Iran woos local investors as US sanctions loom, currency falls

Iranians walk inside Tehran’s ancient Grand Bazaar in Tehran on July 28, 2018. (AFP)
Updated 28 July 2018

Iran woos local investors as US sanctions loom, currency falls

  • The probable return of sanctions has triggered a rapid fall of Iran’s currency
  • The new Iranian plan appears to be aimed at easing concern over the US decision

DUBAI: Iran plans to offer price and tax incentives to private investors to take over idle state projects and help boost the economy, state media reported on Saturday, as the country faces likely US sanctions and the exit of many foreign companies.
In May the United States pulled out of a multinational deal to lift sanctions against Iran in return for curbs on its nuclear program, and Washington has told countries they must halt all imports of Iranian oil from Nov. 4 or face US financial measures.
The new Iranian plan, along with action against alleged financial crime, appears to be aimed at easing concern over the US decision.
The probable return of sanctions has triggered a rapid fall of Iran’s currency, protests by bazaar traders usually loyal to the Islamist rulers, and a public outcry over alleged profiteering.
The plan will offer attractive prices and flexible terms as well as tax holidays for investors who agree to take over some of the 76,000 government projects which are unfinished or idle, Vice President Eshaq Jahangiri said on state television.
“Over the past few months, the country’s liquidity has gone into housing, foreign exchange and gold coins, raising prices and provoking public concerns,” Jahangiri was quoted as saying by the website of the state broadcaster.
“A main issue in the meeting ... was to find solutions to push liquidity toward employment and activating manufacturing,” Jahangiri added after the meeting attended by President Hassan Rouhani, and the heads of parliament and the judiciary.

PULLING OUT
The sanctions start to come into effect in August but some European companies investing in Iran and with big US operations have already announced they will pull out of business deals with Tehran.
The Iranian rial plunged to a record low against the US dollar on the unofficial market on Saturday. The dollar was offered for as much as 97,500 rials, compared to about 85,500 a week ago, according to foreign exchange website Bonbast.com.
The currency has lost more than half of its value this year because of a weak economy, financial difficulties at local banks and heavy demand for dollars among Iranians who fear the effects of sanctions.
Judiciary spokesman Gholamhossein Mohseni Ejei said on Saturday that 18 people had been arrested over alleged profiteering from foreign exchange dealings and the illegal importing of luxury cars, state television reported.
In late December, demonstrations which began over economic hardship spread to more than 80 Iranian cities and towns. At least 25 people died in the unrest, the biggest expression of public discontent in almost a decade.
Demonstrators initially vented their anger over high prices and alleged corruption, but the protests took on a rare political dimension, with a growing number of people calling on Supreme Leader Ayatollah Ali Khamenei to step down.


Miami to become new powerhouse of tech startups

Updated 10 min 37 sec ago

Miami to become new powerhouse of tech startups

  • That diversity offers startups access to markets on the US East Coast, Latin America and Europe, according to experts

MIAMI: Miami is famous for beach parties, gators that wander onto golf courses and iguanas that tumble out of palm trees.

But now the city of “Scarface” and “Miami Vice” is vying to become a new powerhouse of tech startups that some in the business hope will spawn a novel phenomenon — the “iguanacorn.”

The word is meant to represent the tropical answer to the Silicon Valley “unicorns,” startups that are worth more than $1 billion.

While still lagging behind San Francisco and New York, the Florida city is trying to position itself as a tech hub, and already has its first “unicorns” under its belt. They include ParkJockey, which has disrupted the car parking sector, and Magic Leap, which takes users into the world of augmented reality.

Looking to surf the Florida tech wave, so-called startup accelerators — firms that invest in fledgling tech ventures and speed up their early development — are starting to pop up in southern Florida.

Among the leaders is 500 Startups, which opened a Miami branch last year, as well as TheVentureCity, set up two years ago to offer opportunities to Latin American and European entrepreneurs who lack Silicon Valley contacts.

“Not everyone comes from Stanford or Columbia, from MIT, and has their own ‘network’ built up in San Francisco,” said Laura Gonzalez-Estefani, a former Facebook executive and co-founder of TheVentureCity.

The idea of her company is to “identify the best businesses outside of Silicon Valley and give them a boost,” she told AFP. She jokingly refers to such ventures as “iguanacorns.”

“‘Iguanacorns’ is the way we tag the unicorns that are coming from emerging tech hubs,” she said.

In keeping with that idea, her office is decorated with pictures of unicorns and their tropical, reptilian cousins.

Ana Gonzalez, head of 500 Startups Miami — which has its main headquarters in Silicon Valley — said that Miami’s “entrepreneurial ecosystem is at an inflection point.”

Her goal too is to “connect resources and expertise from Silicon Valley with Latin America and the Southeast United States.”

Miami is already an international city, home to a diverse mix of Latinos and Europeans who can snack on Cuban croquettes or cross the street and find Russian “syrnikis,” pancakes stuffed with cottage cheese.

Fifty-three percent of the city’s 2.7 million residents are foreign-born, and locals joke that Miami is the only foreign city Americans can visit without a passport.

That diversity offers startups access to markets on the US East Coast, Latin America and Europe, according to experts.

Additional draws include low taxes, a lower cost of living compared to San Francisco and New York, and a pleasant climate — if you don’t mind hurricanes.

“A big percentage of our entrepreneurs are not from here,” said Brian Breslin, head of the University of Miami’s Entrepreneurship Center.

“Whether it’s South America or Europe or other parts of the United States, they’re coming here for lifestyle reasons, cost-of-living reasons, safety/security, access to different markets. So there’s a lot of different value-adds of being here compared to, say, going to San Francisco, or New York, or Boston, or any of the other traditional tech hubs,” he said.

According to 2019’s Global Startup Ecosystem Report, which analyzes the health of tech ecosystems around the world, Miami is one of the ten cities to emerge as a hub this year, and ranks in the top 30 of the most important startup centers globally.

Tech sector workers in the city increased by 40 percent between 2012 and 2018, the report said, noting that “Miami is becoming a tech powerhouse.”

And Breslin said the cycle of growth in more established tech hubs indicates that more expansion is yet to come.

“I don’t think we’ve peaked yet. I think there’s still growth to be had,” he said.

“People go work at Facebook, or Google, make a ton of money and go start a new business. And we’re just now getting to that point where people made a lot of money working at Chewy.com, at Ultimate Software, hopefully soon at Magic Leap, and then those people will turn around and start the next wave of businesses,” he said.