Iran embraces foreign business

President Khatami's reforms have attracted widespread support

By Jim Muir in Tehran

The Iranian parliament has approved a bill aimed at attracting much-needed foreign investment to help revive the economy.

One of the main aims of the bill is to assure foreign companies that their investments will be safe and their assets will not be seized, as happened after the Islamic Revolution in 1979.

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The draft bill, backed by President Mohammad Khatami's reformist government, was overwhelmingly approved despite opposition from a number of right-wing conservatives.

The issue of foreign investment in Iran is a highly sensitive one given earlier decades of foreign interference and control of the country's rich oil resources.

Foreign domination

But Iran's dire economic plight has brought a broad measure of agreement among the politicians that encouraging investment from abroad is essential if economic growth is to be sustained and jobs created to meet the needs of an increasing number of young people reaching working age.

A number of right-wing conservative deputies argued strongly against the new bill.

They said it did not serve the national interest, it could reintroduce foreign domination of the country and leave it more vulnerable to international market crises.

But when it came to the vote, a large majority approved the broad lines of the bill, the details of which will be debated and finalised in later sessions.

Security pledge

The key element is the protection the bill is now offering for the first time to foreign investors willing to enter the Iranian economy.

Provided their project has government approval, they will now be given guarantees that their holdings and profits will be safe.

The approval in open session of parliament came a day after the chamber had held a closed session attended by key government officials.

The intelligence ministers are reported to have pledged that the country's security forces were actively prepared to safeguard foreign investments from a security point of view.