LOOKING TO NEAR ABROAD

Iran 2011 | ECONOMY | INSIDE PERSPECTIVE

Dr. Mohammad Nahavandian, President of the Iran Chamber of Commerce, Industries and Mines, comments on the ongoing WTO accession process, economic reforms and the growth of trade.

Dr. Mohammad Nahavandian
BIOGRAPHY
Dr. Mohammad Nahavandian is the President of the Iran Chamber of Commerce, Industries and Mines.

The Iran Chamber of Commerce, Industries and Mines (ICCIM) was founded in 1969 (or 1348 in the Iranian calendar) with the aim of supporting the private sector. In fact, as a civil institution ICCIM actively supports Iran's sustainable development and utilizes its committed human capital to realize its objectives in accordance with the nation's needs, while securing its members' interests.

ICCIM is committed to helping develop the country's economic system, improve the status of the private sector, create a suitable entrepreneurial environment within Iran, and remove any barriers standing in the way of business. The organization seeks to enhance the economic status of Iran globally, upgrade the level of economic thinking within society, and encourage the participation of the people in different economic fields. As a group, we consult with both public and private sector leaders, take part in economic decision-making processes, organize data resources, and provide information on various areas of the national and international economy.

WTO ACCESSION

Nowadays, little doubt remains about the necessity of Iran's entry into the World Trade Organization (WTO)—becoming a member country has turned into a must. Gaining access to the global marketplace at a competitive level will help facilitate the efficient utilization of our available production resources. Fortunately, the significance of WTO membership is well known by many of the country's policymakers. As a result, in 1992 a taskforce was formed in the Ministry of Commerce and after two years of consultations on this issue the government decided that it was essential to accept the General Agreement on Tariffs and Trade (GATT).

Also, in recent years major strides have been taken to improve Iran's integration with the world economy. In 1999, an advanced training course on international trade negotiations, centering on the WTO and its processes, was initiated at the Institute for Trade Studies and Research in order to train trade negotiators for the Islamic Republic of Iran's Trade Representative office.

A Council for the Coordination of Ministers on WTO Affairs was presided over by the Minister of Commerce in October-November 2000. The Minister of Commerce was appointed the trade representative of the Islamic Republic of Iran by presidential decree in 2001. As well, the Minister of Commerce was approved as the trade representative for the Islamic Republic of Iran by the cabinet in accordance with the multi-sectoral document of accession to the WTO in 2005.

The first examination of Iran's request to join the WTO took place at the WTO's general assembly on May 8, 2001. Afterwards, the accession request and the establishment of Iran's accession working party was processed at the 23rd round of the general council of the WTO, and at its conclusion Iran was accepted as an observing member on May 26, 2005.

In 2006 the explanatory report of Iran's process of accession to the WTO was drawn up by the Islamic Republic of Iran's Trade Representative with the aim of systematically managing the accession process and designating the duties and responsibilities of the administrative organizations. Thereafter, in 2007, the ninth edition of the report on the Islamic Republic of Iran's trade regime met the approval of a working party composed of the elected ministers of the cabinet.

After submitting the report of the trade regime of the WTO, the first series of questions of the WTO's working party were received and thereafter they underwent initial scrutiny by the Islamic Republic of Iran's Trade Representative, which ended in the dispatching of questions to 55 relevant organizations along with guidelines on answering the questions. The WTO accession process is ongoing, and we naturally look forward to a successful conclusion after many years of negotiations.

REFORM PROCESS

In recent years, Iran's economy has undergone a number of measures in different economic areas that have changed it at both the micro and macro level. Prominent among these measures include the announcement of Article 44, the privatization process, the growth of the capital markets, the improved targeting of subsidies, the formation of a competition council, and the establishment of a national wealth fund. These measures, if implemented properly, will have a macroeconomic impact on areas such as the rate of inflation, unemployment, poverty, and the development of the private sector. The existing conditions in the economy provide a useful backdrop to undertake such major structural reforms.

A closer look at the economic reform process in Iran reveals that it is an economic project whose management needs to be defined at the government level. That is to say, all components of the state should be aligned to modify the 80-year-old legacy of Iran's economic history over the course of a single decade.

FDI CONNECTION

Iran is brimful of investment opportunities in numerous production and service fields for foreign investors. It is an attractive destination because of its abundant natural resources, low-cost and skillful labor force, strategic and favorable geographical location, and proximity to other emerging markets.

Currently, tax, customs, and financial incentives as well as free trade zones and infrastructural incentives are available in Iran in order to promote investment. These are determined and implemented by the Organization for Investment, Economic and Technical Assistance of Iran (OIETAI). Also, some amendments have been made to the foreign investment law by OIETAI that are all aimed at improving the investment environment and promoting conditions for the presence of investors. In fact, it should be emphasized that the new investment law, which encourages and supports foreign investment, will provide the opportunity for investment in all areas of Iran's economy. By the same token, nothing stands in the way of foreign investment, and investment activities are not blocked in any areas except for those concerning national security. On this basis, investors can embark on investing in Iran in many different ways.

REGIONAL RELATIONS

The contemporary world is constructed upon the basis of an interaction between countries. In fact, economies are far from being isolated and closed systems. Nowadays, economic and trade ties between countries are viewed as crucial strategies for increasing competitive potentials and raising the level of public prosperity. Iran is no exception to this, and undoubtedly boosting its ties with other countries will substantially influence Iran's economic development.

Of course, having trade ties with countries that are geographically close to Iran is of greater significance, as it entails lower transaction costs and the level of cultural affinity makes relationships easier to form. Iran has always attempted to expand its trading ties with regional and African countries as they hold golden opportunities for the export of Iranian products. Evidently, Iranian investors, businessmen, and exporters of technical and engineering services have performed well in these areas and they all welcome such opportunities.