough to allow his secular least 90 percent of the total population . 12 . 3. including Bahá'ís. the first caliph. to the new faith. and about 9% belong to the Sunni branch of Islam. to begin the campaign against the Byzantine and Sassanid empires. overshadowed by the majority state religions— Zoroastrianism in the past. Religion and other belief systems *Most Iranians are Muslims.

Like the Christians. and Protestant Iranians converted by missionaries in the nineteenth and twentieth century's.000 Assyrians. There were an estimated 350. virtually all Baluchis and Turkomans. They generally enjoy the same civil liberties as Muslims. the Zoroastrians are recognized as an official religious minority under the Constitution of 1979. the Jews have not been persecuted. The Safavid dynasty made Shia Islam the official state religion in the sixteenth century and aggressively proselytized on its behalf. and there are even a few among the Kurds. Most Bahais are urban. and a minority of Arabs are Sunnis. The Armenians are predominantly urban and are concentrated in Tehran and Esfahan.Shia Although Shias have lived in Iran since the earliest days of Islam. smaller communities exist in Tabriz. the Jews have been viewed with suspicion by the government. It is also believed that by the mid-seventeenth century most people in what is now Iran had become Shias. Zoroastrianism in in Iran Iran Like the Christians and Jews. Unlike the Christians. The majority of Bahais are Persians. may seek employment in the government. and a small number of Roman Catholic. some 32. they have not been persecuted because of their religious beliefs. Sunni Islam in Iran Sunni Muslims constitute approximately 8 percent of the Iranian population. probably because of the government's intense hostility toward Israel. The Bahais are scattered in small communities throughout Iran with a heavy concentration in Tehran. an affiliation that has continued. but there is a significant minority of Azerbaijani Bahais. Bahai Islam in Iran The largest non-Muslim minority in Iran is the Bahais.000 Armenians. Arak. Judaism in Iran The Constitution of 1979 recognized Jews as an official religious minority and accorded them the right to elect a representative to the Majlis. like the other legally accepted minorities. it is believed that most Iranians were Sunnis until the seventeenth century.000 Bahais in Iran in 1986. especially in Fars and Mazandaran. as are small communities of Persians in southern Iran and Khorasan. A majority of Kurds. Anglican. but there are some Bahai villages. and other cities. Although Zoroastrians probably have encountered individual instances of prejudice. and there was one Shia dynasty in part of Iran during the tenth and eleventh centuries. 13 . They are permitted to elect one representative to the Majlis and. Christianity Iran's indigenous Christians include an estimated 250.

7. 10. Membership in the social security system for all employees is compulsory. Living conditions The Islamic Republic of Iran portrays its self as the champion of Arab rights in all of the abovementioned countries. 11. Protecting orphan children and unprotected women. Helplessness. Accidents and injuries. Iran did not legislate in favor of a universal social protection. Poverty and inequity alleviation. raped and executed in Iran just because they raise their voices about the gross living conditions of Arabs in Iran. Assistance and rescue. Health care and medical insurance. 2. The province of Khuzestan. but the Arab population of Iran faces discrimination and violence in all spheres of life. SSO is a nongovernmental organization and it is solely financed by contributions (with participation of insured (7%). Planning particular insurance system for widows.VI. the Center of the Statistics of Iran estimated that more than 73% of the Iranian population was covered by social security. the Social Security Law was approved and the SSO was established. 9. This kind of policy is expected from the regime in Tehran. 5. Old-age. Unemployment. which has an Arab majority. disability and death. 3. old women and self-dependent women. In 1975. Physical. employer (20-23%) and government (3%)).Social protection is extended to the self-employed workers. produces the majority of Iran‘s oil. Social security Social Security Organization (SSO) is a social insurer organization in Iran which provides coverage of wage-earners and salaried workers as well as voluntary coverage of self-employed persons. but what strikes Arabs in Iran as strange is that no Arab country or organization raises their plight or objects to Iran‘s treatment of their kinsmen. Every year hundreds of Arab-rights activists are imprisoned. mental and psychic disability. only to send its oil profits to Arab-extremists in other parts of the region. Protecting mothers especially during the maternity period and child-rearing. 12. Retirement. E. tortured. but none of the benefits of the oil reach the people living in the region. 14 . 8. SSO provides the following services: 1. but in 1996. 4. 6. The Islamic Republic of Iran drains Khuzestan of its riches and systematically oppresses the Arab population. who voluntarily contribute between 12% and 18% of income depending on the protection sought. loss of caretaker and social vulnerabilities.

and its overall health system performance 93rd among the world's nations. Immunization of children is accessible to most of the urban and rural population.[3] The World Health Organization in the last report on health systems ranks Iran's performance on health level 58th. compared to an IMR of 122 per 1.F. the free encyclopedia Imam Khomeini hospital Health care in Iran and medical sector's market value was almost US $24 billion in 2002 and was forecast to rise to US $31 billion by 2007. reflecting the increasing demand on medical services. Iran has been able to extend public health preventive services through the establishment of an extensive Primary Health Care Network.6 and 35. to $50 billion by 2013. which will boost the population growth rate and subsequently the need for public health infrastructures and services. With a population of almost 70 million. The country faces the common problem of other young demographic nations in the region.6 per 1. and life expectancy at birth has risen remarkably.000 live births respectively in 2000. Infant (IMR) and under-five (U5MR) mortality have decreased to 28.3 billion in 2008.2% of GDP in Iran in 2005. As a result child and maternal mortality rates have fallen significantly. The health status of Iranians has improved over the last two decades.000 and a U5MR of 191 per 1. Health care Health care in Iran From Wikipedia. Total health spending was equivalent to 4. 73% of all Iranians have health care coverage.000 in 1970. Total healthcare spending is expected to rise from $24. which is keeping pace with growth of an already huge demand for various public services. 15 . The young population will soon be old enough to start new families. Iran is one of the most populous countries in the Middle East.

Some dialects. B. Spoken versus written language(s) The second most widely spoken Iranian language after Persian is Kurdish. and people from each city can usually be identified by their speech. There are also many ‗new‘ Iranian languages which have emerged over time. Official language(s) The official language of Iran is Persian (the Persian term for which is Farsi). Persian is spoken as a second language by a large proportion of the rest. They are spoken by people living across the Iranian plateau but unfortunately many are now diminishing due to more dominant surrounding languages. it is written in the Perso-Arabic script but there is no established written tradition of this language. The following two cases give an example of the new Iranian languages: Pashtu is a fairly new Iranian language which is spoken by individuals living in southern Afghanistan and northern Pakistan. Many different dialects of Persian are spoken in various parts of the Central Plateau. Baluchi is spoken primarily within south eastern Iran and Western Pakistan. are distinct enough to be virtually unintelligible to a Persian speaker from Tehran or Shiraz. although it has additions from Urdu as opposed to the Latin alphabet. 16 . Language A. As with the Kurdish language it is primarily written in the Perso-Arabic script. Kurdish script is based on the Perso-Arabic script and the Latin alphabet. It is the language of government and public instruction and is the mother tongue of half of the population.VII. such as Gilaki and Mazandari. Again.

VIII. They are typically considered "dialects" of Persian. is a group of Western Iranian languages spoken in villages and towns of central Iran. Executive summary writing guide [insert text here] IX.C. mostly in Markazi and Isfahan provinces. or Central Iran. Dialects Central Iranian. Sources of information [insert text here] X. Appendixes [insert text here] 17 . and many are giving way to Persian among the younger generations.

now plans to reduce government subsidies. economic mismanagement. and corruption.648. and an increasingly bloated and inefficient public sector. Mahmud Ahmadinejad. More than 500 companies remain state-owned. Total 18 . Introduction Iran‘s economy has been crippled by the 1979 Islamic revolution.372 sq mi). particularly for food and energy. and privatization has been negligible in the past year. His regime. has led a violent crackdown against opposition forces. II. Iran has a population of around 78 million.II. reinstalled as president after a June 2009 election that sparked widespread political protests. which has greatly expanded government spending. Iran‘s economy remains burdened by rising inflation. corruption. which provide about 85 percent of government finance. It is a country of particular geopolitical significance owing to its location in the Middle East and central Eurasia A. Economic Analysis Guideline I. Unemployment remains high. Heavy state interference in many aspects of private economic activity has resulted in economic stagnation in Iran‘s non-oil sector and a serious lack of overall economic dynamism. International concern about Iran‘s nuclear development and support for terrorism remains high.195 km2 (636. Population The 18th largest country in the world in terms of area at 1. A gradual decline in oil production combined with lower world oil prices has reduced oil export revenues. A restrictive business and investment environment continues to hamper private-sector development. costly subsidies. and replace them with cash payments to low-income Iranians. the Iran–Iraq war.

193/female 27.9% (male 28.) B.55 births/1.) 1.It is a growing population it is now reaching about 77.846) (2011 est.055.248% (2011 est.05 male(s)/female Under 15 years: 1. Distribution of population 1. Birthrates 18. Sex At birth: 1.083. Growth rates Annual population growth rate 1.220 (July 2011 est.170.445) 65 years and over: 5% (male 1. Age 0-14 years: 24.891.000 population (2011 est.608.) 2.128.02 male(s)/female 19 .1% (male 9.) 2.427) 15-64 years: 70.342/female 9.844.967/female 2.05 male(s)/female 15-64 years: 1.

000 population (2011 est.600 (2010 est. A. Gross national product (GNP or GDP) Gross National Product. GNP is the total value of all final goods and services produced within a nation in a particular year. Kurd 7%. other 1% III. Basically. Azeri 24%. Economic statistics and activity Iran's economy is closely tied to its natural resources since 80 percent of the country's export revenues are derived from oil and gas. and rural density and concentration) Urban population: 71% of total population (2010) Rate of urbanization: 1. Important imports include motor vehicles.13 migrant(s)/1.7 billion (2010 est. under the assumption that a higher GNP leads to a higher quality of living. Iran contains 8. 1. leather. minus income of non-residents located in that country. Gilaki and Mazandarani 8%. Lur 2%. GNP measures the value of goods and services that the country's citizens produced regardless of their location. Migration rates and patterns -0. steel.) 20 . Turkmen 2%. pistachios.) 5. Rate of growth (real GNP or GDP) 1% (2010 est. plus income earned by its citizens (including income of those located abroad). suburban.65 years and over: 0. Ethnic groups [Persian 51%. GNP is one measure of the economic condition of a country.) B. Other important exports are carpets.) 3.) 2.02 male(s)/female (2011 est. pharmaceuticals.9 percent of proven global oil reserves. chemicals. and caviar.9% annual rate of change (2010-15 est.) 4. and food. Arab 3%. Geographic areas (urban. all other things being equal. machinery. Personal income per capita $10. Baloch 2%. Total $818. and its reserves contain 20 percent of the world's total amount of natural gas.91 male(s)/female Total population: 1.

Add other mining-related industries and this figure increases to just four per cent (2005). and government control over all resources. excluding those in the lower ranks of the political apparatus of the state. 4. The working class: Workers who do not own the means of economic activity and do not benefit from the authority and autonomy of those in the middle class. D. 1. Minerals and resources Mining in Iran is under-developed. They exercise some authority and enjoy relative autonomy. copper (world's second largest). uranium (world's tenth largest) and lead (world's eleventh largest). Petty bourgeoisie: Self-employed persons who do not hire any paid worker but may rely on unpaid family labor. chemical minerals and salt. holding some 68 types of minerals. Many factors have contributed to this. ranked among 15 major mineral rich countries. in administrativemanagerial and professional-technical positions. 37 billion tones of proven reserves and more than 57 billion tones of potential reservoirs. metallic minerals. Other large deposits which mostly remain underdeveloped are zinc (world's largest). consist of modern and traditional categories. Mineral production contributes only 0. too. The most important mines in Iran include coal. The middle class: Employees of the state or the private sector. Surface transportation Transport in Iran is inexpensive because of the government's subsidization of the price of gasoline. sand and gravel. In this category are those who are employed in economic activities and social services of the state.6 per cent to the country‘s GDP. Iran with roughly 1% of the world's population holds more than 7% of the world's total mineral reserves. 3. namely lack of suitable infrastructure. Capitalists: Owners of physical and financial means of economic activities. legal barriers. exploration difficulties. Income classes 1. Distribution of wealth A Group of people within a society who possess the same socioeconomic status. iron (world's ninth largest). E. They are employees of the state or the private sector. Capitalists are divided into modern and traditional occupational categories. Khorana has the most operating mines in Iran. 2. who employ workers. Those employed in the administrative or managerial position in the political apparatus of the state are not included here. They. The downside is economic inefficiency because of highly wasteful consumption 21 . Yet the country is one of the most important mineral producers in the world.C.

Dozens of cities have airports that serve passenger and cargo planes. connects Bandar-Abbas to the railroad system of Central Asia via Tehran and Mashhad. Iran Air. accounting for 9% of GDP 1. Mashhad. contraband with neighboring countries and air pollution.  Other cities with plans to construct a metro: 22 . After arriving in Iran. of which 66% were paved.106 km o Standard gauge: 8. opened in 1995. All large cities have mass transit systems using buses. Shiraz. six other metro projects are being built. Tabriz. In 2008. more than one million people worked in the transportation sector.676 mm (5 ft 6 in) gauge (connected to Pakistan Railways) Electrified railway is 146 km from Tabriz to Jolfa and the tender for electrification of Tehran. imported goods are distributed throughout the country by trucks and freight trains. The Tehran-Bandar-Abbas railroad. In total. 172 extra kilometers will be built in Tehran between now and 2012 and over 380 kilometers in the other cities. Metro  City with underground railway system: o Tehran Metro Along with extension work on the Tehran Metro. The country‘s major port of entry is Bandar-Abbas on the Strait of Hormuz. 41 km of the standard gauge. In 2008 there were nearly 100 passenger cars for every 1. Note: Broad-gauge track is employed at the borders with Azerbaijan Republic and Turkmenistan which have 1. All these work sites are ongoing at present (2008). electrified track is in suburban service at Tehran (2007). was founded in 1962 and operates domestic and international flights.000 mi) of roads. Ahwaz and Esfahan are in the process of constructing underground mass transit rail lines.520 mm (4 ft 11 5⁄6 in) broad gauge rail systems. the national airline.152 km (111. Modes Iran has a long paved road system linking most of its towns and all of its cities. Tehran.Mashhad has been finished according to Railway electrification in Iran.000 inhabitants.273 km of 1. Trains operated on 11. Availability Railways  Total: 11.106 km (6.patterns. and several private companies provide bus service between cities. Other major ports include Bandar e-Anzali and Bandar e-Torkeman on the Caspian Sea and Khorramshahr and Bandar-e Emam Khomeyni on the Persian Gulf. In 2007 the country had 178.435 mm (4 ft 8 1⁄2 in) gauge (146 km electrified) (2006) o Broad gauge: 94 km of 1. 2.942 mi) of railroad track.

3 percent a year in the 2009-2013. were moved to the Imam Khomeini International Airport (IKIA).908 km (includes 1.019 km Waterways  850 km (on Karun River. Malta 79. additional service on Lake Uremia) (2006) Merchant marine      Total: 74 (2008) By type: bulk carrier 18. roll on/roll off 3 Foreign-owned: 1 (UAE 1) Registered in other countries: 115 (Barbados 2. Panama 7. chemical tanker 4. and Arak Airport in Markazi province has recently begun to operate international flights. cargo 34. In May 2007 international flights into the capital. Saint Vincent and the Grenadines 1) Shipping freight (important for liquid natural gas (LNG) exports) will grow by an average of 5. just outside the city because of capacity constraints at the existing central Mehrabad Airport. passenger/cargo 4. Iran would need 500 new ships. container 6. Bolivia 1. Airports and airlines Iran‘s airports are improving their international connections. 40 liquefied natural gas (LNG) carriers and over 300 commercial vessels. in addition to ten local airports.429 km of expressways) Unpaved: 47. Hong Kong 15. Over the next two decades. liquefied gas 1.510 domestic. refrigerated cargo 2.404 transit. Cyprus 10. 21 air border. 2008): 10. 4.927 km (2006) o o Paved: 125. Number of flights from airports nationwide reached 31.    Airports: 316 (2009) There are 54 "major" airports in Iran (2008): 8 international. and 25 domestic.o o o o o o Mashhad Light Rail Isfahan Metro Shiraz Metro Tabriz Metro Ahvaz Metro Karaj Metro Roadways and automobiles  Total: 172.088 in a month (October 20November 20. including 120 oil tankers. Tehran.229 international and 15. 23 . petroleum tanker 2. making a total of five such airports in the country.

The railway network expands by about 500 km per year according to the Ministry of R&T.5% of the passenger volume and 8.047 m: 1 1.with paved runways Total: 129 (2007)      over 3.National airline:  Iran Air Airports .523 m: 139 under 914 m: 33 (2009) Heliports Total: 19 (2009) 3.5% of the freight volume by rail.with unpaved runways Total: 183 (2007)     over 3. The government plans to transport 3.524 to 2.437 m: 25 914 to 1.437 m: 9 914 to 1. Extensive electrification is planned.438 to 3.047 m: 40 2.523 m: 34 under 914 m: 6 (2009) Airports .524 to 2. Usage rates The majority of transportation in Iran is road-based.047 m: 28 1. Also there were more than 11 million vehicles in Iran by 2010 mostly manufactured or assembled locally 24 .

Port capacity will increase to 200 million tons in 2015 from 150 million tons in 2010.2 billion and is expected to grow to $12. In 2000 there were 252 radios. Bandar-e Eman Khomeyni[6] Bandar Abbas is in southern Iran and handles 90% of the country's container throughput. F.     All ports: Abadan (largely destroyed in fighting during 1980-88 war). however. standing at 22 lines per 100 people.000 bbl/d (790. Assaluyeh 250. Iran's telecom market was the fourth-largest market in the region at $9.4 million which will increase to 7 million by the end of 2015.000 bbl/d (7. Fixed-line penetration in 2004 was relatively welldeveloped by regional standards.000. The government runs the broadcast media.000 m3/d). Chabahar (Bandar-e Beheshti).000 m3/d) gas liquids. Major Export Terminals (loading capacity): Kharg Island 5.4.000 m3/d). and 110 personal computers for every 1. Noshahr (Caspian sea). the Ministry of Posts and Telecommunications (renamed the Ministry of Information & Communication Technology) began selling Internet accounts to the general public. Sirri island. higher than Egypt with 14 and Saudi Arabia with 15.9 percent. Major Oil/Gas Ports: Kharg Island. Ports Ports and harbors The capacity of container loading and unloading in the country‘s ports is currently at 4. In 2006. Sirri Island. In 1998. Bandar-e Emam Khomeyni. dominated by the Telecommunication Company of Iran (TCI). Kish Island.000 bbl/d (32. Computers for home use became more affordable in the mid-1990s. which includes three national radio stations and two national television networks. Abadan and Bandar Mahshahr. Bandar-e Anzali (Caspian sea). Kharg island.900 m3/d). Neka 50. In terms of mobile provision in 2004. Communication systems Iran‘s telecommunications industry is almost entirely state-owned.000 bbl/d (40. Ras Bahregan. Main: Assaluyeh. Bandar-e Length.000 residents. Arvand Kenar. 158 television sets.9 billion by 2014 at a CAGR of 6. 25 . the Iranian telecom industry's revenues were estimated at $1. Lavan island. as well as dozens of local radio and television stations. Lavan Island. 219 telephone lines. Ahvaz. Bushehr. Bandar-e Torkaman (Caspian sea). Bandar-e Mahshahr. Bandar Abbas. By the end of 2009. although behind the UAE with 27. Iran lagged all the countries mentioned above. Bandar Abbas. and since then demand for access to the Internet has increased rapidly. Khorramshahr (limited operation since November 1992). Lavan Island 200.2 billion.

The Fourth Five Year Economic Development Plan has proposed the following key benchmarks for 2010: 36 million fixed lines; 50% penetration rate for mobile phones; establishment of reliable rural ICT connections and 30 million internet users. Given the recent developments of the industry, the objectives are very likely to be achieved. More than 23 million Iranians have access to the Internet and over 45 million own mobile phones. Tech-savvy citizens use text messages to communicate with friends and browse the Internet — which the government controls in terms of access and speed — for a multiplicity of purposes. Blogging is also immensely popular. Iran is among 5 countries with cyber warfare capabilities according to the Defense Tech institute (US military and security institute). 1. Types, 2.Availability and 3.Usage rates

The press in Iran is privately owned and reflects a diversity of political and social views. A special court has authority to monitor the print media and may suspend publication or revoke the licenses of papers or journals that a jury finds guilty of publishing antireligious material, slander, or information detrimental to the national interest. Since the late 1990s the court has shut down many pro-reform newspapers and other periodicals. Most Iranian newspapers are published in Persian, but newspapers in English and other languages also exist. The most widely circulated periodicals are based in Tehran. Popular daily and weekly newspapers include Ettelaat, Kayhan, Resalat, Iran Daily and the Tehran Times (both are English-language papers).

Since the 1970s, there have been a number of proposals for a state-owned communications satellite, called Zohreh (en:Venus) from 1993 onwards. The planned satellite would have similar capabilities to a commercially-produced Western satellite, while such capabilities are already provided through leases owned by the Iranian telecommunications sector. Most recently, an agreement was signed between Iran and Russia in 2005 to develop the satellite with a planned launch date of 2007,but the launch has been postponed until at least 2009, set to follow actual construction of the satellite.

Inadequate but currently being modernized and expanded with the goal of not only improving the efficiency and increasing the volume of the urban service but also bringing telephone service to several thousand villages, not presently connected.

As a result of heavy investing in the telephone system since 1994, thousands of mobile cellular subscribers are being served; moreover, the technical level of the system has been raised by the installation of thousands of digital switches.


Iran‘s telecommunication network enjoys the highest growth rate in the Middle East. One of the indicators that clearly illustrate this growth rate is the increase in the number of installed main lines. In 1978 there were only about 850,000 fixed lines installed in Iran. This number rose to about 1,767,000 by 1986 and to about 2,380,000 by 1989. One of the objectives of the first fiveyear development plan (1989–1994) for the telecommunication sector was to add one million new fixed lines to the network. However, due to the establishment and expansion of many lowcapacity and high-capacity exchanges, the actual growth rate that was achieved was considerably higher. In fact more than 3.1 million new main lines were installed during the period of the first five-year plan. Four million new lines were expected to be added by the end of the second five-year plan (1994–1999), which would increase the number of installed main lines to about 9,510,000 fixed lines. Landlines 24.8 million (2008), with a penetration rate of 34%. Mobile phone
   

Mobile: 41 million (Nov. 2008) from 35 million (early 2008) and 4.3 million in 2004. Penetration rate: 60% as of January 2009. Projected: over 80% in 2012. Short Text Messages: Iranians send 80 million SMS per day (Nov. 2008). Major mobile operators as of 2008: Telecommunication Company of Iran (MCI/Hamrah Aval) with 70% market share, MTN Irancell (28%), Taliya (1%), and Emirates Telecommunications Corp (Etisalat) who won a license for 300 million Euros in December 2008.[19][21][22] The two national operators, Mobile Company of Iran (MCI) and MTN Irancell both offer GPRS-based data services. Abu Dhabi-based Etisalat and Tamin Telecom, the telecommunications investment arm of Iran‘s social security and pensions department, will gain exclusive rights for two years to offer second- and third-generation services (3G) in Iran (2008). Assuming a minimum network investment of $4 billion, Etisalat can gain about 20 percent to 25% market share over five years of its operations (by 2013). In 2009 it was announced that Etisalat, however, failed to secure the right to be Iran‘s exclusive 3G operator for two years. Later, Tamin Telecom announced that, IDRO and Imam Khomeini Decree Center have replaced Etisalat because of contractual disagreements.


As of 2010, international connection services are provided exclusively by Infrastructure Company of Iran, a fully owned subsidiary of TCI.[20] Submarine fiber-optic cable to UAE with access to Fiber-Optic Link Around the Globe (FLAG); Trans Asia Europe (TAE) fiber-optic line runs from Azerbaijan through the northern portion of Iran to Turkmenistan with expansion to Georgia and Azerbaijan; HF radio and microwave radio relay to Turkey, Azerbaijan, Pakistan, Afghanistan, Turkmenistan, Syria, Kuwait, Tajikistan, and Uzbekistan; satellite earth stations - 13 (9 Intelsat and 4 Inmarsat) . Apart from Iran-Kuwait submarine communications cable network, Iran is launching an optical fiber channel and a submarine communications cable in the Persian Gulf. The 27

next program is to connect the country with global optical fiber networks from northern and northwestern borders.

 

Radio broadcast stations: AM 72, FM 5, shortwave 5 (1998) Number of Radios: 22 million (2005)

  

Television broadcast stations: 29 (plus 450 repeaters) (1997 Number of televisions: 15 million (2007 est.) Although formally illegal, the use of satellite television receivers in urban areas is widespread. Over 30 percent of Iranians watch satellite channels.

In 1993 Iran became the second country in the Middle East to be connected to the Internet, and since then the government has made significant efforts to improve the nation's ICT infrastructure. Iran's national Internet connectivity infrastructure is based on two major networks: the public switched telephone network (PSTN) and the public data network. The PSTN provides a connection for end-users to Internet service providers (ISPs) over mostly digital lines and supports modem-based connections. The Data Communication Company of Iran (DCI), a subsidiary of TCI, operates the public data network. Iran's external Internet links use the basic Internet protocol of TCP/IP (transmission control protocol/Internet protocol) via satellite exclusively. For data lines, copper, fiber, satellite and microwave are the available media, and popular services are high-speed Internet via digital subscriber lines (DSL), high-bandwidth lease lines and satellite. About 33 Iranian cities are connected directly by the Trans-Asia-Europe cable network, or "silk road", connecting China to Europe.

National internet
Since 2005, Iran has been developing a "national Internet" to improve control over its content as well as speed. The project, which is separate from the world wide web, will be completed by 2013. This network will be separated from the rest of the internet, specifically for domestic use. Creating such a network, similar to one used by North Korea, would prevent unwanted information from outside of Iran getting into the closed system. Myanmar and Cuba also use similar systems.

The leading Data Communication Company of Iran (DCI) which belongs to Telecommunication Company of Iran (now privatized) and the Iranian Research Organization for Science and Technology (IROST) are two bodies that act as ISPs. The largest privately owned ISP is Parsnet, which serves only Tehran. The leading ISP with a 28

providing Internet access via the IRANPAK X. the ISPs have recently been provided with modern data line capacity through a national IP-based network. The Labor Law provides a very broad and inclusive definition of the individuals it covers.636 per year). G. The comprehensive Labor Law covers all labor relations in Iran. Guild unions operate locally in most areas but are limited largely to issuing credentials and licenses. in theory.provincial focus is Isfahan-based Irangate. 1. and written. Membership in the social security system for all employees is compulsory. as is 29 . Working conditions The highly fluid nature of Iran's labor market and the large size of the informal services sector make accurate estimates of employment levels difficult. DCI maintains the network infrastructure. 2008 was $9. DCI supplies both dial-up and leased lines to its users. Employee participation Although Iranian workers have. Employing personnel on consecutive six-month contracts is illegal.612 per year and the national average was $4. Internet services in Iran are expected to improve dramatically. With the completion of this new network. these ISPs should rely on the Telecommunication Company of Iran (TCI) for their bandwidth. was about US$303 per month (US$3. DCI is the only ISP with a permit for supplying government agencies. no union system in the country. there is. Workers are represented ostensibly by the Workers' House. including hiring of local and foreign staff. determined by the Supreme Labor Council. In 2010 the minimum wage. By the regulations of Iran. a right to form labor unions. The Neda Rayaneh Institute (NRI) was the first private ISP in" suffix are assigned by the Institute for Studies in Theoretical Physics and Mathematics (IPM). in actuality. Previously serviced by TCI‘s Public Switch Telephone Network. Employer-employee relations There is a minimum national wage applicable to each sector of activity fixed by the Supreme Labor Council which is revised annually. which covers most major cities. The right of workers to strike is generally not respected by the state.25 packet-switching network. Domain names with the ". The national poverty line for Tehran in the year ending March 20. The Iranian Labor Law is very employee-friendly and makes it extremely difficult to lay off staff. and since 1979 strikes have often been met by police action. temporary and indefinite employment contracts are all recognized. 2. a state-sponsored institution that nevertheless attempts to challenge some state policies.

Foreign investment Firms from over 50 countries have invested in Iran in the past 16 years (1992-2008). communications. and family-owned enterprises) are exempted. cement and other construction materials. Ratio of private to publicly owned industries The constitution mandates that all large-scale industries. Principal industries petroleum. followed by industry (mining and manufacturing) and agriculture. textiles. with Asia and Europe receiving the largest share 30 .3 billion. insurance. but large sectors of the economy (including small businesses. minerals. aviation. including petroleum. caustic soda. foreign exchange. petrochemicals. power generation. What proportion of the GNP does each industry contribute? Oil exports account for nearly 80 percent of foreign exchange earnings. or $5. In the early 21st century the service sector constituted the largest percentage of gross domestic product (GDP). The minimum age for workers in Iran is 15 years.dismissing staff without proof of a serious offense. H. I. ferrous and non-ferrous metal fabrication. be owned publicly and administered by the state.470 per capita 2. In 2008 GDP was estimated at $382. food processing (particularly sugar refining and vegetable oil production). The Labor Law provides the minimum standards an employer must adhere to when forming an employment relationship. fertilizers. which usually rules in favor of the employee. Labor disputes are settled by a special labor council. Basic foodstuffs and energy costs are heavily subsidized by the government. banking. agricultural concerns. and road and rail transport. armaments 1.

Following the end of the Iran-Iraq war in 1988. is not considered foreign direct investment. Tenders are strictly required for government contracts for purchasing or projects. Currently there are three main routes that a foreign company can follow to establish a long-term presence in Iran: Joint ventures The Flower of the East Marina. Industry and long-term strategy for the Iranian market. In August 2010. One possible strategy is for the foreign company to enter into a joint-venture agreement with a public or private Iranian partner. Buy-back In February 2007 the government unveiled its new buyback-contract formula. The buy-back scheme is a formula used by the Iranian government to attract foreign investment. These are rarely competitive. Iran will almost never honor the interests of a company that does not show long-term commitment. see the document titled "Establishing a Joint Stock Company in Iran". If a joint-venture company can earn hard currency through export of its goods. IT and the export of goods and services are the sectors authorized to enjoy the new facilities from the Foreign Exchange Reserve Account There are seven types of juridical entity or company which can be established under the Iranian Commercial Code. by itself. this path can prove very constructive. it is crucial to realize that Iranian authorities insist on a long-term commitment and a transfer of technology as a requisite for getting a share in the market. agriculture. Opportunities? Potential approaches to the market First and foremost. Others are looking for a revival of their company through foreign capital. Since Iranian authorities are very keen on the introduction of modern technologies. Many Iranian companies. in which the capital is divided by shares. The existing level of technology and infrastructure makes many Iranian companies suitable for expansion and development in conjunction with foreign companies. a multi-billion dollar FDI project in the tourism sector in Iran. which significantly extended the length of the contracts to as long as 20 years. especially those in the private sector. yet its revolutionary ideology and 31 . Should a company decide to adopt this approach to the market. opening a representative office in Iran. From among all these different types. are currently actively seeking joint-venture partners both to fill their technological as well as management gaps. Joint Stock Company. It should be noted that some joint ventures consist purely of the transfer of technology to Iran by the foreign partner without any capital commitment. is the most common and acceptable type of company which can be recommended to foreign investors. the 25% ceiling set for joint venture companies in enjoying facilities from the foreign exchange reserve account has been eliminated. Iran faced a major problem: it needed foreign investment if it did not want to lose its vital income from the oil and gas industry. Breaking up contracts into smaller parts is a common practice to try and incorporate at least 30% of the contract's value in local capability and also to negotiate on specific prices. services (such as tourism).1. transport. Further information. Foreign companies are therefore advised to adopt a medium. it is advisable to look for products and services that have both domestic demand as well as regional export potential. it will not be too dependent on the Iranian banking system for the repatriation of profits and dividends. For legal and tax purposes.

The figure exceeded US$8.Constitution forbid granting ―concessions‖. attracting $874. No entry visa requirement. tobacco. Put in laymen terms. In this scheme. electricity and gas sector ranked second. leather. 2. transportation and mines reached $193 million. Locations As of January 2010. telecommunication.83 million. in exchange for the goods that will be produced directly or indirectly by means of such facilities. more appropriate laws and regulations will probably replace the buy-back scheme. once the constitutional concerns have been dealt with. Extended legal guarantees & protection. Social and Cultural Development Plan. In the medium to long term. Flexible employment regulations. Which industries? As of 2007. While many foreign companies believe that this method is a mere financing instrument for Iran. Asian entrepreneurs made the largest investments in the Islamic state by investing in 40 out of 80 projects funded by foreigners. the foreign partner that makes the initial investment can repatriate the return on the investment (at a pre-agreed fixed rate) through goods and services produced by the project. Asian countries invested $7. textiles. or they can enter into a joint venture with an Iranian partner. production and investment.[29] More FTZ and SEZ are planned in Iran. Free trade zones and special economic zones Advantages Free-trade (FTZ) and special economic zones (SEZ) have been established to provide additional investment incentives such as: 15 years tax-exemption. Further information: Buy-backs in Iran's oil industry Build-Operate-Transfer (BOT) Recent regulations have introduced the Build-Operate-Transfer (BOT) scheme for Iranian projects. 100% foreign ownership possible. production equipment and technology is supplied (by a domestic or foreign private firm). In the third place. Flexible monetary & banking services. clothing. it is more accurate to say that it is a compromise formula for foreign investment in the short-run.2 million respectively.666 billion in various projects followed by several multinational 32 . including food and beverage. which is then operated for a certain period of time by the foreign investor before it is fully transferred to the Iranian government. Under Note 29 of the said plan.3 million and $14. the foreign partners of buy-back agreements can take over the projects that they are involved in. Water. the Iranian government is allowed to employ ―buybacks‖ in its effort to meet the industrial and mineral needs in connection with exports. In other words. chemical. which could potentially pave the way for more foreign investment in the market. The largest amount of foreign investment was in the industrial sector. the foreign partner invests in one project. there were six free trade zones (FTZ) and 16 special economic zones (SEZ) in Iran. a buy-back transaction is a method of trade where plants. Iranian authorities are showing some flexibility regarding the BOT. machinery. This is a rather new possibility in the Iranian market. steel and oil derivates. Investments in service. $14.76 billion. A compromise solution was found in 1989 with the First Five-Year Economic. Under this scheme. the real estate sector absorbed more than $406 million.

International trade statistics 1. Major exports Petroleum 80%. Investments by these multinational companies exceeded $1.2 billion in the Islamic Republic.) 2.97 billion (2010 est.consortia.31 billion (2010 est.329 million in the country.) 33 . Dollar value $58. carpets a. foodstuffs and other consumer goods. technical services a. capital goods. Dollar value $84. Although European entrepreneurs were involved in 34 projects. J. fruits and nuts. while investments by African states registered close to $4 million. American countries also committed $12. Major imports Industrial supplies.39 billion (in four projects). chemical and petrochemical products. they invested only in the range of $1.

Balance-of-payments situation a. Surplus or deficit? Surplus 34 .3.

5 (2007) 9.142.S.2 (2010) 9. the central bank introduced a currency certificate system allowing exporters to trade certificates for hard currency on the Tehran Stock Exchange. hence creating an unequal competition environment.8 (2008) 9. in order to ease pressure on exporters.308.864. a. 000:US$1) in March 2000. the multi-tiered system was replaced by a unified. where state and Para-state enterprises benefited from the "preferred or official rate" (1750 rial for $1) while the private sector had to pay the "market rate" (8000 rial for $1). The "official rate" of the Iranian rial—1. market-driven exchange rate. and repayment of external debt. This method finally replaced the fixed "export rate" (IR3.752:US$1) was abolished. Current rate of exchange Iranian rials (IRR) per US dollar 10. Iran‘s exchange rate system was based on a multi-layered system. imports of essential goods and services. dollar—applied to oil and gas export receipts. In 1998. Single or multiple exchange rates? Market-driven exchange rate b.500:US$1.750 per U.227. The "export rate".4. and has since held steady at some IR8. thus creating a floating value for the rial known as the "TSE rate" or "market rate". and the TSE rate became the basis for the new unified foreign-exchange regime. Exchange rates Until 2002.407.3 (2009) 9. but mainly to capital goods imports of public enterprises. In March 2002. In 2002 the "official rate" a/k/a as the "preferred rate" (IR1. applied to all other trade transactions.1 (2006) 35 .000 rials per dollar since May 1995. fixed at 3.

36 . state trading. arbitrary changes in tariff and tax schedules and weak enforcement of intellectual property rights add to the cost of trade. burdensome customs procedures.K. asset freezes against listed individuals and entities and a prohibition of making economic resources available to them (including by the supply of goods and services which may be used to obtain funds) restrictions on transfers of funds to and from Iran. and restrictions on Iran's access to the insurance and bond markets restrictions on providing certain services on Iranian ships and cargo aircraft 3. Imports tax Import restrictions    Permitted items no longer require specific approval from the Ministry of Commerce.1 percent in 2008. Authorization from one or several Ministries is required for the import of various specified items. the refining of fuels or the liquefaction of natural gas. or obligations arising from. Regulations favoring local production have been enacted where possible. Import bans and restrictions. export licensing requirements. prohibitions on investment in Iranian entities engaged in manufacturing those items Prohibitions on investment in Iranian entities or bodies engaged in the exploration or production of crude oil and natural gas. contracts that were in place before 27 October 2010) an arms embargo and a prohibition on the supply of equipment that could be used for human rights abuses prohibitions on the provision of brokering services and technical and financial assistance related to any goods and technology whose supply is prohibited. Trade restrictions Iran‘s weighted average tariff rate was 20. supply. high tariffs. The import of luxury or non-essential products and services are restricted. Embargoes & sanctions        prohibitions on the sale. restrictive sanitary and tough regulations. There are extensive trade and financial sanctions in place against Iran as a result of the USA's foreign policy commitments and the imposition of European Union (EU) and United Nations (UN) sanctions and embargoes. These include: 1. transfer or export of key equipment and technology for the oil and gas industry (with a limited exemption for transactions required by. Fifteen points were deducted from Iran‘s trade freedom score to account for non-tariff barriers.

wheat and other strategic goods are exempt from duties. Earnings resulting from the transit of commodities through Iran are fully exempt from taxation provided that the commodities in question do not undergo any modification. Exchange control authority is vested in the Central Bank (Bank Markazi). Goods exported to Iran must be subject to invoices authenticated by the Iranian Embassy and by a nominated Chamber of Commerce operating in the supplier's country. most imports are subject not only to licensing fees and tariffs.000 must undergo pre-shipment quantity and quality inspection in their country of origin by an internationally recognized inspection organization. Imports of cigarettes.    All foreign suppliers of equipment and machinery must have official representation in Iran. Ministry of Health for 37 - . However. cigarette tips and silkworm eggs are subject to government monopoly. Imports to Iran valued at more than IR500. 4. Survey and certification must take place prior to consignment in the country of origin. including details of general import licenses requiring the approval of relevant Ministries (eg. cigarette paper. but also to local taxes. A General Guide on Iranian Customs/Tariff Information. Tariffs Customs duties and Tariffs on most imported goods:   Capital goods and raw materials imported for foreign investments may be exempted from normal duties. similarly medicines. cigars. tobacco. All foreign exchange transactions must take place through the Central Bank or authorized banks. Following is an indicative listing of tariff rates:             - chemical products – 10 percent ordinary metals –10 percent measurement instruments –10 percent medical equipment – 10 percent food industry – 15 percent mining raw production – 15 percent leather industry – 15 percent paper and wood fabrics – 15 percent mechanical machinery – 15 percent agricultural raw production – 25 percent electric machinery – 25 percent automotive vehicles – 100 percent Wheat and other strategic goods are exempt from duties.

working conditions.350 2010 25. and legal contracts from their employer. L. This section of the working class benefits from its position as ―formal‖ labor. often located within nationalized (or formerly nationalized) industry.360 2008 28.680 2007 24. has a small formal labor force. Many have to leave their jobs due to low wages. 1. Size ( in thousands) Country Iran 2000 15.700 Labor force by occupation: - Agriculture: 25% Industry: 31% Services: 45% (June 2007) Women workers in Iran suffer discrimination in the workplace.000 2003 21.020 2011 25.700 2009 24. who is often the state. Mahmoud Ahmadinejad‘s administration has put forth proposals to reduce the work hours for female workers to 36 hours per week. which will only increase their hardships. 38 .300 2002 18. they bear the main brunt of unemployment and layoffs. while Iranian women make up 27% of the workforce.320 2005 23.000 2006 23.pharmaceuticals) is also available on online for reference purposes. meaning that these workers have been able to extract better pay and benefits. unsuitable job conditions (there are no legal protections for women). violence. Labor force  Iran. Recently. According to the official statistics. like many middle-income countries. The Iranian importer is responsible for arranging the appropriate license approval.400 2001 17.000 2004 22.

) Inflation (2011): - 10. it had picked up by the second half of 2010.) IV. despite international sanctions in almost all aspects of research during the past 30 years.3% (2011 est.5% (2009 est. averaging 14. 16.3% (2008 est.) 10. electricity.Inflation rates   Inflation is very high.) 13. and wheat.) 11. 30% 7% by 2015. - Developments in science and technology Iran is an example of a country that has made considerable advances through education and training. water.8% according to government. The government controls the prices of petroleum products. jobs each year M. Unemployment rates Unemployment rate 2011 - 11. Fifteen points were deducted from Iran‘s monetary freedom score to account for measures that distort domestic prices. Iran's scientific community remains productive.8% 2011 14. Although the inflation rate decelerated in 2009. and influences prices through regulation of Iran‘s many state-owned enterprises. 39 . by creating 1 million new according to opposition.1% (2010 est.7 percent between 2007 and 2009.6% (2010 est.2. unofficially: 12–22%. provides economic subsidies. even while economic sanctions make it difficult for universities to buy equipment or to send people to the United States to attend scientific meetings.

) Technology parks The government of Iran has also plans for the establishment of 50-60 parks by the end of the fifth Five-Year Socioeconomic Development Plan by 2015.[46] Advanced Engineering (mechanics and automation). ICT. Automation. 25 km NorthBiotechnology. Currently Iran aims for a national goal of self sustainment in all scientific arenas. tools. etc. Khorasan Materials and Metallurgy. Guilan Park Environment. as one of the root causes of political and military bullying by developed countries over undeveloped states. Current technology available (computers. Electronics. Services. After the Iranian Revolution. ICT. A.[46] Tehran Pardis Technology Park Tehran Software and Information ICT[48] Technology Park (planned)[47] Khorasan Science and Technology Advanced Engineering. Electronics. Agro-Food. machinery. Information and Sheikh Bahai Technology Park Communications Technology.000 pages of documents and includes 224 scientific projects which must be implemented by the year 2025. Chemistry.[46] Research and Technology) Chemistry. Design & (Aka "Isfahan Science and Isfahan Manufacturing. Park's name Focus area Location Guilan Science and Technology Agro-Food. there have been efforts by the religious scholars to assimilate Islam with modern science and this is seen by some as the reason behind the recent successes of Iran to augment its scientific output. ICT. Tourism. Biotechnology. Biotechnology. Electronics. Chemistry. Technology Town") Services. Park (Ministry of Science.- Furthermore.[46] Semnan Park Province Technology Semnan East Azerbaijan East Azerbaijan Technology Park Province 40 . Iran considers scientific backwardness. NanoEast of Tehran technology. The Comprehensive Scientific Plan has been devised based on about 51.

Iranian government formulated a 15 year comprehensive national plan for science focused on higher education and strengthening the links between academia and industry in order to promote a knowledge based economy.Yazd Province Technology Park Markazi Park Province Technology Yazd Arak B. Iranian government wiped out the financial debts of all universities in a bid to relieve their budget constraints. biotechnology. depending on the Ministry of Science. The share of private businesses in total national R&D funding according to the same report is very low being just 14% as compared with the Turkey's 48%. As per the plan by year 2030. Iran allocated around 0.4%.49% 41 .4% of its GDP to R&D. in charge of establishing research policies at the state level.5% to be reached by 2015. which ranked it "far behind industrialized societies" and the world average of 1. Research and Technology.87% and the set target is 2. According to UNESCO science report 2010. Iran's research and development spending is to be increased to 4% of GDP from 0. Percentage of GNP invested in research and development - - - - - Iran's national science budget was about $900 million in 2005 and it had not been subject to any significant increase for the previous 15 years. The rest of approximately 11% of funding comes from higher education sector and non-profit organizations. By early 2000. In 2006. Iranian Research Organization for Science and Technology and the National Research Institute for Science Policy are two of the main institutions. stem cell research and information technology (2008). In 2009.59% of 2006 and increasing its education spending to over 7% of GDP from the 2007 level of 5. Iran's government has devoted huge amounts of funds for research on high technologies such as nanotechnology.By 2009 this ratio of research to GDP reached 0. most of the research in Iran is government funded with the Iranian government providing almost 75% of all research funding.

identifying a reliable distributor or wholesaler with a strong business network within the country is always the best strategic move for overseas companies. many of which are stationed in Dubai. 42 .V. Channels of distribution (macro analysis) To tap into the Iranian market. Understanding the distribution channels of Iran will help you understand what will happen after selling your goods to Iranian distributors or wholesalers.

investors have been attracted to retailing and the growth in number of outlets has continued. In recent years. as a result of a recession in other economic sectors such as agriculture and industry. The emergence of any multinational retailers will further drive growth.A. 1. the Friday bazaar or Saturday bazaar. Iranians are used to going to a variety of outlets to do their weekly shopping. despite the existence of hypermarkets. Consequently. for example. as a result of a recession in other economic sectors such as agriculture and industry. the weekly bazaar offers a wide range of goods. On the other hand. In recent years. investors have been attracted to retailing and the growth in number of outlets has continued. especially in recent years. home appliances and handicrafts. These are especially popular in cities other than Tehran where the number of hypermarkets and supermarkets is still very limited. including food. This traditional distribution network is very ineffective and usually culminates in several mark-ups on price before products reach the consumer. and independent retailers operating in bazaars. led to impressive growth in disposable income. Iran has an extremely high number of outlets for both grocery and non-grocery retailers. there are also numerous weekly bazaars. - Typical size of retail outlets In the traditional Iranian retailing environment small and independent players remain dominant. growth will continue to be inhibited by the government‘s policies regarding foreign investment and privatization. which peaked in 2008. Apart from permanent bazaars. 43 . To fill this massive demand the Iranian market was flooded with foreign goods and the total value of imports to Iran increased exponentially.478 small grocery retailers. Most of the imports. - Number of retailers - Iran's retail industry consists largely of cooperatives (many of them governmentsponsored). Operating in an open space. 2. This is largely because. The bulk of food sales occur at street markets with prices set by the Chief Statistics Bureau. the price of a single product may vary from region to region as small independent retailers attempt to boost their profits. Retailers - - - With few major chain stores and only one multinational retailer the Iranian retailing spectrum is full of independent outlets that are connected to the main bazaar of Tehran. A sudden increase in oil prices. Iran has 438. were consumer products – which was a reason for the increase in number of outlets.

- More mini-markets and supermarkets are emerging. B. Some importers and distributors from those cities have begun to buy goods directly from Dubai or other overseas countries. one of the biggest supermarket chains in Turkey. On the other hand. and specialty shops - . Migros Turk. the capital city of Iran. The biggest chain stores are state-owned Etka. independently owned operations. Role of chain stores.The store formats with the greatest growth in terms of consumer preference were hypermarkets and supermarkets due to the wide variety of products on offer. However. For example. is the distribution hub of goods for the country. Shahrvand and Hyper star Market 3. Accounting for one-tenth of the country’s population and almost one-third of Iran’s total consumer expenditure. but these are mostly one-off. department stores. Western-style supermarkets are also becoming common. Meanwhile. opened Iran‘s first modern hypermarket under the name of Hyperstar.   44 . goods may no longer need to be sent to Tehran before being distributed nationwide. largely dominated by single-outlet operations featured in the largest retailing formats including clothing and footwear specialist retailers and leisure and personal goods retailers. many westernstyle retail shops are indeed operated by local companies or the government. The concept of chain stores for non-grocery retailers still is not well grasped in Iran. such as Mashhad. non-grocery retailing is highly fragmented. Carrefour. partnering with the Makid Al Futtaim group. Some overseas retailers are also tempted by Iran‘s growing market. rather than from wholesalers within the country. more convenient shopping and a more comfortable shopping environment attract a lot of midto-high income earners to buy from western-style retailers. Wholesale middlemen writing guide -  Tehran. are emerging. . In other words. Tehran is the most important wholesale hub and retail market in Iran. Refah. the retail markets of other major cities in the country. Better product quality.Grocery retailing in Iran also entered a new phase of development as the multinational giants started activities in the country. also expressed interest in investing in Iran‘s retail market.

45 . and fresh and dried fruits. Kurdistan and Baluchistan are permitted to broadcast some programs in Azeri Turkish. the criteria for being anti-Islamic have been broadly interpreted to encompass all materials that include an antigovernment sentiment. Import/export agents   Oil and gas exports are Iran’s most important export. industrial raw materials and intermediate goods used as manufacturing inputs. All the papers and magazines in circulation supported the basic political institutions of the Islamic Republic. and other consumer goods. Top destinations for Iran’s non-oil exports are the United Arab Emirates (UAE). The publisher of every newspaper and periodical is required by law to have a valid publishing license. Penetration of urban and rural markets - Urban population: 71% of total population (2010) Rate of urbanization: 1. carpets. and India.9% annual rate of change (2010-15 est.C. Major imports for Iran include gasoline and other refined petroleum products.) Rural population: 29 % of total population (2010) VI. D. E. Information in Iran is largely controlled by the state. Iraq. Kurdish and Baluchi. Media - - - - The Constitution provides for freedom of the press as long as published material accords with Islamic principles. food products. Stations in Azerbaijan. China. In practice. Television and radio stations exist in Tehran and the major provincial cities. All radio and television broadcasting is controlled by the government. Any publication perceived as being anti-Islamic is not granted a publication license. Japan. Warehousing More than 30 warehousing in Iran. capital goods. Other major export commodities are petrochemicals.

from conservative and religious to secular and reformist. sites are often blocked by Iranian censors and penalties for reading or posting to unapproved blogs can be severe. When initially introduced. Face book. While Iran's reformist (or liberal) news outlets have suffered funding cuts and closures. since 2000. is riddled with contradictions. Media blogs and social networking sites like Twitter. which cited state-sanctioned blocking of websites and the widespread intimidation and jailing of bloggers. Costs 1.A. Iran experienced a great surge in Internet usage. and. - - - B. Harvard's Berkman Center for Internet & Society estimates there are as many as sixty thousand Persian-language blogs (PDF) that are regularly updated. In the first decade of the 21st century. serving up a diverse mix of views. Many users saw the Internet as an easy way to get around Iran's strict press laws. like many aspects of the theocratic regime. after Israel. Iran's leaders have oscillated between tightening and loosening restrictions on the country's domestic news media. While roughly one-third of Iranians have access to the Internet. The flow of information into and within Iran has improved over the last decade. currently has the second highest percentage of its population online in the Middle East. with 20 million people on the Internet. the Internet services provided by the government within Iran were comparatively open. Television & Radio 46 . Iran was among 13 countries branded "enemies of the internet" the human rights group. and YouTube became vital sources of information inside and outside Iran during the 2009 election crisis. conservative newspapers now frequently criticize government policies. Availability of media - Yet Iran's media landscape. But journalism experts caution that so-called new media cannot replace traditional forms of reporting. Reporters without Borders.

outdoor.  Reformist papers include E'temaad (Trust). and so it is the same in Iran. Resalat. The most widely circulated periodicals are based in Tehran. which is published by the Islamic Republic of Iran Broadcasting organization. The restrictions on certain goods considered un-Islamic didn‘t have any space on the state owned media could easily be viewed on the overseas advertisement 47 .  Iran Daily and Tehran Times are both English language papers. Iran's constitution mandates complete control over television and radio broadcasting. Most Iranian newspapers are published in Persian. and organizational heads are appointed by the supreme leader.  The Iranian government also publishes three English-language papers. Tehran Times. Islamic Republic of Iran Broadcasting (IRIB) controls all internal and external broadcasting.- Television is very popular in Iran. etc.The most widely circulated conservative papers include Kayhan. 4.000). there are no private or independent broadcasters inside Iran. these papers are typically funded by and ideologically connected to political parties or politicians (newspapers also receive government subsidies and generate ad revenue). Print Newspapers:  There are as many as three hundred newspapers in Iran. published in Tehran and licensed to the Majlis deputy from Rasht. Like their weekly cousins. which is owned by Supreme Leader Ali Khamenei. Iran News. but only a dozen major national dailies. Elias Hazrati. the nation's largest non-sports daily (450. and Jaam-e Jam. Jomhouri Eslami (The Islamic Republic). Iran is a very literate and highly educated society and with education comes certain sophistication. but newspapers in English and other languages also exist. the right-wing official government paper. and Etemad-eMeli. and is also streamed online. Iran Daily. 2. a national daily owned by 2009 presidential candidate Mehdi Karroubi. The advertising media with their wares have always been able to attract their attention. State-controlled television airs nationally and internationally. Iran. closely connected with Iran's Bazaar merchants.) Advertising media normally is in a major way connected to commerce and commerce even in a closed state is needed. whose first license holder was Ayatollah Khamenei.    Other media (cinema.

VII. the start of the program was delayed repeatedly throughout 2010 over fears of public reaction to higher prices. http://en. Executive summary Iran's economy is marked by an inefficient state sector. undermining the potential for private-sector-led growth.heritage.cia. Private sector activity is typically limited to small-scale workshops. and other rigidities weigh down the http://www. The recovery of world oil prices in the last year increased Iran's oil export revenue by at least $10 billion over 2009. reliance on the oil sector.wikipedia.over three to five years and replace them with cash payments to Iran's lower classes. Sources of information https://www. Significant informal market activity flourishes. particularly on food and energy. subsidies. Price controls. The internet and Satellite TV. and services. easing some of the financial impact of the newest round of international sanctions. and statist policies. which provides the majority of government revenues.html http://www. resulting in a significant "brain drain" VIII. This is the most extensive economic reform since the government implemented gasoline rationing in Underemployment among Iran's educated youth has convinced many to seek jobs overseas. The bill would phase out subsidies which benefit Iran's upper and middle classes the most .htm IX. The legislature in late 2009 passed President Mahmud AHMADI-NEJAD's bill to reduce subsidies. Although inflation has fallen substantially since the http://www. which create major distortions throughout the which has been banned for more than a decade has brought all forms of ware to people of Iran. However.hktdc. Iran continues to suffer from double-digit unemployment and Appendixes 48 .

)[2] (PPP. 94th)[5] 49 .355 billion (2010 est.)[4] GDP per capita $11. 17th) $407.)[3] (nominal.382 billion (2010 est.).2% (real growth. 26th) GDP growth 3. GECF. (PPP.420 (2010 est. WTO (observer) and others Statistics GDP $888.Economy of Iran Central Bank of Iran Rank 18th (PPP)[1] Currency 1 toman (superunit) = 10 Iranian rial (IRR) ( ) = 1000 dinar Fiscal year 21 March – 20 March Trade organizations ECO. 2011 est. OPEC.

telecom.7% living below $11/day (2006)[9] 3. car manufacture.1% living below $2/day (2006)[10] Gini index 0. industry (41.o.5% according to the Iranian government (2011 est. home appliances.) Inflation (CPI) 16. Export goods petroleum (80%). services (47. power.)[12] Main industries petroleum.)[8] Population below poverty line 18. carpets (1%).).7%) (2008 est. caustic soda.3%. textiles. fertilizers.3% (2011 est.4%) (10. South Korea 7.36 (2009 est. petrochemicals.31 billion (2010 est. energy. cement and other construction materials.5%. cars (2%). note: shortage of skilled labor Unemployment 11. construction.3%) (23. India 13. pharmaceuticals.3%) (2010 est.) f. food processing (particularly sugar refining and vegetable oil production).b. fruits and nuts (2%).1%.)[11] Labor force 25.9%) (34. chemical and petrochemical products (4%). Japan 11. armaments Ease of Doing 129th (2011)[13] Business Rank External Exports $84.6%) Imports of goods/services (−19.GDP by sector agriculture (11%). ferrous and non-ferrous metal fabrication. electronics. technical services Main export China 16.) GDP by component Private Government Gross Exports fixed of consumption consumption investment goods/services [6][7] (36.7%). Turkey 50 .7 million (2010 est.1%.

3%. not PPP)[14] Expenses $89. technical services Main partners import UAE 15%.5%. foodstuffs and other consumer goods (19%). Russia 5. China 14. capital goods (35%).2%. South Korea 7.) f. Italy 5. 2010) Gross external debt $14.) (on exchange rate basis) Economic aid $121 million (2008 est.b.7%.1 World Rank: 171 51 .075 billion (68th.o.98 billion (2010 est.97 billion (2010 est.)[17] Main data source: CIA World Fact Book All values.34 billion (31 December 2010 est.82 billion (72nd. are in US dollars Iran Overall Score: 42.) Public finances Public debt 16. Import goods industrial raw materials and intermediate goods (46%).6% of GDP (2010 4.1% (2009) FDI stock Home: $16.) Revenues $110.2% (2009) Imports $58.9 billion (2010 est. Germany 9.) (on exchange rate basis. 2010) Abroad: $2.)[15] Credit rating B for sovereign risk (June 2009)[16] Foreign reserves $100 billion (2010 est. unless otherwise stated.

0 Government Spending Avg. from Corruption Avg 40.Ten Economic Freedoms of Iran Embed this data 69.7 Labor Freedom Avg 61. Fortunately in 2005 the law had changed and the new law allowed foreigners to come into the country and own 100% of a foreign investment.8 10.3 0.5 60. 74. Introduction To open a hypermarket in a country like Iran is not an easy decision.3 10. cultural differences and political constraints.8 Trade Freedom Avg.6 76.0 Property Rights Avg 43.4 50.0 Financial Freedom Avg 48. Market Audit and Competitive Market Analysis Guideline I.1 Fiscal Freedom Avg. 76. The product Wal-Mart hypermarket A.5 81.9 18. Evaluate the product as an innovation as it is perceived by the intended market 52 .4 Business Freedom Avg 64. II.2 44. but if you compare the GDP per capita across these countries. 63. you would be attracted by its population which is more than 75 million (60% are under 30 years of age) and GDP as it has the third highest GDP in the region after Saudi Arabia and the UAE. 73.0 Fdm.7 Monetary Freedom Avg.0 Investment Freedom Avg 50.5 III. you will see it is much more balanced in Iran than in Saudi Arabia but we would face main issues like bureaucracy.

There are too many rules of importing and they change very frequently. Iran has the third highest GDP in the region after Saudi Arabia and the UAE.478 small grocery retailers. 2. Iran has a very young population—more than 60% are under 30 years of age. You can say it is a very stable country.438. Wal-Mart as an American name would be banned in Iran specially after the last incident of the Iranians trial to kill a Sudan diplomatic in America 3. The American Iranian dispute about Iranian intentions to have a nuclear weapon would affect any new American investment in Iran.and these are especially popular in cities other than Tehran where the number of hypermarkets and supermarkets is still very limited. but if you compare the GDP per capita across these countries.Iran has an extremely high number of outlets for both grocery and non-grocery retailers . long procedures that a foreign investor has to undergo. The number of hypermarkets in Tehran is very limited Despite the existence of hypermarkets. Political disturbance and the American war in Afghanistan and Iraq would make it difficult to enter the Iranian market under an American name such Wal-Mart. An increase in oil price which had peaked in 2008 led to impressive growth in disposable income of Iranians. Complexity     Products itself need a strong supply chain from many different suppliers and time is a very critical factor. The population of Iran is more than 75 million. There is no other country of this size in the Middle East. There are many. Iranians are used to going to a variety of outlets to do their weekly shopping. Some products need installation and after sale services. you will see it is much more balanced in Iran than in Saudi Arabia. even if there are some issues. 1. Compatibility       The concept of chain stores for non-grocery retailers still is not well grasped in Iran. The customer behavior is very demanding and they are well educated. Relative advantage         The number of hypermarkets and supermarkets is still very limited. 53 .

The market Iranian market is a very wide market including different interests with a high purchasing power and population. long procedures that a foreign investor has to undergo and cultural differences as well. There is no other country of Iran‘s size in the Middle East with a population of more than 75 million. Geographical region(s) 54 . A. Iran has the third highest GDP in the region after Saudi Arabia and the UAE. there are many. Describe the market(s) in which the product is to be sold Iranian market is a stable market even if there are some issues. 1. we will see it is much more balanced in Iran than in Saudi Arabia and it has a very young population—more than 60% are under 30 years of age. III. We cannot find real estate of a suitable size in Iran with only one landlord to build on. Major problems and resistances to product acceptance based on the preceding evaluation The main issues are the governmental and social resistance to an American investment and bureaucracy. but when we compare the GDP per capita across these countries. 4. Trial ability  According to the product type sold in the hypermarket B.

000 inhabitants. Forms of transportation and communication available in that (those) region(s) Routs and railways: Major routes and railways of Iran Iran has a long paved road system linking most of its towns and all of its cities. In 2008 there were nearly 100 passenger cars for every 1. 172 extra kilometers will be built Railway system map of Iran in Tehran till 2012 and over 380 kilometers in the other cities (Isfahan Metro. commercial and industrial center of the nation. on the south by the Persian Gulf and the Gulf of Oman. cultural. connects Bandar-Abbas to the railroad system of Central Asia via Tehran and Mashhad. Azerbaijan and Turkmenistan. and holds an important position in international energy security and world economy as a result of its large reserves of petroleum and natural gas 2.152 km (111. Shiraz Metro. The country‘s major port of entry is Bandar-Abbas on the Strait of Hormuz. Iran is bordered on the east by Afghanistan and Pakistan. In total. opened in 1995. on the west by Iraq and on the northwest by Turkey.942 mi) of railroad track.648. imported goods are distributed throughout the country by trucks and freight trains. Tabriz Metro. The TehranBandar-Abbas railroad. the country's largest city and the political.000 mi) of roads. Metro: Along with extension work on the Tehran Metro. As Iran is a littoral state of the Caspian Sea. Kazakhstan and Russia are also Iran's direct neighbors to the north. It is a country of particular geopolitical significance owing to its location in the Middle Eastand it is the second largest country in it. of which 66% were paved. Trains operated on 11.Iran is the 18th largest country in the world in terms of area at 1. In 2007 the country had 178. After arriving in Iran. Iran is a regional power. Ahvaz Metro and Karaj Metro) 55 .106 km (6. Other major ports include Bandar e-Anzali and Bandar eTorkeman on the Caspian Sea and Khorramshahr and BandarEmam Khomeyni on the Persian Gulf. six other metro projects are being built.195 km2 (636. Tehran is the capital.372 sq mi). Iran is bordered on the north by Armenia.

Arvand Kenar. Ahvaz. The project. specifically for domestic use. Bandar-e Mahshahr. Lavan island.Ports and harbors: The capacity of container loading and unloading in the country‘s ports is currently at 4. Resalat. Khorramshahr (limited operation since November 1992). high-speed Internet via digital subscriber lines (DSL). Port capacity will increase to 200 million tons in 2015 from 150 million tons in 2010. however. Bandar Abbas. dominated by the Telecommunication Company of Iran (TCI). The most widely circulated periodicals are based in Tehrān. Internet: In 1993 Iran became the second country in the Middle East to be connected to the Internet. Bandar Abbas is in southern Iran and handles 90% of the country's container throughput. Kayhan. will be completed by 2013. Chabahar (Bandar-e Beheshti). Bandar-e Torkaman (Caspian sea).4 million which will increase to 7 million by the end of 2015. In terms of mobile provision in 2004. This network will be separated from the rest of the internet. Iran lagged all the countries mentioned above Press: it is privately owned and reflects a diversity of political and social views. Iran Daily and the Tehran Times (both are English-language papers). Bandar-e Anzali (Caspian sea). Consumer buying habits 56 . Myanmar and Cuba also use similar systems. standing at 22 lines per 100 people. Sirri island. Popular daily and weekly newspapers include Ettelaat. which is separate from the world wide web. Bandar-e Lengeh. Noshahr (Caspian sea). Most Iranian newspapers are published in Persian. Fixed-line penetration in 2004 was relatively well-developed by regional standards. Bandar-e Emam Khomeyni. higher than Egypt with 14 and Saudi Arabia with 15. high-bandwidth lease lines and satellite National internet: Since 2005. All ports: Abadan. Main: Assaluyeh. Creating such a network. Iran has been developing a "national Internet" to improve control over its content as well as speed. Communications in Iran:     Iran‘s telecommunications industry: is almost entirely state-owned. Bushehr. Bandar Abbas. but newspapers in English and other languages also exist. Kharg island. similar to one used by North Korea. Bandar-e Eman Khomeyni. Radio& Telivision: as discussed in the previous section 3. would prevent unwanted information from outside of Iran getting into the closed system. although behind the UAE with 27.

4. highly b. well-educated and involved with business and service development a. Product-use patterns An interesting shopping environment with entertainment activities is recommended and it depends on product and/or service sold in the hypermarket. Since then every form of media has come under the state. and all that is seen by the Iranians is under the directive of the state. In that context the advertisement media have to stick to self policing in whatever they say or do 57 . Product feature preferences High quality of packaging and product itself with an interesting visualization and sorting. willing to purchase high quality products and fresh foods. Advertising and promotion All types of media in Iran is censored by the Islamic regime which has been in the control of this country since the Islamic revolution of 1979. Consumers have a high disposable income. Typical retail outlets Iran has an extremely high number of outlets for both grocery and non-grocery retailers (438. Shopping habits Iranians are used to going to a variety of outlets to do their weekly shopping.478 small grocery retailers) 5. c. Distribution of the product It needs a very strong supply chain to provide all products needed on time Installation and after sale services are required for some products Fresh foods and snacks are provided inside the hyper market and according to the snacks provider a.

intensive promotions activities during special occasions and events. food products. Culturally. and so on.  Word of mouth. especially relative to the family life style.) billboards b.  Public Relation.Advertising media usually used to reach your target market(s)      Iranian Newspaper's Iran Yellow Pages Iranian radio& television Advertizing on national transportation (Super bus. So viral marketing will be our main concern. Pricing strategy We are targeting to provide consumer goods by less than 10% compared with the regular grocery retailers a. B.  Weekly offers.) We want to develop our own brand. metro.…. like Refah 58 . taxi. coupons. That means we are going to work on:  Packaging. the municipality and the army.  After sales services. Wal-Mart low cost coupons help you save money. Types of discounts available  Wal-Mart provides the very best choice of Discounts. Wal-Mart coupons can be obtained together with hot deals about the most recent regarding electronics. the more important competitors are Hyperstar (Carrefoure) beside the chain cooperatives that belong to the state. Compare and contrast your product and the competition‘s product(s) Small retailers are not a big issue because around the world there are small retailers we have to compete with. we'll deliver for free and call people after the delivery service to find out how it went. Sales promotions customarily used (sampling.  Gift cards are available in special occasions.  We will work on private labeling. Iran is relatively high in collectivism. how to save money. or else. clothing. etc. 6.

59 . Package They are focusing on quality even in packaging and also they are working on their private labeling 2. Market size Iranian market is a very wide market including different interests with a high purchasing power and population. Competitor‘s product(s) Hyperstar prices are less than the regular grocery retailers by 10% The chain cooperatives that belong to the state. Brand name Hyperstar (Carrefour) b. Their suppliers understod that business very well and they had improved the logistics of delivery c.and Sepah. As they are non-profit cooperatives and have subsidized prices their competition is more important than that of small retailers 1. Features    They positioned themselves as a service provider for the middle class They have a very good relations with the iranian government and municipality. the municipality and the army. Competitor‘s prices Consumer products are less than regular grocery retailers by 10% C. like Refah and Sepah are non-profit cooperatives and have subsidized prices a.

Estimated industry sales for the planning year Sales show healthy growth over the forecast period    Despite the fact that retail prices are predicted to continue to increase over the forecast period. 2. Estimated sales for your company for the planning year We are planning to serve:   15. total sales are forecast to grow at a healthier AGR (Annual Growth Rate) in constant value terms than during the review period. Government participation in the marketplace The first step was to gain approval from the Iranian government as a foreign company making a foreign investment and establishing 100% ownership 1.648. D. The emergence of any multinational retailers will further drive growth.000 customers per day. Sales growth will be fuelled by the same factors that drove growth over the review period. Economic and Technical Assistance of Iran) 2.000 customers on average / month . Regulations you must follow 60 .    The population of Iran is more than 75 millions Iran has a very young population—more than 60% are under 30 years of age Iran is the 18th largest country in the world in terms of area at 1. Agencies that can help you   FIPPA (the Foreign Investment Promotion and Protection Act) OIETAI (the Organization for Investment. On the other hand. growth will continue to be inhibited by the government‘s policies regarding foreign investment and privatization. 300.372 sq mi) Iran is the second large country in the middle east 1. including rising purchasing power and improving standards of living and lifestyles.195 km2 (636.

commercial code company law. labor law the first step was to gain approval from the Iranian government as a foreign company making a foreign investment and establishing 100% ownership IV.iranecommerce.Iran has two types of laws concerning foreign Iran business law and regulations (www.iran. import and export regulations. Executive summary Applied law: FIPPA and its implications regulations approved in 2002 . Preliminary Marketing Plan writing guide 61 . Sources of information       The business year website interview with Marc ( Wikipedia website VI. The first are laws that address issues concerning foreign companies directly such as the Foreign Investment Promotion and Protection Act (FIPPA) and the second are general laws of which certain articles or by-laws address foreign of Iran business information Corbion The Iran virtual library (http://www. for instance the Taxation Law and the Labor Law.php?id=15) Hyperstar iran website Iran ecommerce – the synonem (http://www.thebusinessyear. Appendixes [insert text here] IV.

Marketing objectives writing guide [insert text here] 1. Packaging component 62 . Market penetration and coverage [insert text here] B. Target market(s) (specific description of the market) [insert text here] 2. Expected sales 20[insert text here] 3.Guideline I. The marketing plan [insert text here] A. Core component [insert text here] 2. Product adaptation or modification writing guide [insert text here] 1. Profit expectations 20[insert text here] 4.

Coupons 63 . Advertising [insert text here] a. Support services component [insert text here] C. Costs [insert text here] 2.[insert text here] 3. Objectives [insert text here] b. Media mix [insert text here] c. Objectives [insert text here] b. Promotion mix [insert text here] 1. Sales promotions [insert text here] a. Message [insert text here] d.

Port selection [insert text here] a. Other promotional methods [insert text here] D. Personal selling [insert text here] 4. Premiums [insert text here] d. Mode selection: Advantages/disadvantages of each mode [insert text here] a. Costs [insert text here] 3. Distribution: From origin to destination writing guide [insert text here] 1. Origin port [insert text here] b. Railroads 64 .[insert text here] c. Destination port [insert text here] 2.

Dock receipt [insert text here] c. Documentation required [insert text here] a. Marking and labeling regulations [insert text here] b. Air carriers [insert text here] c. Bill of lading [insert text here] b. Air bill 65 . Costs [insert text here] 4. Ocean carriers [insert text here] d.[insert text here] b. Motor carriers [insert text here] 3. Packing [insert text here] a. Containerization [insert text here] c.

Statement of origin [insert text here] h. Commercial invoice [insert text here] e. Pro forma invoice [insert text here] f. Insurance claims [insert text here] 6. Shipper’s export declaration [insert text here] g. Channels of distribution (micro analysis) writing guide [insert text here] 1. Retailers 66 .[insert text here] d. Special documentation [insert text here] 5. Freight forwarder writing guide [insert text here] E.

Import/export agents [insert text here] 67 . Methods of operation for each type (cash/credit) [insert text here] d. Methods of operation for each type (cash/credit) [insert text here] d. Type and number of wholesale middlemen [insert text here] b. Scale of operation for each type (small/large) [insert text here] 2. Scale of operation (small/large) [insert text here] 3. Markup for class of products by each type [insert text here] c. Retail markups for products in each type of retail store [insert text here] c. Type and number of retail stores [insert text here] b.[insert text here] a. Wholesale middlemen [insert text here] a.

Warehousing [insert text here] a. Pier charges [insert text here] b. Cost of the shipment of goods [insert text here] 2. Wharfage fees 68 . Location [insert text here] F. Handling expenses [insert text here] a.4. Type [insert text here] b. Transportation costs [insert text here] 3. Price determination writing guide [insert text here] 1.

Company’s gross margins [insert text here] 9. Loading and unloading charges [insert text here] 4. Import taxes and value-added tax [insert text here] 7. Wholesale and retail markups and discounts [insert text here] 8.[insert text here] c. Customs duties [insert text here] 6. Retail price [insert text here] 69 . Insurance costs [insert text here] 5.

C&F. Advantages/disadvantages of each [insert text here] H. Sight. Cash in advance [insert text here] 2. FAS. CIF [insert text here] 2. time. FOB. or date drafts 70 . Consignment sales [insert text here] 4. EX works. Methods of payment writing guide [insert text here] 1. Open accounts [insert text here] 3.G. Terms of sale [insert text here] 1.

Letters of credit [insert text here] II. Selling expense [insert text here] 2. Distribution expense [insert text here] 4. Marketing budget [insert text here] 1.[insert text here] 5. Advertising/promotion expense [insert text here] 3. Pro forma financial statements and budgets [insert text here] A. Product cost [insert text here] 71 .

Other costs [insert text here] B. Pro forma annual profit and loss statement (first year and fifth year) [insert text here] III. Sources of information [insert text here] 72 . Production capacity [insert text here] IV. Finances [insert text here] B.5. Executive summary writing guide [insert text here] V. Personnel [insert text here] C. Resource requirements [insert text here] A.

VI. Appendixes writing guide [insert text here] 73 .

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