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Iran’s Tourism Industry Grows by 21% in 2023: WTTC

• April, 29, 2024 - 17:23
• Tourism news

TEHRAN (Tasnim) – Iran’s tourism industry registered a 21% growth in 2023, the World Travel and Tourism Council (WTTC) said.

After Iran’s tourism industry had experienced a 40% growth in 2021 and also a 39% hike in 2022 after the global coronavirus pandemic, it registered a 21% growth in 2023.

According to the latest statistics of the council, the tourism industry's share in Iran’s total economy in 2023 rose to 4.7 percent.

The job generation of Iran’s tourism industry last year registered a 10.3 percent growth compared to a year earlier.

The council has predicted that Iran’s tourism industry will experience a 12.1 percent growth in 2024.

Among the foreign tourists who visited Iran in 2023, 37 percent were Iraqi nationals, so Iraq ranked first in terms of the highest number of the foreign tourists visiting Iran in this period, followed by Turkey, the Republic of Azerbaijan, Pakistan and Lebanon, the council added.

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• https://en.mehrnews.com/news/214503/
• Apr 29, 2024, 10:30 AM
• News Code 214503

Iran's tourism industry up by 21% in 2023

TEHRAN, Apr. 29 (MNA) – The World Travel and Tourism Council (WTTC) has announced a 21 percent growth in Iran's tourism industry in 2023.

The World Travel and Tourism Council (WTTC) reported that Iran's tourism industry experienced growth last year, despite facing a 45% drop in its contribution to the GDP due to the spread of the coronavirus in previous years.

The latest statistics from the World Travel and Tourism Council showed that the share of the tourism industry in Iran's total economy increased slightly to 4.7% in 2023. Moreover, the value of this industry in Iran rose to 740,000 billion tomans during the last year.

Furthermore, the number of people employed in the tourism industry grew by 10.3% in 2023, which was a significant increase compared to the previous year. The number of people working in this industry reached 1.6 million, and the share of the tourism industry in Iran's total employment reached 6.6% in 2023.

The WTTC predicts that Iran's tourism industry will grow by 12.1% in 2024, and the value of this industry will reach 830,000 billion tomans.

The statistics also indicate that the domestic tourism industry in Iran grew well in 2023, alongside the boom in foreign tourism.

Foreign tourists spent 70,000 billion tomans in Iran in 2023, which was an increase of 83.6% compared to the previous year.

Iran's domestic tourists spent as much as 493 thousand billion tomans, about 18.7% growth compared to 2022, according to the WTTC data.

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• Tue April 30, 2024

Iran’s tourism picks up 39 percent in 2022, WTTC report says

TEHRAN – Iran’s tourism industry achieved 39 percent year-on-year growth in 2020 when the total expenditure by foreign tourists hit $6.2 billion, according to a recent report by the World Travel & Tourism Council (WTTC).

Iran has witnessed the revival of the tourism industry in two consecutive years, IRNA reported.

While the country’s tourism industry faced a 45% drop in its share of the GDP in 2020, the share of this industry in the economy experienced a 40% jump in 2021.

According to the latest statistics of the World Travel and Tourism Council, the share of the tourism industry in the total economy of Iran in 2022 also increased by 39.2 percent and reached 4.6 percent of the total economy of Iran.

With the boom in tourism, the job creation rate of this industry in Iran increased by 11.2% in 2022, and the number of people working in this industry increased to 1.44 million. In the same way, the share of the tourism industry in total employment in Iran reached 6.1% in 2022.

Statistics show that foreign tourists spent 6.2 billion dollars in Iran in 2022, which is a 73.5% increase compared to the year before.

Of the total number of foreign tourists who entered Iran in 2022, 55% were Iraqis, and tourists from the Republic of Azerbaijan and Turkey each with 6%, Pakistan with 5%, and Kuwait with 2% were in the next ranks, respectively, IRNA reported.

Foreign tourist arrivals in Iran saw a rise of 50 percent in the first two months of the current Iranian calendar year from a year earlier (started on March 21), the tourism minister last week.

The Islamic Republic has recorded about 850,000 foreign tourist arrivals during the first two months of the year, which shows over 50 percent growth year on year, Ezzatollah Zarghami said.

According to the statistics bureau of the World Tourism Organization, Iran’s foreign tourist arrivals in 2022 rose 315 percent from a year earlier. Data showed around 4.1 million tourists came to the country in 2022, while the Islamic Republic attracted 990,000 tourists in 2021.

The upsurge of foreign tourist arrivals in 2022 was three times the global average growth in this field. Nevertheless, Iran's share in attracting foreign tourists is still small, and only 0.4% of all foreign tourist trips in 2022 have been made to Iran, the report said.

As mentioned by the latest WTTC report, the tourism industry has been able to account for 7.6% of the world's total GDP in 2022.

In 2020, as a result of the coronavirus restrictions, the world tourism industry faced a 50.4% drop in its share of the global economy, and the value of this industry was reduced by 4,900 billion dollars.

However, in 2021 and with the reduction of virus restrictions, a growth of 21.7% was reached in 2022, and the value of the travel industry increased by 7.7 trillion dollars.

Last year, 22 million new jobs were created in the world's tourism industry, which has increased by 7.9% compared to the year earlier.

Moreover, the number of workers in this industry has reached 295 million people, which is equivalent to 9% of the total employment in the world, the report said.

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Iran's tourism industry is booming

Once off limits to many because of international sanctions, Iran is making a big comeback as a tourist destination.

More than 6 million people visited Iran in the year ending March 2017, up 50% on the previous year and three times the number in 2009, according to official data.

The surge in visitors follows the 2015 nuclear deal between Tehran and world powers that resulted in many sanctions being lifted early the following year.

European airlines such as British Airways and Lufthansa ( DLAKY ) resumed direct flights to the country, and Iranian authorities relaxed visa requirements. And as more people arrive, demand for accommodation is skyrocketing.

That's creating opportunities for local entrepreneurs and foreign businesses.

Unlike some Western firms, who are reluctant to invest in Iran because they fear President Trump could yet torpedo the nuclear deal, international hotel chains are moving fast to meet the need for more rooms.

Related: The ride-hailing app that rules Tehran's busy streets

France's Accor ( ACCYY ) was the first chain to open in Iran in 2015. It now operates two hotels there.

Spain's Melia ( SMIZF ) will open its first hotel next year. Rotana of the United Arab Emirates also has one hotel in the pipeline for early next year and plans three more by 2020.

EasyHotel, a U.K.-based budget chain, is reported to have signed a deal in July to deliver 500 rooms. It did not respond to a request for comment.

And the market clearly has room for many more players. Iran wants to attract more than 20 million visitors by 2025, according to the state tourism agency.

Many of the new visitors are young backpackers from Europe and Asia, drawn by Iran's history and culture. The most popular destinations include the ancient cities of Esfahan and Shiraz. It's also home to Persepolis, a UNESCO World Heritage site.

Many of those travelers are looking for budget accommodation, said Jalal Rashedi, who runs five hostels across the country. He offers bed and breakfast for as little as $15 a night, including internet access.

Trump keeps scaring investors away from Iran

"During the past few years we have had a rise in the number of tourists who are young, and they're individual travelers," he told CNN. "They're young, curious, adventurous people who want to discover the truth about Iran, and they mostly stay at hostels."

A World Economic Forum report earlier this year named Iran as the world's cheapest travel destination.

But travelers still face obstacles.

Americans, Brits and Canadians need to apply for a visa in advance, while citizens of many other Western countries can get one on arrival.

And because some sanctions remain in place, the country has few links to international banking networks and Western credit cards won't work there.

That means it can be difficult to make payments in advance to secure reservations. To get around that, Rashedi launched a website to allow travelers to make reservations at his hostels, and those operated by others, without payments.

-- Amir Daftari contributed to this report.

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Travel & Tourism - Iran

• By 2024, revenue in Iran's Travel & Tourism market is projected to reach US$3,623.00m.
• Based on an annual growth rate (CAGR 2024-2028) of 5.04%, the market is expected to grow, resulting in a projected market volume of US$4,411.00m by 2028.
• It is worth noting that in Iran's Travel & Tourism market, the largest market is the Hotels market, with a projected market volume of US$1,774.00m in 2024.
• By 2028, the number of users in this market is expected to amount to 17.94m users.
• In 2024, user penetration is expected to be 22.8%, which is predicted to increase to 26.7% by 2028.
• The average revenue per user (ARPU) is expected to be US$177.40.
• In Iran's Travel & Tourism market, it is projected that 75% of total revenue will be generated through online sales by 2028.
• It is worth mentioning that in global comparison, United States is projected to generate the most revenue (US$199bn in 2024).
• Iran's tourism industry is seeing a rise in interest from Western travelers, drawn to its rich cultural heritage and stunning natural landscapes.

Key regions: Malaysia , Europe , Singapore , Vietnam , United States

Definition:

The Travel & Tourism market encompasses a diverse range of accommodation services catering to the needs and preferences of travelers. This dynamic market includes package holidays, hotel accommodations, private vacation rentals, camping experiences, and cruises.

The market consists of five further markets.

• The Cruises market covers multi-day vacation trips on a cruise ship. The Cruises market encompasses exclusively passenger ticket revenues.
• The Vacation Rentals market comprises of private accommodation bookings which includes private holiday homes and houses as well as short-term rental of private rooms or flats.
• The Hotels market includes stays in hotels and professionally run guest houses.
• The Package Holidays market comprises of travel deals that normally contain travel and accommodation sold for one price, although optional further provisions can be included such as catering and tourist services.
• The Camping market includes bookings at camping sites for pitches using tents, campervans, or trailers. These can be associated with big chains or privately managed campsites.

Additional Information:

The main performance indicators of the Travel & Tourism market are revenues, average revenue per user (ARPU), users and user penetration rates. Additionally, online and offline sales channel shares display the distribution of online and offline bookings. The ARPU refers to the average revenue one user generates per year while the revenue represents the total booking volume. Revenues are generated through both online and offline sales channels and include exclusively B2C revenues and users for the above-mentioned markets. Users represent the aggregated number of guests. Each user is only counted once per year. Additional definitions for each market can be found within the respective market pages.

The booking volume includes all booked travels made by users from the selected region, independent of the departure and arrival. The scope includes domestic and outbound travel.

Prominent players in this sector include online travel agencies (OTAs) like Expedia and Opodo, as well as tour operators such as TUI. Specialized platforms like Hotels.com, Booking.com, and Airbnb facilitate the online booking of hotels and private accommodations, contributing significantly to the market's vibrancy.

For further information on the data displayed, refer to the info button right next to each box.

• Bookings directly via the website of the service provider, travel agencies, online travel agencies (OTAs) or telephone

out-of-scope

• Business trips
• Other forms of trips (e.g. excursions, etc.)

Travel & Tourism

• Vacation Rentals
• Package Holidays
• Analyst Opinion

Iran's Travel & Tourism market is experiencing significant growth and development, driven by various factors influencing consumer behavior and market dynamics. Customer preferences: Travelers in Iran are increasingly seeking unique and authentic experiences, driving demand for cultural and historical tourism. Tourists are drawn to the rich heritage and ancient sites in Iran, such as Persepolis and Isfahan's Imam Square. Additionally, there is a growing interest in eco-tourism, with travelers looking to explore the country's diverse landscapes, from lush forests to vast deserts. Trends in the market: One noticeable trend in Iran's Travel & Tourism market is the rise of domestic tourism. Iranians are increasingly choosing to explore their own country, contributing to the growth of the local tourism industry. This trend is influenced by various factors, including government initiatives to promote domestic travel and the development of infrastructure to support tourism within the country. Local special circumstances: Iran's Travel & Tourism market is also influenced by unique local circumstances, such as the country's geopolitical situation and international relations. Sanctions and travel restrictions have impacted the flow of international tourists to Iran, leading to a greater focus on domestic and regional tourism. The country's diverse cultural offerings and hospitable population continue to attract visitors despite external challenges. Underlying macroeconomic factors: The development of Iran's Travel & Tourism market is supported by underlying macroeconomic factors, including government investment in infrastructure and tourism development. Initiatives to improve transportation networks, enhance accommodation options, and streamline visa processes contribute to the growth of the tourism sector. Additionally, efforts to promote Iran as a safe and welcoming destination play a crucial role in attracting both domestic and international tourists.

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Data coverage:

Modeling approach:

Additional notes:

• Sales Channels
• Travel Behavior
• Global Comparison
• Key Market Indicators

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Tourism in Iran takes off

Iran’s tourism industry taking off as various international mass media is currently ranking it in the top 10 must-see destinations in the world and the government has set ambitious targets of welcoming 20 million visitors and $30 billion in revenue by 2025, figures similar to Thailand. Masoud Soltanifar, Vice President and Head of Cultural Heritage and Tourism Organization, reveals more about Iran’s flourishing tourism sector. 

With the JCPOA completed and sanctions lifted, the international community has never been as interested in Iran’s economy as today, despite growing regional tensions, IS terror and sliding oil prices. How have these events impacted the tourism sector in the Middle East?

Well, due to roughly five or six years or more of illegal and unfair sanctions imposed on our country, we have lost some economical opportunities. The determination of President Rouhani’s administration was that by considering mutual and national interests of the country, the sanctions will be lifted and our nuclear right recognized. We believe during the negotiations that lasted for about 30 months between Iran and the 5+1 countries, we achieved two important goals: firstly, we safeguarded our nuclear rights; the second goal was lifting the sanctions. Therefore Iran has new conditions. Iran has a population of 80 million. Iran stands at the common point between three continents, Asia, Europe and Africa. And it can have lots of economical opportunities for Western and European companies. In addition, we are located in an unsafe region but fortunately we have security. During the past two years the average development of the tourism industry was 4.6%, but now it reaches 12%, which means three times more than the international development in this section. These figures show that Iran is safe, and rich in culture, heritage, religion and tourist attraction places. Tourists use different means of transportation such as air, land, sea and railroad to travel to Iran. In the past two years we have activated transferring tourists by railroads. Many trains have come from Europe to Iran.

With these factors that I mentioned (security, culture, heritage, religion, and tourist attraction places) it has been announced that Iran is the most important tourism destination in 2016 by different international mass media and organizations. National Geographic, for example, described Iran as the first tourism destination. And some other media announced Iran as the fifth or 10th best tourism destination, as there is prosperity in the tourism industry and it will continue; in other sections we will see the presence of foreign investors.

The presence of tens of Western political and economical authorities since July 2015 indicates that our conditions have changed and economy has improved. The government is trying to reduce inflation. The government has been adopting different policies to pave the way for investment. We predict a good future although the oil price reduction has adversely affected our development plan.

Iran’s ambition is to reach 20 million visitors and $30 billion in revenue by 2025, figures similar to Thailand. What challenges do you expect in order to reach these targets and how do you plan to overcome them?

As you mentioned we have some plans like visa facilitation development, electronic visa issuance by the end of 2016. We are negotiating to abolish visas with more countries to facilitate the transferring of tourists between Iran and other countries. With cheap bank credits, supporting local private sector and foreign private section we will increase the number of our hotels. By some exemptions like building duty waivers we will facilitate the foreign investment section.

We have a comprehensive plan in the field of tourism improvement and hospitality services. Plans such as increasing the level of staff training, expansion of tourist attraction information offices in different countries, improvement in air transportation network through new contracts with Airbus and Boeing, improvement in airport network with building new terminals and improvement in road and railway networks and much more.

In what areas of the tourism sector are international cooperation and investments particularly welcome?

We prepared a condition in which under the foreign investment law, different Western investors can easily come and invest. We prepared an office to facilitate bureaucracy difficulties for investors. If needed our hotel building groups will join and cooperate with these investors to build new hotels and tourism installations.

And also in some cities the companies that want to build hotels will be exempted from the tax. There will soon be a great conference on foreign investment and tens of foreign companies especially in building new hotels will be invited. In that conference we will introduce our investment opportunities and facilities. We hope to sign a contract between Iranian private sections and Western countries.

Iran has opened multiple information offices all over the world to represent its touristic and business interests in countries such as Spain, Singapore, Switzerland, China, and many others. What strategy is Iran following and which countries have you identified to increase touristic visits and revenue?

Of all 196 independent countries in the world according to cultural, tourism, economical and religious relations, we have chosen 40. Of these 40 countries according to the order of priority we have three groups: 16 countries first priority, 14 countries second priority, and 10 countries third priority. 15 out of 40 are our neighboring countries. Some of them are European countries, which are interested in Iranian historical and cultural antiquities. Some Muslim countries, which are not our neighbors, are interested in religious places. The number of tourists from North and Southeastern Asian countries like Japan, South Korea, China, Thailand, and Malaysia has increased and we have a long-term plan for them. All in all, until the end of 2016, we will set up 25 tourist attraction information offices in these countries and we will sign partnership documents with some of them. Some tourism officials and ministers of these countries have traveled to Iran and I’ve also been to those countries. We hope to reach all our goals in 2025.

Countries like France, Great Britain, Belgium, Thailand and India all have national icons like respectively the Eiffel Tower, HM The Queen of England, the Atomium, the elephant, the Taj Mahal, etc. As the face and voice of Iran’s tourism sector, how would you best describe Iran?

Our main policy is cultural, historical and Halal tourism. They are three words. I mean developing cultural-historical, religious and natural tourism. The fourth word is health tourism. Iran has good capacity in health tourism because we have capable specialists in our country. Because of the high quality and low prices (one-third to one-fifth in comparison with European countries) health tourists for open heart surgery, organ transplants, incurable diseases, cosmetic surgery and infertility surgery are increasing in Iran. In these four fields that I mentioned and with building infrastructure we hope to achieve our goals in 10 years.

Also, I would like to mention that Iran has such a diverse climate in our country that in each season people can go skiing in one area and at the same day in another part of our country people can go swimming. The distance between these places that I mentioned is about 100km. Tourists are very interested in this diversity. On the other hand we have the hottest place on earth in our country. It is a place called Gandom Beryanak (the name of a place in the central desert of Iran). The temperature there is about 67°C. The warmest mineral hot water spring is in Meshkin Shahr (the name of a city in western part of Iran). The water temperature is 84°C. The tallest brick dome and the highest sand dune are also in Iran. 

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Iran’s Tourism Industry Sprouts despite US Sanctions

15/06/2020 by EOS Intelligence

Home WORLD ECONOMY Iran’s Tourism Industry Sprouts despite US Sanctions

For several years, the US sanctions on Iran continued to have a detrimental impact on the economic growth of the country, with tourism sector being severely affected throughout the period under sanctions. The 2016 sanctions removal brought many visible changes to the development of the country, with hopes for tourism industry to benefit from the potential influx of travelers and new opportunities for the industry players.

Iran’s tourism was severely affected by the US sanctions

Iran was in a quivering state for more than 35 years owing to the never-ending political tensions with the USA post the 1979 Iranian Revolution. This led to no formal diplomatic relationships between the countries since 1980, and considerable sanctions imposed on Iran over the years. The impact of these sanctions was visible through a range of profound economic problems such as inflation, unemployment, poverty, and underdevelopment of virtually all industries in the country.

One sector that faced severe repercussions of the sanctions was Iran’s tourism industry. A negative image of the country was reinforced by the mainstream media as a flag-burning, west-hating nation, a fact that caused a major dent to Iran’s tourism industry. Adding to it, lack of resources to tackle this negative discourse had further left Iran in an international isolation over all these years. Despite being rich in culture, natural history and landscapes, a country with such an image could not persuade foreign tourists to visit.

Moreover, the US sanctions drastically affected Iran’s economy, which resulted in lack of proper resources to establish a well-equipped transportation sector, including airlines, trains, and buses, which in turn led to Iran becoming even less attractive to tourists. In addition, lack of proper hospitality infrastructure such as hotels, restaurants, roads, etc., further negatively impacted international tourists’ interest in Iran. Adding to it, the US sanctions also created greater tensions between Iran and the USA which led the US government to issue a travel advisory over all these years, which restricted its citizens to travel to Iran due to safety risks, such as getting kidnapped or arbitrary arrest and detention in the country. Thus, this resulted in almost no tourist from the western countries visiting Iran.

Iran’s tourism sector did witness a very modest growth over the years, largely thanks to pilgrimage tourism visiting the shrines and originating mostly from regional countries such as Iraq, Azerbaijan, and Turkey.

According to The World Bank data, the number of international tourists’ arrivals in Iran fluctuated, increasing from 2.7 million in 2006 to just 4.9 million visitors in 2014. Iran’s tourism industry was suffering particularly badly not only from the lack of arrivals of American tourists, but generally more affluent, well-spending tourists from western hemisphere, who were universally deterred by sanctions, poor state of the tourism infrastructure, as well as the negative image of the country created by international media.

According to official figures by Iran’s Culture Heritage Organization, during the sanctions period, tourism sector contributed around 2.0% to the country’s GDP (an average of US$7.5 billion in a year), leading to sluggish infrastructural development throughout that period. Iranian tourism sector’s hopes for change and better growth started budding when Iran signed a nuclear deal with six countries in July 2015, an event that led to the US sanctions being finally lifted.

The nuclear deal came as a ray of hope

Even before the US government removed the sanctions, the country started witnessing a slight increase in the number of foreign visitors. This was thanks to the nuclear deal signed between Iran and a group of six countries (the permanent members of the United Nations Security Council – Russia, France, UK, USA, and China, plus Germany) and the EU in July 2015. The deal included Iran’s commitment to restricting its nuclear activities, agreeing to keep check on the uranium stockpile, among other agreements.

The deal immediately mellowed down Iran’s negative image and released a positive message of lowered risks associated with visiting the country. This gave a slight boost to the tourism sector with a moderate growth of 4.5% with 5.2 million foreign tourists visiting the country in 2015, the highest arrivals number till date.

Another upward push on the growth trajectory came the following year, when the US government removed sanctions from Iran in January 2016, as part of the nuclear deal. This was expected to have a major impact on tourism sector as it offered hope for much needed economic stimulation, along with investments and development in the economy, and tourism sector in particular.

Post lifting of sanctions, tourism sector rejoiced with developments

The nuclear deal and removal of sanctions brought growth to the tourism sector, owing to removal of restrictions on imports of financial and transportation-related services. As a result, some European airlines, such as British Airways and Lufthansa, resumed direct flights to the country. As visa requirements were increasingly relaxed, tourists from western countries started to arrive. This in turn slowly raised the demand for accommodation leading to skyrocketing prices of hotel rooms. These changes finally generated higher income for local businesses such as hotels, restaurants, tourist guides, local transportation providers, and other players in the market. Iranians excitedly welcomed foreign tourists, including the Americans, along with the positive outlook for the sector’s growth.

The Iranian government, following the sanctions removal, initiated efforts to attract foreign investments with a clear agenda of reducing Iran’s oil dependency and boost the country’s economy, by betting on increasing revenues from tourism sector.

The initiatives included the launch of a scheme called “100 Hotels, 100 Businesses” that outlined 174 projects to be introduced to investors interested in hotel construction. This is was an ambitious scheme led by the Iranian government focusing on bringing the hotel industry of the country back on track. This scheme aimed at attracting investments for the construction of 100 hotels across 31 provinces with priority given to most popular regions such as Tehran, Kashan, or Mashhad. Also, through this scheme, the government focused on initiating joint ventures with foreign companies, benefiting both the government and foreign investors.

The government also announced other major plans for the development of tourism industry. These included creating regulations to facilitate investment, creating brands of hotels and restaurants, promoting new types of tourism such as sports, climate, and industrial tourism, developing knowledge-based human resources, creating a comprehensive system of standards, balancing inbound and outbound tourism by improving political relations, and creating a system for the protection and restoration of historical and natural sites.

The Iranian government further assured about the transfer of capital and profits overseas as per the foreign investment law of the country and full protection for the investors against any non-commercial risks such war or border conflict, confiscation or corruption, etc.

The government also started working on changing the image of the country and its tourism industry in the eyes of potential foreign visitors. One major change to this was to allow increased access to the internet, e.g. over social media, for the local players, which gave the restrained westerners a far greater insight into the country without the filters added from the mainstream media.

These efforts undertaken by the Iranian government were welcomed by several foreign investors, as they brought a sense of encouragement and stability to prospects of investing in the country.

This soon led to emergence of international hotel chains, the first being Novotel (296 rooms) and Ibis (196 rooms) hotels by the French hospitality company Accor which came to Tehran already in 2015. The company’s chief executive Mr. Bazin, at the launch of the venture, was optimistic in bringing up the chain of budget hotels such as Ibis and mid and upmarket hotels such as Novotel, Sofitel, and Pullman in 20 cities of Iran, but with no particular timeline given. Another hotel that came up in 2017 was Spanish Melia in Caspian Sea in 2017, built in partnership of Melia and its Iranian partners in Tehran, where the Iranians invested more than US$250 million while the management is taken over by Melia. The hotel includes 319 luxurious rooms, two residential towers, a sports center, and other services in an area of 18,000 square meters. Similarly, the Abu Dhabi’s Rotana Management Corporation planned to open four hotels in Iran’s major cities, Tehran and Mashhad, two in each. One of the hotels (a five-star hotel with 275 rooms and suites in Mashhad) was built within one year in 2017.

Overall, investments in the tourism sector started growing at a moderate level post the removal of US sanctions. According to World Tourism and Travel Council (WTTC) data on the capital investments in Iran’s tourism sector, 2016 witnessed an investment of US$2.75 billion contributing 3.25% of all investments in the country, as compared to the investment of US$2.63 billion in 2015. Since then, capital investments have been growing and are estimated to reach US$3.75 billion in 2028 with a share of 4.86% of all investments.

As a result of increased investments and rise in tourism sector, the GDP of the country also witnessed a slight growth. According to WTTC data, tourism industry’s share in the country’s GDP increased to 7.1% in 2015 contributing US$26.04 billion, up from 6.5% (US$24.38 billion) in 2014. However, it stabilized in the following years (6.8% in 2016, 6.4% in 2017, and 6.5% in 2018), with expected contribution to GDP of 6.52% amounting to US$35.39 billion by 2028. With developments in the tourism sector, the ministry of tourism is hoping to host nearly 20 million tourists per year by 2025.

But as the country started seeing benefits of the sanctions removal, with its improved economy thanks to rise in export and import, infrastructural developments, increase of foreign investments from 2016 to mid-2018, and boost in tourism sector and many other industries, the US government shocked the country by re-imposing sanctions in August 2018. The re-imposition was a consequence of the USA withdrawing its participation from the nuclear deal in May 2018 over political differences. This brought a blow to the Iranian economy with restrictions over imports and exports, thus again leaving Iran in economic struggle due to recession through shrinking oil exports.

EOS Perspective

The economic trembles coming from crude oil export ban led the Iranian government to increase its focus on tourism industry to offset the lost revenues. While American tourists are again restricted to travel to Iran, the country is still witnessing an increased influx of tourists from other regions, including the Middle East and Asia, a fact that cushions the impact of re-imposed sanctions.

Although a blessing in disguise for Iran, one of major reasons for the rise in tourism despite the US sanctions was the almost threefold fall of Iranian currency against US dollar which made travelling to Iran a low-cost affair for many foreign tourists, especially in comparison to other Middle Eastern destinations. This has contributed to the foreign tourists’ influx especially from the western countries – tourists with budget constraints as well as tourist arriving for medical tourism purposes. At the same time, the fall in rial value against the US dollar increased travel expenses for Iranians going overseas. This has constrained the outbound tourism, resulting in a decrease of 6.5% during 2018 (March 21- June 21 of Iranian Calendar).

The weakening of the currency was just one of the reasons that contributed to the slight growth in the Iran’s tourism sector, despite the US sanctions. The country continued to communicate its selling points and positive image to foreign audiences. Iran has been working on reinforcing its position as destination of religious pilgrimages, place with improved infrastructure, natural landscape, and cultural history. Through these messages on social media, the country seems to have attracted various sorts of tourists, from leisure travelers to artists to businessmen and more, resulting in growth of the industry.

According to deputy minister of the Cultural Heritage, Handicrafts and Tourism of Iran, the number of tourists’ arrivals increased by 24% during the first seven months of 2019 (starting from March 21 as per Iranian Calendar) compared to the same period previous year. In terms of tourists’ arrivals numbers, between March 2018 to March 2019, Iran witnessed 7.8 million foreign tourists visiting the country as compared to 4.7 million tourists from March 2017 to March 2018.

Encouraged by the growth in the sector, Iranian government undertook further initiatives to ensure the inflow of foreign visitors continues (and increases). In August 2019, a functionalized center was established in Cultural Heritage, Handicrafts and Tourism Organization, with a task to make decisions on reducing the negative impact of the US sanctions on tourism industry.

Following the US State Department’s warning (issued in May 2018) against travelling to Iran, citing it being an unsafe travel destination, the risk of fall of other western tourists’ arrivals increased. The Iranian government, to compensate for the fall, focused more on attracting tourists from regional countries. For instance, visa fees for Iraqi tourists (accounting for 24% of inbound tourists in 2018) were removed, while visas for Omanis were waived off.

Iran is also looking for tourists in more remote markets, especially in countries that are known to frequently stand against the USA in the international area. China is one such market which Iran is hoping to attract leisure tourism from by allowing visa-free entry of the Chinese nationals into Iran as of July 2019. Iran has an ambitious plan to increase the number of Chinese visitors from just over 50,000 in 2018 to 2 million in 2020.

Furthermore, in order to encourage foreign tourists to visit Iran, the Iranian government decided not to stamp their passports to help them avoid issues with subsequent attempts to travel to the USA. Additionally, the government is also trying to spur medical tourism by developing health tourism hubs, especially in Shiraz with a vision to increase the tourists travel for medical purposes as well.

These measures have been quite successful in promoting Iranian tourism growth, even though the American and other western visitors have (to some extent) been replaced with arrivals from the Middle Eastern and Asian countries. However, looking at the current situation of unrest, with the killing of Iranian general Qassem Soleimani in January 2020 by US military, and Iran responding to this with missile attacks on the US military troops in Iraq less than a week later, the conflict between the two countries is nowhere near its end. This political unrest, if continues, has a potential to again severely affect Iran’s tourism industry, as the country will be unable to grow the sector without reliance on western visitors. Tourists’ sentiments are tightly linked to political climate; therefore, it can be expected that only improved relations with the USA, and through this a better image, will allow Iran to truly develop its tourism industry and its economic situation in general.

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IRAN REVEALS SIGNIFICANT INCREASE TO TOURISM BUDGET FOR 2022

Iran has voted for a significant increase in its national tourism budget for 2022.

The national budget bill for the next Iranian calendar year (starting on March 21, 2022) proposed to provide around $511 million the Ministry of Cultural Heritage, Tourism, and Handicrafts.

If fully adopted, the proposed budget would represent an increase of 54% compared to the current year’s budget, according to a statement from the Ministry. Talking to the country’s elected assembly (Majlis), Iranian President Ebrahim Raisi declared that “on next year’s budget bill, production and employment are the pivots”.

The Islamic Republic expects to further promote tourism as it is considered a major asset for the country’s economic development. In the budget, the government speaks of promoting numerous tourist spots such as bazaars, museums, mosques, bridges, bathhouses, madrasas, mausoleums, churches, towers, and mansions. UNESCO already lists 26 Iranian sites on its World Heritage list. Among the most prestigious are the Royal Mosque, the Friday Mosque, the Mosque of Sheykh Lotfollah, the Portico of Qaysariyyeh and the 15th-century Timurid palace in Ispahan. Or the ancient city of Persepolis.

Under the 2025 Tourism Vision Plan, Iran aims to increase the number of tourists from 3.6 million in 2016 to 20 million in 2025, according to the Ministry of Cultural Heritage, Tourism and Handicrafts.

Iranian handicrafts and medical tourism

Handicraft is another priority in the country’s tourism strategy. The unique geographical location of Iran, which has served as a bridge between the East and the West, together with its diverse climatic conditions and various raw materials available, have caused the flourishing of many arts and crafts in this country, throughout its long history.

Persia, now known as Iran, is famed for the production of textiles, carpets, glazed tiles, ceramics, jewellery, marquetry or enamel objects. With 14 entries, Iran ranks first globally for the number of cities and villages registered by the World Crafts Council.

Important opportunities are also seen for medical tourism in the country. Many experts believe that it is a win-win opportunity both for the country and foreign patients, as they are offered affordable, yet quality treatment while the country gains considerable foreign currency.

The country is one of the major destinations for health tourism in the region, and patients from 55 different nationalities, mostly from neighbouring countries including Iraq, Kuwait, Bahrain, Qatar, Saudi Arabia, Oman, Pakistan, Afghanistan, Tajikistan, and Turkmenistan, are seeking to use Iran’s medical services and facilities.

Iran’s two most popular medical tourist cities are Tehran and Mashhad. A variety of services such as surgery for eyes, cardiovascular surgery, orthopaedics, oncology, bone transplantation are available throughout the country.

According to the medical tourism department at Iran’s Ministry of Health, in 2018-2019 Iranian hospitals welcomed almost 70,000 foreign patients resulting in a total spend of around US$1.2 billion. The Iranian government has now set an ambitious goal to attract around two million medical travellers per year.

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Iran’s tourism among top 20 countries

Iran draws 7.1m foreign tourists amid hostile campaigns.

Focusing on Iran’s tourism sector is seen as a catalyst for economic growth and reducing dependence on oil revenues. This effort stimulates economic advancement, creates jobs, and involves various industries. Similar to trade, tourism relies on supply and demand and its success could trigger a chain reaction, boosting related businesses, especially micro-enterprises. Such a positive impact could spread across different economic sectors. Tourism can be beneficial for achieving regional balance and sustainable progress in growing areas. It also helps remote regions overcome challenges. Statistics show that each tourism project provides employment for about ten people on average. In some countries, tourism incomes even surpass total tax earnings. That’s why, the Iranian government emphasizes tourism in its development plans. Despite recognizing its importance, Iran has lagged behind neighboring countries in tourism. The country’s 7th Economic Development Plan highlights growing the tourism sector and the Ministry of Cultural Heritage, Tourism, and Handicrafts aims to attract 15 million tourists annually. President Ebrahim Raeisi has stressed the need to tap into Iran’s potential and attract foreign visitors to reach the ambitious target of 15 million. His vision includes family-focused tourism, easing visa requirements with target nations, and encouraging private-sector investments. The government prioritizes tourism, promoting collaboration across sectors to advance the industry as the concerted effort seeks to propel Iran’s tourism landscape forward. In recent years, tourism’s role in Iran’s economy has undergone significant shifts, as highlighted by the World Travel and Tourism Council (WTTC) report. From contributing 3.1% of the total economic activity in 2020, tourism’s share in Iran rose to 4.6% in 2022. Conspicuously, Iranian tourists spent an impressive $33.3 billion in 2021, ranking Iran 16th globally for tourism expenditures, trailing behind prominent players like the United States, China, Germany, and more. The headway in domestic tourism spending signals Iran’s ascent in the international tourism ranking, a result of the current government’s focus on promoting both internal tourism and ties with neighboring nations. As the tourism sector prospers, the potential for employment generation within Iran surges, rising by 11.2% in 2022 alone and employing around 1.44 million people. By the end of 2022, the broader tourism sector’s share in Iran’s overall employment reached 6.1%.

Tourism’s contribution to GDP

Iran’s tourism sector experienced remarkable growth in 2022, with a growth rate surpassing 39%, amounting to approximately 454 trillion tomans. This sector contributed 6% to the GDP prior to 2019 and is projected to reach 313 trillion tomans by 2028, as per the World Bank’s data. Foreign tourists’ financial engagement also saw a substantial rise, with expenditures of $6.2 billion in 2022, marking a 73.5% increase from the previous year. This surge is a significant improvement from the $2.5 billion spent by foreigners in 2021, resulting in a total expenditure of $8.7 billion. Considering domestic tourism, Iranians spent 225 trillion tomans on local trips in 2021, which rose to over 316 trillion tomans in 2022, showing a substantial 40.1% year-on-year increase. These statistics underscore the growing impact of tourism on Iran’s economy, emphasizing the sector’s potential for economic advancement.

Revival of Iran’s tourism with 40% growth

The WTTC’s report on Iran reveals a significant resurgence in the country’s tourism sector over the past two years. In 2020, the sector faced a substantial setback with a 45% drop in its contribution to the GDP, but in 2021, it rebounded remarkably, growing by 40% within the national economy. Analyzing the council’s statistics, it’s clear that Iran’s tourism gained prominence in 2022, with a 39.2% upsurge. This led to the tourism industry contributing 4.6% to Iran’s total economic activity, amounting to 454 trillion tomans. This value closely aligns with the pre-pandemic figure of 499 trillion tomans from before the 2019 Coronavirus outbreak.

Attracting 7.1m foreign tourists in 2 years

With the new Iranian government taking office in August 2021 and the vaccination campaign, the tourism industry resumed operations after a two-year hiatus. The first steps included vaccinating hospitality and tourism employees, prioritizing accommodations and hotels, and implementing strategic tourism policies while following health protocols. Despite initial contractions in 2021, the sector experienced a commendable turnaround. In the final quarter of 2021, Iran’s tourism industry rebounded by 40%, and foreign visitors injected $2.5 billion into the economy during this period. This outpaced the global growth rate of 21.7% for the same timeframe. The revival gained momentum, especially in the first quarter of 2022, with the removal of restrictions on foreign tourist visas. Collaborative efforts between the Ministry of Cultural Heritage and the Ministry of Foreign Affairs led to the resumption of inbound tourism routes. Iran’s tourism sector has showcased resilience and growth, signaling a positive trajectory for the country’s economy and global engagement in the post-pandemic era.

Iran’s portion of 6% of Mideast tourists  

The United Nations World Tourism Organization (UNWTO) reports a remarkable surge in foreign tourist arrivals to Iran in 2022, with 4.1 million visits recorded, a 315% growth compared to the previous year. Despite this impressive increase, Iran’s share of global foreign tourist journeys remains modest at 0.4% for 2022. This growth stands in stark contrast to the declines experienced due to the COVID-19 pandemic in 2020 (83% drop) and 2021 (around 30% contraction). The Middle East region as a whole saw a significant upswing, with 66 million foreign tourist journeys in 2022, a 163% rise from the previous year. Iran’s portion of the total foreign tourists entering the Middle East is approximately 6%, indicating progress while highlighting further growth potential.

Tourism diplomacy

Under the current government, Iran has shifted its foreign policy toward enhancing relations with neighboring countries, resulting in a focus on tourism development and collaboration. The Ministry of Cultural Heritage emphasizes shared cultural ties, leading to measures such as abolishing visa requirements, improving access to tourist sites, and promoting budget-friendly options. Joint cultural events and bilateral agreements with nations like Nigeria, Iraq, Pakistan, Tajikistan, Azerbaijan, Kazakhstan, and Armenia further illustrate this approach. This diplomatic outreach has shown results, with a decline in tourists from traditional markets (Europe and North America) but a boost in visitors from neighboring countries, particularly those with Islamic cultural affinities. The influx of Chinese and Russian tourists has also risen compared to previous years. As Iran’s tourism industry grows through strategic partnerships and policy changes, it continues to tap into the potential of its proximity to neighboring nations and shared cultural commonalities.

Countries with most tourists

In 2021, Turkish tourists accounted for over 15% of Iran’s foreign tourist influx, securing the second spot after Iraq with approximately 35%. This was a notable increase from the previous year’s 9% contribution from Turkish visitors. Pakistan had a 10% share, Azerbaijan contributed 9%, and Kuwait held 2%, while other nations made up 29% of foreign tourist visits in Iran. In 2022, a shift occurred with Iraq contributing 55% of foreign tourists, followed by Azerbaijan and Turkey at 6% each, Pakistan at 5%, and Kuwait at 2%, with nearly 98% of them visiting Iran for pleasure.

40% increase in domestic trips

The year 2022 marked a turning point with the arrival of Nowruz, signaling a departure from the pandemic’s grip and inspiring nations to embrace tourists more warmly. A travel service coordination headquarters was established to facilitate these efforts, involving 23 executive bodies. The tourism industry saw promising growth, with official records showing over 52 million overnight stays in authorized lodging centers, indicating a 40% increase compared to figures from two years prior. Nowruz 2023 continued this positive trend, witnessing a remarkable 57 million domestic travelers seeking accommodations in authorized centers. This occurred despite heightened Iranophobia measures and negative campaigns, reflecting the industry’s resilience. Despite challenges, the past two years have attracted 7.1 million tourists to Iran, defying predictions of collapse and showcasing the industry’s vitality.

90% occupancy of hotels

In recent years, the tourism sector faced significant challenges due to the COVID-19 pandemic and economic sanctions. Despite these difficulties, the industry has shown positive shifts through containment efforts and strategic adaptation to health protocols. This was particularly evident during the 2022 Nowruz celebrations, reflecting pent-up travel demand accumulated over three years. This positive trajectory continued into 2023, with an unprecedented surge in hotel and accommodation center visits, resulting in an average occupancy rate exceeding 90%. Recreational facilities, museums, and historical sites also experienced substantial activity, maintaining an average above 80% compared to the corresponding timeframe.

Iranophobia, enemy’s plan to target tourism  

Examining campaigns to paint an insecure picture of Iran, it’s evident that one of the sectors that could bear the brunt of such conditions is the tourism industry. Iran’s Leader emphasized in 2022 that adversaries intend to hinder sectors, including tourism, using Iranophobia. These forces aim to suppress Iran’s tourism growth, employing bias to undermine progress and competition with regional rivals. The battle against Iranophobia is crucial, aiming to present a secure and magnificent Iran to the world. This effort remains a focus of the incumbent government and officials from the Ministry of Cultural Heritage, Tourism, and Handicrafts. While the industry faces hardships, the potential to showcase Iran’s beauty, magnificence and security through tourism is essential in countering negative perceptions and promoting progress.

Iran's tourism industry is growing

Tehran (IP)- The spokesman for the Iranian government said employment in Iran's tourism industry had increased by 5.1 percent last year and that foreign tourists had spent $ 2.5 billion in Iran.

Iran Press /  Iran news:  "The latest report from international organizations shows that Iran's tourism industry, which has been down by 45% in 2020, grew by 40% in 2021," Ali Bahadori Jahromi, the government spokesman, tweeted.

Employment in the industry has also increased by 5.1 percent, and foreign tourists have spent $ 2.5 billion in Iran.

The World Travel and Tourism Council has announced a 21.7% growth in the world tourism industry in 2021.

In 2020, due to Corona restrictions, the industry shrank more than 50 percent, and 4900 billion dollars reduced the value of the sector, but in 2021, with the ease of Corona restrictions, $ 1000 billion has been gained through tourism in the world economies.

The share of tourism in the economy of Iran in 2020 was more than 3%, which in 2021 has exceeded 4%. With the boom in tourism, the employment rate in the industry in Iran has also increased.

12th edition of intl. Marine Industries Exhibition underway in Iran's Kish

Iran has become destination of tourists once again

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Iran Tourism Statistics

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Iran IR: International Tourism: Number of Arrivals

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Explore our Data

Iran’s Tourism Industry Marks Steep Decline

At the peak of the social and economic crisis, official reports indicate an unprecedented decline in domestic tourism in Iran. The latest report, published by the Iranian Statistical Center, shows that the number of domestic trips in 2021 decreased to a fourth of the domestic trips taken in the spring of 2019. The COVID-19 pandemic is the most important factor in the decline of domestic travel in the year 1400 (2021-2022). But close examination of these changes in the 1390s decade shows that severe economic crises have also reduced domestic tourism. 

• The 10 BRICS+ nations account for half the world’s population and two-fifth of trade—and include major energy producers and importers. Twelve more nations have applied.
• The bloc is starting to build institutions with important implications for energy trade, international finance, supply chains, and technological research.
• Global companies will need to factor geopolitics into their investment strategies and strengthen their capacity to capture the opportunities and mitigate the risks of BRICs expansion.

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International Trade

/ article, an evolving brics and the shifting world order.

By  Daniel Azevedo ,  Saurabh Bakliwal ,  Cinthia Chen ,  Marc Gilbert ,  Iacob Koch-Weser ,  Nikolaus Lang , and  Michael McAdoo

Key Takeaways

As attention focuses on wars in Eastern Europe and the Middle East and mounting tensions between the world’s great powers, a structural shift in the global order has been quietly underway. Large developing nations are exerting greater influence in world economic affairs and are beginning to build alternatives to Western-led institutions.

At this movement’s core is a formal intergovernmental grouping known as the BRICS+. The grouping includes five longstanding members—Brazil, Russia, India, China, South Africa—as well as five that joined in January 2024 or have been invited: Egypt, Ethiopia, Iran, Saudi Arabia, and the UAE. Together, these ten nations account for around 40% of both crude oil production and exports. They also account for one-quarter of global GDP, two-fifths of global trade in goods, and nearly half of the world’s population. Adding another dozen nations that have applied for membership, including dynamic emerging markets such as Thailand, Vietnam, and Bangladesh, would raise the group’s share to one-third of global GDP.

A larger BRICS challenges the dominance of existing global institutions, such as the World Bank and the International Monetary Fund, that are strongly influenced by the West. It also further weakens the relevance of the G-20, a grouping founded in 1999 to seek economic policy alignment among the largest industrialized and developing economies. Indeed, the G20 is fraying at both ends: its seven most economically advanced members are strengthening their ties through the G7, while its six large developing economies are asserting their own voices within BRICS+. (Exhibit 1.)

BRICS+ creates a forum that, at minimum, gives emerging markets the opportunity to align on global topics and new opportunities to promote mutual economic development and growth. And it’s evolving steadily. As it begins building political and financial institutions and a payment mechanism for executing transactions, there are important potential implications for the future of energy trade, international finance, global supply chains, monetary policy, and technological research. As a result, global companies will need to factor these new geopolitical and economic realities into their investment strategies. They should also strengthen their capacity to capture the opportunities and to mitigate risk that they engender.

How BRICS+ Has Evolved

Leaders of the original BRICS nations held their first summit in 2009 to discuss reforming international financial institutions, which they believed did not adequately address the interests of the Global South. Aside from the United Nations and G20, which included all five BRICS, there was no major forum where emerging markets could discuss their own economic and geopolitical agendas. Development assistance and funding for infrastructure through financial institutions established largely by Western powers after World War II often came with challenging strings attached.

There has been skepticism from the beginning over whether BRICs would evolve into a functioning bloc. But over the years, these nations have been drawing nearer to each other economically. Trade in goods among BRICS economies has considerably outpaced trade between the BRICS and G7 nations, leading to greater intra-BRICS trade intensity. (Exhibit 2). Decades of rapid growth have also given many of these economies far more weight in the global economy, both as producers and consumers. (Exhibit 3.) Because many of these nations are engaged with both advanced economies and China, which is perceived as an economic and trade superpower, they can create another coalition less dependent on the West.

Recent crises have added momentum to BRICS expansion. Several big developing nations that are aligned with neither NATO nor Russia resisted pressure to adhere to Western-imposed sanctions on Moscow in response to the invasion of Ukraine. Others have complained that G7 nations’ initiatives to combat climate change and the COVID-19 pandemic did not take their needs into account. BRICS+ institutions have been slowly evolving through regular meetings, joint initiatives, and formal bodies.

Yet grounds for skepticism over BRICS+’s capacity to become an effective institution remain. This grouping includes countries that are very diverse in terms of political systems, institutional frameworks, economic models, and cultural backgrounds. It even includes geopolitical rivals; for example, relations between Saudi Arabia and Iran, as well as between China and India, remain strained. A so-called “China shock” of low-cost exports of everything from steel and chemicals to machinery could also raise trade tensions within the group. The expansion, moreover, is heavily tilted toward the Middle East, so further regional balance may be required as the group grows.

Five Ways BRICS+ Can Shift the World Order

BRICS+ could make a significant global impact in the following five areas.

Energy. BRICS+ brings together both some of the world’s biggest energy producers and buyers. With the addition of Iran, Saudi Arabia, and the UAE, BRICS+ member states account for around 32% of world output of natural gas and 43% of crude oil. If Kazakhstan, Kuwait, and Bahrain are admitted, those shares will rise further. BRICS+ nations also account for 38% of global petroleum imports, led by China and India. If all new applicants are admitted, that would rise to 55%. (Exhibit 4.) During times of volatility in energy markets, having many of the biggest energy buyers and sellers within the same group could give rise to a parallel energy trading system. That would allow for transactions among BRICS+ economies outside the Western-led financial system and potential future sanction programs, and it would perhaps give them the ability to influence oil prices.

Trade networks. Trade has been a major driver of the economic development of BRICS+.   The share of global trade in goods transacted among the group’s current members more than doubled, to 40%, from 2002 through 2022. This trend becomes clearer when looking at the increasing dependence of specific BRICS+ economies on trade with fellow BRICS+ members. China’s growing role as a supplier of industrial and consumer goods, as well as an importer of commodities, has been a key force for integration. China has become a major market for Brazilian soybeans and iron ore, for example, and a major exporter of advanced goods such as electric vehicles, solar panels, and heavy machinery. Western sanctions relating to the war in Ukraine, moreover, have led to the diversion of Russian exports to BRICS+ markets, notably China and India.

Although a handful of BRICS+ members have free trade agreements (FTAs) with each other through blocs such as the Gulf Cooperation Council and Pan-Arab Free Trade Area, there is currently no FTA covering the entire ten-nation group. India withdrew mid-negotiation from Asia’s Regional Comprehensive Economic Partnership, which includes China. BRICS+ could, however, serve as a forum for widening intra-BRICS+ market access in various ways. It already convenes a Digital Economy Working Group, for example, and has established a framework for promoting cooperation in professional and business services trade.

Infrastructure and development financing. The greatest progress so far in BRICS+ institution building has been in project and development finance. The New Development Bank (NDB), capitalized at $100 billion, largely complements China’s Belt & Road initiative. Egypt, India, Russia, Saudi Arabia, and UAE are also shareholders in the China-led Asian Infrastructure & Investment Bank (AIIB) and have received loans from it. By 2023, the NBD and AIIB combined had committed more than $71 billion in credit across a range of sectors, including infrastructure, public health, and clean energy. (Exhibit 5.) Such projects generate significant revenue for BRICS+ companies. The addition of Saudi Arabia and other cash-rich economies, moreover, could expand and diversify the financial resources of BRICS+.

Monetary policy . BRICS+ countries are keen to develop greater independence from the Western-led international monetary system. Approximately 90% of global foreign exchange transactions are conducted in dollars and flow primarily through US and European banks. Western financial sanctions on Russia underscored the powerful systemic influence the US still holds through Bretton Woods institutions and its central role in the global financial system. Because BRICS+ includes leading commodity exporters and importers, however, the group can become a conduit for foreign exchange transactions in currencies other than US dollars. The NDB, for instance, has issued about one-fifth of its loans in Chinese yuan. Russia, China, and other BRICS+ members also aim to promote digital currencies. The group has launched the beta version of a payment app—BRICSpay—that enables transactions in several non-dollar currencies. That could help nations ease reliance on the US and make them less vulnerable to sanctions and foreign exchange volatility during financial crises. From a governance perspective, BRICS+ has established the Payment Task Force, the Think Tank Network for Finance, and the Contingent Reserve Arrangement, establishing a pool of reserves that can be used in place of IMF funds to help nations address financial crises.

Technological cooperation. Space is an overlooked dimension of BRICS+ collaboration. There is a BRICS+ Space Cooperation Joint Committee, supported by longstanding partnerships between Russia and China and China and Brazil. BRICS+ has also established a Partnership on New Industrial Revolution and a Center for Industrial Competencies. These initiatives aim to spur cooperation and innovation in leading-edge technologies in areas such as intelligent manufacturing, artificial intelligence, digitization, and clean energy. The efforts could help more emerging markets get in on the ground of new technologies, improve their capacity to create intellectual property, and adopt alternative technical standards.

The Implications for Companies

An expanded BRICS presents risks as well as opportunities for business. Companies should anticipate that BRICS+ will develop more formal institutions and agreements in the years ahead and begin planning for such scenarios. Companies should consider action in five areas.

• Develop a BRICS-for-BRICS go-to-market strategy. BRICS+ markets are likely to experience significant growth over the next decade. While the group lacks formal trade and investment agreements, it already has substantial, growing intra-BRICS trade. BRICS+ markets could become valuable gateways for companies seeking to expand to other emerging markets. The success of China-made EVs in BRICS+ markets is a good example of how companies can customize offerings to reach consumers across the member countries.
• Leverage the infrastructure boom. BRICS+ is likely to see significant infrastructure investment, which will improve the business environment and connectivity. Transportation, digital communications, energy, and other projects will generate demand for global companies and provide opportunities for investors. The NDB, for example, is funding 15 transportation infrastructure projects across the Indian subcontinent.
• Adapt “China + 1.” Many companies are pursuing supply chain strategies that seek to strike a difficult balance. They want to keep leveraging China’s many competitive advantages in manufacturing. But they also need to mitigate risks, react to shifts in relative costs, and gain access to government incentives for reshoring or near shoring. In a more multipolar world, companies could consider building supply chains that can leverage the BRICS+ economies. That could make them more resilient to geopolitical and trade shocks.
• Refine risk and compliance. Economic sanctions, such as those stemming from the war in Ukraine, and US-China technological competition are heightening legal, operational, and reputational risks for companies. A recent BCG survey of 250 risk and compliance officers found that geopolitical risk is now a top-five concern, up 15 spots from a prior survey. Most sanctions have emanated from Western countries. In the future, BRICS countries could coordinate a mutual “non-sanctioning” posture while also seeking to avoid the Western-led financial system. Multinational companies should account for this scenario when managing their import and export global supply chains, exchange rates, third-party screening, and risk and compliance needs. While companies will need to comply with Western sanctions, they can do so in ways that don’t hamper potential BRICS-for-BRICs value chains.
• Build geopolitical muscle. During the period of relative peace that followed the end of the Cold War, business leaders had limited need to assert themselves in global political and security issues. These days, geopolitics is increasingly uncertain and volatile. Executives need to prepare for a wide range of scenarios that could impact their operations, supply chains, consumers, and brands. They need to factor geopolitics into their capital-allocation decisions and strategic planning. Leaders should also build geopolitical sensing capabilities across their business units, functions, and regional managements to balance business efficiency with risk mitigation.

Recent years of new geopolitical tensions, economic ambition and instability, trade wars, and a pandemic have clearly brought lasting, structural change and challenges to the business landscape we once knew. The growth of the BRICS+ shows that, after decades of strong economic development, emerging markets are now ready for a larger role in the world order, one that better reflects their interests. Companies that adapt to this movement will be more likely to thrive in an evolving era of multipolar competition.

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Managing Director & Senior Partner; Global Vice Chair, Global Advantage Practice

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Canada imposes further sanctions against Iran

From: Global Affairs Canada

News release

Today, the Honourable Mélanie Joly, Minister of Foreign Affairs, announced that Canada is imposing additional sanctions against Iran under the Special Economic Measures (Iran) Regulations.

April 25, 2024 - Ottawa, Ontario - Global Affairs Canada

Today, the Honourable Mélanie Joly, Minister of Foreign Affairs, announced that Canada is imposing additional sanctions against Iran under the Special Economic Measures (Iran) Regulations .

Iran continues to threaten international peace and security through multiple destabilizing activities across the Middle East region and beyond. Iran poses a threat to the region both through its armed forces and through its support for its proxies, which includes funding, arms provision and training and political and ideological support.

On April 14, 2024, Iran launched a broad and first-ever direct attack on Israel. Iran’s Islamic Revolutionary Guard Corps (IRGC) took responsibility for launching drones and missiles while Iranian proxies, including the Houthis, Hezbollah and Iran-linked militias in Iraq, also launched strikes in a limited but highly coordinated manner.

This attack against Israel is yet another example in a pattern of Iran’s malign influence in the region, including through its proxies, and it risks further escalation, which poses a grave threat to regional and global peace and security.

Canada is imposing these sanctions in coordination with G7 allies, including the United States and the United Kingdom, who are taking similar action today. It reiterates its strong condemnation of Iran and its activities and calls for de-escalation.

Canada is listing the following two individuals and two entities under the regulations:

• Major General Gholam Ali Rashid, Commander of the Khatam al-Anbiya Central Headquarters
• Brigadier General Mohammad Reza Ashtiani, Minister of Defence
• Khatam al-Anbiya Central Headquarters
• Armed Forces General Staff of the Islamic Republic of Iran

Canada remains deeply concerned by Iran’s destabilizing activities in the region and the threat it poses to international peace and security. Canada is unwavering in its commitment to promoting peace and security in the Middle East. 

“Today’s measures deliver a clear message: Canada and its allies are prepared and will not hesitate to take action against the Iranian regime as it seeks to destabilize regional peace and security. Whether directly or through its proxies, Iran’s behaviour is deeply concerning and risks further escalating regional tensions and violence. This must be avoided. Canada stands by Israel and its people and reaffirms its commitment to their security.” - Mélanie Joly, Minister of Foreign Affairs

Quick facts

With these new measures, Canada has sanctioned 200 Iranian individuals and 250 Iranian entities.

In 2012, Canada designated Iran as a state supporter of terrorism under the State Immunity Act . Along with the Justice for Victims of Terrorism Act , this listing allows victims to bring civil action against Iran for losses or damages from an act of terrorism with links to Iran committed anywhere in the world.

In November 2022, Canada designated the Islamic Republic of Iran as a regime that has engaged in terrorism and systematic and gross human rights violations, pursuant to subparagraph 35(1)(b) of the Immigration and Refugee Protection Act (IRPA).  This means that tens of thousands of senior members of the Iranian regime, including many members of the Islamic Revolutionary Guard Corps, are inadmissible to Canada.

Related products

• Backgrounder: Canada imposes further sanctions against Iran

Associated links

• Canadian sanctions related to Iran

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