Irans Economy: SWOT Analysis

Irans Economy SWOT AnalysisStrengthsLocation between the Middle East and Central Asia, with access to the Persian Gulf and Caspian SeaIran is the eighteenth largest country in the worldThe economy of Iran is the twenty-fifth largest in the world by GDP (nominal) and the eighteenth largest economy in the world by purchasing power parity (PPP)worlds plump for largest proven embrocate colour reserves, after Saudi Arabia,worlds second largest proven gas reserves after RussiaIt is OPECs (Organization of the Petroleum Exporting Countries) 2nd largest oil exporter and is an energy superpower.Subsidy reform has cut domestic consumption of oil and gas and provides more for exportOil and gas aside, Iran is rich in other resources and has a strong agricultural sectorEasy Access to markets of neighbour countriesIran has one of the highest urban branch rates in the world. From 1950 to 2002, the urban proportion of the population increased from 27% to 60%TSE (Tehran Stock Exchange) has been one of the worlds best playing stock exchanges in recent years.The overseas Investment Promotion and Protection Act (FIPPA) gives some protection to foreign investors and relatively good terms for the repatriation of gainAlthough stifled in the years since the revolution, Iranians are known for their entrepreneurial skills, which is potentially a strong pull for foreign investors.excellent reverse engineering capabilities and adept innovationA large army including elite unitstwo thirds of Irans population under the age of 25Young, motivated and active work forceIran is a diverse country, consisting of people of many religious and ethnic back cast anchorsIran is home to one of the richest artistic traditions in world history and encompasses many disciplines, including architecture, painting, weaving, pottery, calligraphy, metalworking and stonemasonry.Existing historical tourist attractions for improving pieceal tourismThe elaboration of Iran is a mix of ancient pre-Islamic culture and Islamic cultureWeaknessesOne product economy ( frugal growth only rely on oil and gas industry)Little international or multinational involvement. transnational sanctions make investment and financing transactions tight.International sanctions discourage foreign oil companies from bringing much needed technical knowledge and equipment to maintain oil output levels.International Sanctions are eating into Irans oil revenues, increasing the chances of severe social unrest.International sanctions in banking system, means that the sector is underdeveloped and under-competitiveAfter a concerted effort to reduce earthly concern debt in recent years there are signs that it is once again risingIran has only a few allies in the regionForeign firms are unable to own hydrocarbon resources in IranUnfavorable contract structures limit profitability for foreign investors.Inability of withstandling exchange ratesLimited financial or operational freedomLack of infrastructures in diffe rent economical partsThe beginning of the countrys subsidy reform program has lowered its growth prospects and speed inflation.Progress on privatization front remains slow despite some recent encouraging signsStructures of state-run firms are inefficient, which slows down the production process.Strict government control is highly restrictive to innovationLack of funds in commerce and factory farm sectionLack of transportation vehiclestraditional production methods due to omit of modern technologiesBureaucracy constricts entirely state-run industries.Poor research facilities (despite ability to reverse-engineer).Decision making ultimately rests with the Supreme LeaderIran has one of the poorest human rights records in the regionOpportunitiesThere is a possibility of regional dominance in the short term due to the countrys size and influenceThe gas sector is underdeveloped and there is considerable room to maximize this source of revenue.government subsidized foundations that domi nate Irans non-oil economyAny normalization of relations between Iran on one hand and the USA and its allies on the other could provide the impetus for a huge reform of the banking sector.The government has granted a number of licenses to new private banks in recent years these private banks are growing far faster than their state-owned counterparts.A growing population, combined with a shortage of housing, provides opportunities for investment in residential construction.Widespread deployment of enhanced oil recovery (EOR) techniques could significantly boost output.Considerable untapped gas export potentialUS setbacks in Iraq and Afghanistan have given Iran an opportunity to assert greater strategic influence in the regionIran still has option to resolve atomic crisis diplomaticallyIran retains support in the international community, notably from China and Russia, which both oppose sanctions.Opportunities for export if restrictions are lifted.A growing realization that internatio nal supporter may be required to develop industry could see further involvement in the future.Being neighbor with underdeveloped countries of Afghanistan and PakistanGood climate for agriculture and providing the base for expanding of these productsHaving young, motivated and active workforceHaving border markets provide basis for crossborder interactionsExisting special economical region and providing the base for economic growthHaving major productive benefits in mine and industry sectionsHaving good universities and colleges to improve professional work force in the regionExpanding native culture of region and country to other neighboring countriesThreatsLack of privatization will continue to stifle the industry.Concentration on high-profile programs will detract from more essential ground forces research.Ongoing tension over Irans nuclear program raises the prospect of further US and UN Security Council sanctionsEthnic tensions are on the rise steep youth unemployment.A decline in world oil prices would have a considerable impact on the economy.There is a serious gamble of capital flight due to fears of conflict or sanctions.UN and EU sanctions on Iran pose a significant threat to the participation of foreign firms in the oil and gas sector.Non-performing loan ratios are dangerously high there are serious concerns over the solvency of state-owned banks over the long term.Government-mandated lending to poorer Iranians at low stakes rates means that banks have limited control over their lending policies.UN, US and EU sanctions on Irans banking and energy sectors are making it difficult for foreign companies to undertake financial transactions with Iranian entities, and risky to invest in the hydrocarbons sector.The risk of internal political instabilityLong-term fall in domestic oil productionChanges in OPEC/national energy policyStrong regional competitionPolitical issues make procurement decisions extremely slow. diminish pace of development.Inefficient workforce acts as a further drain on resourcesNot having enough infrastructures for expanding different economical sectionsSafety threats and consequently less(prenominal) investingReligious and tribal networksImmigration of professional workforceHaving unsuitable weather like 120 day sand stormLack of advanced technologies