Ambitious plans have been approved by Iran's parliament which aims to create 800,000 jobs a year.
Foreign investment could benefit Iran's under-developed private sector and those out of work
The five-year plan aims to cut state subsidies, reduce state dominance in the economy and boost investment.
"The plan is a turning point in Iran's economic history and economic recovery", said parliament's deputy speaker Ali Shakourirad.
It will reduce fuel subsidies and allow
foreign banks to operate branches anywhere in the country.
It puts a target on annual economic growth of over 8% following 7.4% in the year to March 2003.
The promotion of foreign investment follows years of dearth in the wake of the 1979 Islamic revolution.
More foreign money, the government hopes, will help reduce unemployment from its current level of 16%.
Inflation, at 14%, is expected to fall to a single digit rate.
Economists generally agreed with the plan which follows the current five-year plan which expires on March 2005.
Like all legislation in Iran it needs to be approved by the Guardian Council before it can become law.