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Foreign Investment In Iran In 2019 Dropped To Lowest Level In 17 Years

The French energy giant Total pulled out of investments in Iran after the U.S. imposed sanctions. Photo from Oil, Gas, Refining & Petrochemical Exhibition in Tehran, May 06, 2015

The United Nations Conference on Trade and Development (UNCTAD) in its latest report says foreign direct investment (FDI) in Iran has dropped by 36.5 percent in 2019 compared with the previous year.

Figures published by UNCTAD show foreign investment in Iran was $ 1.5 billion over the past year, the lowest since 2002.

That figure was above $ 5 billion in 2017 but dropped to $ 2.3 billion the following year and fell further to a $ 1.5 billion last year as U.S. sanctions took hold.

However, the Islamic Republic's Minister of Economic Affairs and Finance, Farhad Dezhpasand, claimed last February that "in the first nine months of 2019, foreign investment in Iran showed a 32 percent increase compared with the same period last year."

Nonetheless, Mr. Dejpasand did not provide detailed figures or evidence to back-up his claim. The Islamic Republic's official statistics are often seriously questioned by experts and sometimes contradict data provided by international organizations.

UNCTAD's statistics set Iran's share of global FDI in over the past year as less than one-tenth of a percent (one-thousandth). Last year, the volume of FDI across the world reached $ 1,540 billion, which indicates a three percent growth compared with 2018.

The United Arab Emirates (UAE) attracted almost ten times, Turkey five times, Saudi Arabia three times, and Iraq and Oman twice as much foreign investment as Iran did.

In the wake of the COVID pandemic, UNCTAD says the world is expected to experience a 40 percent drop in the volume of foreign investment in 2020 compared with 2019. This means FDI will fall below one trillion dollars for the first time since 2005.

Furthermore, UNCTAD says global FDI will also fall five to ten percent next year before recovering in 2022.

While the value of global FDI jumped to the record level of $ 2 trillion in 2015, it has dropped every year since then, and finally recovered slightly last year.

The World Bank recently reported that the pandemic might cause the global economy to shrink and drop to a negative 5.3 percent growth this year.