Comparative Analysis of Iran and Turkey: Business Environment, Politics, and Opportunities

What is the capital city of Iran?

Tehran

What is the official language of Iran?

Persian

What is the currency of Iran?

Iranian Rial (IRR)

What type of governance does Iran have?

Islamic Republic

What was the estimated population of Iran in 2024?

89.2 million

What is the median age of the Iranian population?

33 years

What percentage of Iran's population is urbanized as of 2023?

77.3%

Who holds ultimate authority in Iran?

Supreme Leader Ayatollah Ali Khamenei

What is a major issue expected to arise from the Supreme Leader's succession?

Intense infighting among hardline factions

What is the role of the Guardian Council in Iran?

It vets all candidates for public office and can veto legislation.

What is the Islamic Revolutionary Guards Corps (IRGC)?

A powerful military and security force with vast economic interests.

What are Bonyads in Iran?

Large, opaque, often tax-exempt charitable foundations linked to the clerical elite.

What is the Expediency Council's function?

It mediates legislative disputes and acts as a final arbiter on legislation.

What is the primary barrier to economic growth in Iran?

Crippling US sanctions

What is the significance of the JCPOA for Iran?

It is a nuclear deal that is expiring in October 2025, affecting negotiations for sanctions relief.

What are the socio-economic risks faced by Iran?

Severe economic hardship, high inflation, and resource shortages.

What is the economic structure of Iran?

A state-dominated, hydrocarbon-based economy constrained by international sanctions.

What influences the political environment in Iran?

Public discontent, economic hardship, and hardliner dominance.

What historical influences shape Turkey's business environment?

Layers from Hittite, Greek-Roman, Byzantine, Seljuk, and Ottoman periods.

What is a key aspect of Turkish cuisine?

Meze culture and regional diversity.

What is the significance of the Hagia Sophia in Turkey?

It is a historical architectural landmark reflecting the country's rich cultural heritage.

What is the role of tea and coffee in Turkish culture?

They are integral to hospitality rituals.

What is the relationship-first business cue in Turkey?

Respectful bargaining and trust-building over time.

What is the Persianate cultural sphere?

An influence extending from the Caucasus to South Asia via the Silk Roads.

What is Nowruz?

A spring equinox festival celebrated across West/Central Asia symbolizing renewal.

Who are notable Persian poets that shaped Iranian culture?

Ferdowsi, Hafez, Saadi, and Rumi.

What is a key characteristic of Persian arts and aesthetics?

Balance, symmetry, and craft mastery in works like carpets and miniature paintings.

What is a significant challenge for Iran's political environment?

Policy gridlock due to hardliner control over state institutions.

What are State-Owned Enterprises (SOEs)?

Entities that dominate key sectors, including the automotive industry, but are often indebted and inefficient.

What role does the IRGC play in Iran's economy?

The Islamic Revolutionary Guard Corps controls vast commercial interests, stifling competition.

What are bonyads?

Quasi-governmental 'charitable foundations' run by the clerical elite, controlling large portions of the economy.

What is the goal of Iran's 7th National Development Plan (2023-2027)?

To achieve 8% annual GDP growth, improve resource management, enhance social justice, and promote science and technology.

What is Iran's GDP forecast for 2025?

-0.6% growth.

What is the expected inflation rate in Iran from 2026-2029?

~30% annually.

What is the projected unemployment rate in Iran for 2025?

8.2%.

What is the significance of oil and gas in Iran's economy?

They are central to the economy, with the world's 2nd largest gas and fourth-largest proven crude oil reserves.

What challenges does the automotive industry in Iran face?

It is state-owned, inefficient, and produces technologically obsolete vehicles.

What are the main challenges for Foreign Direct Investment (FDI) in Iran?

US sanctions, FATF blacklisting, and a legal framework that offers minimal protection from expropriation.

What is the state of infrastructure development in Iran?

Chronic underinvestment has led to a deficient infrastructure network, constraining growth.

What currency does Iran use?

Iranian Rial (IRR).

What are the effects of US sanctions on Iran's economy?

They severely limit access to foreign exchange, international finance, investment, and technology.

How does the Iranian government influence monetary policy?

Monetary policy is weak and driven by political needs, which fuels rampant inflation.

What is the cultural dimension of power distance in Iran?

High; the society is stratified, and subordinates are hesitant to challenge superiors.

What is the long-term orientation of Iranian culture?

Low; the culture prioritizes present gratification over long-term planning.

How does collectivism manifest in Iranian society?

Family loyalty is paramount, and trust and relationships are foundational in business.

What is the impact of religion on business in Iran?

The legal system is based on sharia, and key economic actors receive tax exemptions and privileged access.

What are the workforce demographics in Iran?

A youthful population with a median age of 32; 68.8% are of working age.

What is the labor force participation rate in Iran?

40.8%, with significantly lower rates for women.

What is the youth unemployment rate in Iran?

Around 22%.

What are the primary economic sectors in Iran?

Oil & gas, petrochemicals, automotive, and agriculture.

What is the expected trend for the Iranian Rial's exchange rate?

It is under persistent pressure and expected to continue depreciating.

What is the significance of the Islamic Finance system in Iran?

Banks operate under a Usury-Free Banking Law, prohibiting interest and charging 'profit' rates.

What social norms affect women's participation in the workforce in Iran?

Gender segregation and strict enforcement of Islamic dress codes contribute to low female workforce participation.

What is the impact of climate change on Iran?

It leads to severe water shortages, desertification, and rising temperatures, threatening agriculture and public health.

What are the main deficiencies in Iran's electricity grid?

It is unreliable and inadequate, constraining industrial output and causing public protests.

What was the unemployment rate in Iran in 2024?

8.6% overall, with youth unemployment around 22%.

What policy is Iran implementing in response to high local unemployment?

The state is intensifying workforce localisation measures and cracking down on illegal foreign workers.

What is causing a severe 'brain drain' in Iran?

Economic and political reasons are driving well-qualified graduates and professionals to leave.

What is the primary issue with the skills of graduates in Iran?

There is a wide gap between formal academic credentials and the applicable skills demanded by the market.

What demographic provides market opportunities in Iran?

A large, youthful, and technologically sophisticated middle-income population.

How are consumer spending patterns affected in Iran?

Consumer spending is constrained by declining real incomes due to rampant inflation.

What do food and housing account for in household expenditure in Iran?

Over two-thirds of household expenditure.

What is the status of the retail environment in Iran?

The market is fragmented, dominated by independent retailers, but organised chains are growing.

What is the Iran Mall known for?

It is the world's largest shopping mall by area.

What characterizes the business climate in Iran?

Cumbersome government regulation and the need for political connections to succeed.

What is the projected impact of climate change on the Iranian economy by 2050?

The economy is projected to be 2.5% smaller than it would have been without climate change.

What critical environmental issue does Iran face?

Severe water shortages causing land degradation and desertification.

What are the consequences of inefficient irrigation practices in Iran?

Depletion of many of the country's aquifers.

What is Iran's status in terms of greenhouse gas emissions?

Iran is a major global emitter and the world's third-largest gas-flaring country.

What is Iran's commitment under the Paris Agreement?

A 4% reduction in greenhouse gas emissions by 2030, though it has not ratified the treaty.

What is the focus of Iran's energy strategy?

Converting crude oil and natural gas into refined products and petrochemicals.

What percentage of total electricity production do non-hydro renewables account for in Iran?

0.5% in 2023.

What is the government's renewable capacity goal by 2025?

10 GW of non-hydro renewable capacity, though this is unlikely to be met.

What is the dual decarbonisation strategy in Iran?

Combines industrial-scale Carbon Capture and Storage (CCS) for the LNG sector with exploring international carbon market mechanisms.

What is the government's stance on localisation employment policy?

Intensifying measures to reduce high local unemployment, making it harder for foreign staff to secure long-term work permits.

What is Iran's status with the Financial Action Task Force (FATF)?

Iran is on the FATF 'blacklist' for failing to address deficiencies in its anti-money laundering framework.

What are the implications of local content requirements in Iran?

The economy is dominated by the IRGC and bonyads, favouring politically connected local firms.

What has been the trend regarding strikes in Iran?

Strikes over pay have become increasingly frequent due to rampant inflation eroding real wages.

What is the core of Iran's export base?

The economy relies on oil and gas for the bulk of its external revenue.

What are Iran's main non-oil exports?

Industrial finished goods, agricultural products (like saffron and pistachios), and raw materials.

Who are Iran's key trading partners?

Countries with established financial arrangements, such as the UAE, China, and Turkey.

What is Iran's strategic trade focus?

Building economic alliances with non-Western powers to counter US sanctions.

What is Iran's membership status in OPEC?

A member but exempted from recent OPEC+ production cuts due to US sanctions.

What new alliances has Iran formed recently?

Joined BRICS and finalised a free-trade agreement with the Eurasian Economic Union.

What unconventional methods does Iran use to evade sanctions?

Using gold for payments, conducting transactions in Dubai, and opaque ship-to-ship transfers for oil exports.

What has caused financial isolation for Iran?

Iranian banks have been suspended from the SWIFT network and the country is on the FATF blacklist.

What is the strategic goal of developing the Chabahar port?

To create a transit hub for trade with Afghanistan and Central Asia.

What project aims to connect Russia to India via Azerbaijan and Iran?

The International North-South Transport Corridor project.

What is a primary geopolitical risk for Iran?

Potential direct military conflict with Israel and instability from Iran's use of regional proxies.

What is Iran's primary strategy for risk mitigation?

Building non-Western economic alliances and developing sanctions-evasion mechanisms.

What characterizes the business environment in Iran?

It is marked by burdensome regulations and an opaque legal system.

Who dominates the Iranian economy?

The IRGC (Islamic Revolutionary Guard Corps) and bonyads.

What is a significant barrier for international firms operating in Iran?

US sanctions and FATF blacklisting.

What labor issue is contributing to instability in Iran?

A worsening 'brain drain' and frequent strikes over low pay.

What are the high-growth sectors in Iran?

Hydrocarbons and petrochemicals.

What potential does Iran's youthful population represent?

A significant potential consumer market.

What is Iran's overall global ranking in business attractiveness?

#74 globally.

What is a major determinant of change in Iran's business environment?

The trajectory of relations with the US and the future of the sanctions regime.

What is the capital city of Turkey?

Ankara.

What type of governance does Turkey have?

A presidential system.