President Park arrived in Iran on May first. It’s the first visit to Iran by a Korean president since Korea and Iran established diplomatic ties in 1962. President Park held a summit with Iranian President Hassan Rouhani and plans to discuss various economic cooperation projects until she returns home tomorrow on May 3rd. She is also accompanied by the largest ever business delegation, boosting the odds for Korea’s solid presence in the vast Iranian market, which was just released from economic sanctions. Here’s Senior Research Fellow Hong Jung-hwa홍정화 of the Institute for International Trade to tell us more about President Park’s visit to Iran and the potential economic gains.

This delegation to Iran is the largest one ever, comprised of executives and officials from 236 businesses and public agencies. The delegation includes representatives of 38 conglomerates, 146 small and medium enterprises, 50 public agencies, and two hospitals. The sectors of construction, infrastructure, engineering, machinery, materials, and medical service are all represented within the delegation. There are also automotive parts, consumer goods, retail business, electronics, and food companies. It’s generally hard for smaller businesses to court buyers. So such an official occasion presents a wonderful opportunity for the representatives of small and medium companies to expand their customer base.


Iran has the world’s fourth largest crude oil reserve and the largest natural gas reserve. With a population of 80 million, it is also the second largest economy in the Middle East. Economic sanctions placed on Iran by the international community were lifted in January. Now it is expected that Iran will post an annual average growth rate of 6% and live up to the expectation of being the Middle East’s last blue ocean. The purpose of President Park Geun-hye’s visit to Iran is largely economic. Korea aims to take a bigger share of the lucrative Iranian market just freed from economic sanctions. She held a summit with President Hassan Rouhani and will continue to take an active role in Korea-Iran business relations. The Korean delegation is expected to sign economic cooperative projects worth more than 10 billion U.S. dollars with local companies.

Foreign Minister Yun Byung-se said at the press briefing held on April 25th that economic projects between Korea and Iran are expected to exceed 10 billion U.S. dollars. In addition, a record total of 115 one-on-one consultations between Korean and local businesses have been arranged already. Also, at least 40 memorandums of understanding are expected to be signed. President Park’s visit to Iran is the first one by a Korean president since the two countries established diplomatic relations 54 years ago in 1962. In fact, this is the first one-on-one meeting between the leaders of Korea and Iran. So I believe this state visit is going to produce a meaningful outcome. Korea maintained a steady trade relationship with Iran even when the Arab country was hit with economic sanctions. Therefore, the latest visit by President Park and an extensive economic delegation will help promote cooperation between the two countries.

The Korean presidential office of Cheong Wa Dae expects to see many gains from the president’s visit to Iran. It’s estimated that Korean enterprises will stand to gain a number of great business opportunities if Korea and Iran succeed in setting up economic groundwork.

While Iran was subjected to economic sanctions, the country nurtured its manufacturing sector in an attempt to locally produce everything its people needed. The country focused on the automobile industry and worked hard to develop automotive technologies. This is where Korea’s status as the world’s fifth largest automobile manufacturer comes into play. Korea expects to see business opportunities in steel and petrochemical industries. While Iran, a country rich in natural resources, like crude oil and natural gas, is expected to make many investments in infrastructure through which the Iranian government can post a lot of export revenue. Korean businesses are likely to seize opportunities in infrastructure construction or resources development projects as well. Next, the Iranian people will have more buying power as the market is opened to the outside world and its economy flourishes. With a population of 80 million, Iran is undeniably a lucrative market for consumer goods. Also, when the country’s deteriorated hospitals are renovated, there is bound to be a higher demand for cutting-edge medical devices. That’s what Korea’s small but solid medical device manufacturers are going to take advantage of with their affordable and high quality medical equipment.


While Iran was subjected to economic sanctions, the country nurtured its manufacturing sector in an attempt to locally produce everything its people needed. The country focused on the automobile industry and worked hard to develop automotive technologies. This is where Korea’s status as the world’s fifth largest automobile manufacturer comes into play. Korea expects to see business opportunities in steel and petrochemical industries. While Iran, a country rich in natural resources, like crude oil and natural gas, is expected to make many investments in infrastructure through which the Iranian government can post a lot of export revenue. Korean businesses are likely to seize opportunities in infrastructure construction or resources development projects as well. Next, the Iranian people will have more buying power as the market is opened to the outside world and its economy flourishes. With a population of 80 million, Iran is undeniably a lucrative market for consumer goods. Also, when the country’s deteriorated hospitals are renovated, there is bound to be a higher demand for cutting-edge medical devices. That’s what Korea’s small but solid medical device manufacturers are going to take advantage of with their affordable and high quality medical equipment.

Not surprisingly, other European business giants are eager to enter the just opened Iranian market. Additionally, China, Turkey, India, and Japan are all poised to rush into the newly opened market. The Korea International Trade Association conducted a survey on Korean exporters in February and found that about 67% of the responding companies were most worried about the competition from China.

Korea’s rivals – China, Japan, and some European nations – are already taking part in the construction of petrochemical plants and high-speed railways in Iran. Another drawback is that although sanctions have been lifted, Iran is still forbidden to deal in U.S. dollars. This makes entering the market a little difficult for Korea because of the cost of time and money in settling payments.

Since Iran emerged as the hottest market, some are blindly rushing into it or have unrealistic expectations about Iran. But Iran is not an easy market. Its potential is huge, but that’s exactly why we need to have carefully planned, mid-to-long term strategies. Rather than trying to resolve everything in a short span of time, Korea should try to understand their culture more fully over time and thoroughly analyze the Iranian people’s needs. This is why detailed market studies should be done and Korean businessmen should visit Iran frequently to experience the country to the fullest.

Economic cooperation with Iran could provide a breakthrough for the struggling Korean economy. But the president’s three-day visit is too short to produce results satisfying for everyone. Nonetheless, it can be the beginning of a long and mutually beneficial partnership.