The feed import sector is critical for driving Iran towards food security, giving it heightened political interest. President Rouhani has suggested that the monopoly on this sector, in the hands of the Modalal family, may be broken up. How this episode plays out should be the subject of investor interest.
Historically, Syria has represented a safe space for armed groups that follow the regime’s line with regards to domestic and international policies. These groups are somewhat of a double-edged sword that have spread terrorism and instability in the region, to the detriment of even the Syrian regime.
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The recent political appointments in Saudi Arabia cap a period of over two years defined by change. King Salman will go down in history as ‘the reformer’ due to the volume, and audacity, of the political reshuffling he has overseen – ostensibly to force through political and economic change befitting of Saudi Arabia in the 21st century.
Sitting at the intersection of arguably the world’s busiest sea route, Egypt’s maritime sector is a flow with investment possibilities. However, opportunities must not be considered without first understanding the lay of the land. Given that the maritime sector in particular is notoriously opaque in most EMEA markets, the need to understand its governance model in Egypt is paramount.
Iran’s bazaari’s represent a long-standing way in which commerce is organised. Given their enduring influence, it is important to understand the societal and political caveats that make bazaari’s more than market traders. Although not initially obvious to the foreign investor, these should firmly be on the political risk radar.
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In a jurisdiction where transparency is largely absent, Egypt’s military is perhaps the biggest beneficiary of opaque dealings. In fact, the military’s private-sector interests muddy Egypt’s investment waters to such an extent that it is thought to have a hand in almost every economic sector. The lay of the land is thus intertwined with the armed forces’ business exploits.
The Kurdish energy sector faces important security threats from Sunni militant groups, namely ISIS and the PKK. As such, investors should monitor their operations closely.
Saudi and UAE are two of the most lucrative MENA markets, but must simultaneously ward off extremist elements from tainting their reputations. Violent extremism should be viewed as a central tenant of any Middle Eastern investment strategy. This is to say that investors would do well to concern themselves with the overtly political developments in addition to building a strong commercial understanding of the region – given that actors and institutions from both spectrums are sufficiently intertwined.
Focusing solely on reaching a political agreement in Libya to restore a national authority and stabilise the country would only fix some of the problems the region suffers from. While Algeria and Egypt project their diplomatic powers in the region and lock horns on achieving the best outcome in Libya - in their respective eyes – one key player, Rached Ghannouchi, preaches compromise and stability both in his native Tunisia, but also in Algeria and in Libya; both contexts where he has become heavily involved as a key power player.
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Clerics form the broadest societal network in Iran; and although their influence is believed to be waning, they still exert significant political and commercial influence. Understanding the proclivities of this group of Iranian power players is as important for investors interested in gaining exposure to the Iranian economy, as it is for political observers seeking to understand the levers of change.
Subdued and on the peripheries of society, the financial interests of the Muslim Brotherhood’s elite figures should not be glossed over. It is no exaggeration that President Sisi is targeting, financial or otherwise, the organisation’s most influential commercial and political personnel. While the regime goes about its business of co-opting or repressing these individuals, investors would do well to err on the side of caution when exploring opportunities with MB-affiliated entities.
Both moderate and reformist supporters voted en masse in Iran’s Presidential elections. Turnout reached 70%, with Rouhani convincingly winning a second mandate. Rouhani faces an uphill battle against unelected conservative institutions if he is to continue to open Iran to the world – most pressing for foreign business interests will be how successful he is in bringing banking reforms.