Page 24 - IRANRptOct19
P. 24
building up trade, switching to non-dollar transactions
Officials say more than $611mn was invested in Iran’s FTZs in 2018/2019 Persian year
contracts drawn up in either the Turkish lira (TRY) or Iranian rial (IRR) rather than the USD during a meeting in Ankara, Iran’s central bank governor said on September 16.
Iranian President Hassan Rouhani met Turkish counterpart Recep Tayyip Erdogan in a bilateral meeting conducted on the sidelines of a trilateral meeting that included Russian President Vladimir Putin and dealt with joint efforts to address the conflict in Syria.
Governor of Iran’s central bank Abdolnaser Hemmati wrote on social media that Rouhani and Erdogan were intent on building up trade—the countries, which both have a population of slightly over 80mn people, have talked of a target of $30bn per annum, around triple the current level—and squeezing the dollar out of the picture where possible.
Both Iran and Turkey are concerned at the high exposure to US sanctions that results from trading in USD, as is Russia which has also in recent years been working on building up its non-dollar trade.
More than IRR67tn ($611mn at the free market rate) was invested in Iran’s free trade zones (FTZs) in the 2018/2019 Persian calendar year (ended March 20), marking growth of 40% y/y, IRIB has reported.
Iran has several free trade zones situated along the periphery of the country, including on two Persian Gulf islands, Kish and Qeshm. Free zones are strategically located at border points with all of Iran’s neighbours to assist in the development of trade. The FTZs are essentially in-country tax-free havens, often set up near airports.
In the 2017/2018 Persian calendar year, overall FTZs investment reportedly amounted to IRR48tn.
According to Iran’s Supreme Council on Free Trade Zones, some 1,400 businesses are now operational in the country’s FTZs.
Iran’s annual export value via free trade zones and special economic zones (SEZs) is reportedly running at $18bn. The FTZs are said to be providing around 25,000 jobs. Iranian exports have benefited from the severe weakening of the Iranian rial caused by US sanctions imposed since last year.
Since Hassan Rouhani became president in 2013, Iran has exported around $120bn worth of goods, while importing items worth around $30bn, according to Morteza Bank, director of the Supreme Council on Free Trade Zones.
5.3 FDI
Iran FDI 2010 2011 2012 2013 2014 2015 2016 2017
FDI net inflows (BoP) (USD bn)
3.649 4.277 4.662 3.05 2.105 2.05 3.372 5.019
FDI net inflows (% of GDP)
0.749 0.733 0.778 0.653 0.485 0.531 0.805 1.105
FDI net outflows (% of GDP)
0.049 0.044 0.226 0.04 0.001 0.031 0.025
source: World Bank
Five-year residences in Iran offered to foreigners who bring $250,000 investment
Iran’s Interior Ministry has announced that with a $250,000 investment in the economy a foreigner can be granted a five-year residency, Tasnim News Agency reported on July 31.
Like other regional countries including Turkey and Azerbaijan, Iran is attempting to increase its income from foreign direct investment (FDI), but
24 IRAN Country Report October 2019 www.intellinews.com
