Prime Minister Keizo Obuchi and Hasan Rouhani, Iran’s first deputy speaker of the Islamic Consultative Assembly, agreed Tuesday that Japanese investment in Iran should be expanded to strengthen bilateral ties.

Obuchi, however, told Rouhani during their meeting that Iran should first strive to create a good climate for Japanese firms to invest in the country, a Foreign Ministry official said.

Obuchi’s comment came in response to Rouhani’s request that Japan cooperate with Tehran’s third five-year economic program, slated to begin in March. The program is expected to pass Iranian parliament shortly, the official said.

The five-year program aims to achieve economic growth through such steps as the introduction of foreign currency and the privatization of state-controlled companies.

Speaking to reporters later in the day at the Japan Institute of International Affairs, a foreign policy think tank, Rouhani reiterated that Iran will strive to reform the nation’s economy under the five-year plan.

“Iran’s business partners in Japan should closely watch the development of the discussion on the economic plan, which features less state involvement in the country’s economic affairs,” Rouhani said.

The economic plan, designed as part of Iranian President Mohammad Khatami’s reform policies, includes legislation to protect private assets and investment and reduce tariffs on imports and government subsidies for domestic industries, Rouhani said.

Rouhani is currently in Japan on a six-day visit until Thursday. He is regarded as the third most influential figure in Iranian foreign policy.

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