At a three-day international seminar that ended Tuesday, Dec 7, Iran unveiled liberal regulations aimed at boosting investments in its free trade zones. The new rules allow foreign banks to operate within these free zones. Moreover, they pave the road for foreign or local private insurance firms to compete within the Iranian zones and will also liberalize foreign exchange.

The vitality of the Iranian plan lies beyond the fact that it is considered unprecedented since the 1979 Islamic revolution. It, in fact, presents an important question: If Iran is ready to be incorporated into the regional and international arena, is the world ready for the Iranian merger?

Like governments and politicians, businessmen and investors set their own standards and fixed agendas when dealing with potential investments abroad. Iran, fully aware of such a fact, is hoping to polish an image that most of the West has held for two decades; and what better way than to open up the economy?

At the seminar held on the northern Gulf island of Kish, Hossein Nassiri, the head of the trade zones, explained to representatives of over 50 companies from 20 countries, the reason behind Iran's intentions of carrying out such unusual steps. Mr. Nassiri said, "The numerous ills of industry and trade in Iran's free trade zones cannot be remedied without a review of structures and strategies ... and the adoption of straightforward rules."

"And this task has begun," he concluded.

Iran currently has three, main, free zones -- the islands of Qeshm and Kish in the Gulf, and the port of Shabhar on the Oman Sea. These zones were established following the Iraq-Iran war (1980-88) to rehabilitate the nearly ruined Iranian infrastructure. Yet bureaucracy and many governmental regulations, as well as international isolation, jeopardized the zone's chances of fulfilling its task in assisting trade and investments in Iran.

The announcement of "freeing" the free zones was received with mixed feelings of hesitance, rejection and excitement from various groups both inside and outside Iran. Conservative Iranian groups that see President Khatami's reforms as a threat to Iran's uniqueness and stability have resisted the move from the start. Although the government has succeeded in carrying out that part of its reform campaign, powerful opposition is foreseen to block or halt any similar endeavors.

Meanwhile, foreign investors, although some have welcomed the government's new approach, are worried that such a move might not be motivation enough for them to invest in Iran. "The important thing is to have the changes mirrored in the whole country to ensure a successful future for banking operations in Iran," said Nasser Homapour, the Tehran representative of global banking giant HSBC.

Other investors are hoping that time will prove the efficiency of such a venture. "I am going to first test the regulations by opening a bank account and seeing if it is really problem-free to open a letter of credit with a client in Europe," a manager of a large corporation told journalists after the seminar concluded.

The Iranian government's mission was not as simple as drafting new rules. While strong political opposition is rapidly growing in Tehran, investors' demands are rising as well. And while Iran is demanded to open its political system and "democratize" its institutions, it is also pressured to free most, if not all of its economy. President Khatami's vows for reforms seem genuine. Yet sincerity doesn't necessarily mean quick moves without deep analysis of the consequences. It is clear that opening the three free zones is only the first step. But when, how and where, are questions that must be confronted by the Iranian government itself; for in the end, Iran is the one who must deal with the negative impact, if any appears.