On New Year's Eve, before the tumultuous events of 1978–79, President Jimmy Carter, while toasting the Shah in Tehran, referred to Iran as an “island of stability” in the Persian Gulf. President Carter's remarks reflected the consensus opinion about Iran not only among United States government officials but among most business firms operating in Iran as well. A typical U.S. corporate attitude was represented by a 1975 Business International (hereafter BI) report about business prospects in the Middle East.
These characteristics (infrastructure development, population size and high absorptive capacity), which favorably distinguish Iran from the Arab Middle East, make the country the prime market in the area for many Western exporters. Political stability, the government's benevolent attitude toward private enterprise, and a well-protected internal market give Iran a similar edge in the eyes of foreign investors. Few international companies will thus want to stand aside as Iran races toward its goal of becoming the Japan of the Middle East.1