Tehran, Iran, Oct. 24
By Mehdi Sepahvand – Trend:
Iran is under the burden of some tens of thousands of outdated industrial units that can offer no hope of commercial competitiveness in the global market.
These companies have suffered long years of harsh international sanctions and remain in the 2010s as they were in the 1990s or even earlier. Mismanagement has also played a great role in keeping them out of pace with world technology, leading to high production costs.
A great part of the sanctions were removed in 2016 following Iran’s pact with world powers. However, that brought the companies little improvement. Foreign investment in Iran has been a victim of US volatile behavior on Iran, which, although a signatory of the pact, has continued to pose threat of penalties on companies that dare working with Iran.
Adnan Mousapour, the head of export promotion committee of the Chamber of Iran, on October 23 said that the country’s exports are victimized by two shortcomings: firstly, Iranian products are not competitive; secondly, Iran’s trade diplomacy overseas is weak.
In the meantime, Minister of Industries, Mines, and Trade Mohammad Shariatmadari said October 24 that the government will be allocating 10 trillion rials ($290 million, each USD at 34,366 rials) to the renovation of industries.
The government has in the past years been trying to revive industries via financial aid. In August, it was reported that Iran allocated 300 trillion rials to reviving bankrupt and struggling units.
That money, it was said, would go to some 10,000 small-size factories to help them get to their feet, according to Ali Yazdani, CEO of Small Industries and Industrial Zones Organization.
Besides this, 100 trillion rials were set to go to active industrial units to help them improve their functionality, the official noted.
Over the past four years the Iranian government allocated 170 trillion rials to the revival of 28,000 small and mid-sized industrial units, said Yazdani.
Shariatmadari’s vice chancellor, Mojtaba Khosrotaj, on October 24 announced that a $2 billion buyer’s credit line has been planned for target markets within the current fiscal year (to end March 20, 2018).
Khosrotaj noted that the biggest chunk of that money will be directed toward the Iraqi market in Iran’s neighborhood. He said the payment breathing time of the credits will vary from 6 to 24 months.
On October 21, Iran marked the National Exports Day as official reports indicated that over the first half of the current fiscal year (March-September) exports saw great decline.
Iran is able to export worth $180 billion non-oil products per year, Shariatmadari noted in a ceremony to mark the day, stressing that Iran’s economic survival should only be sought in non-oil exports.
At present, Iran accounts for 0.34 percent (oil included) and 0.24 percent (exclusively oil) of the world annual trade.
According to Shariatmadari, the value of 10 goods topping the list of Iran’s exports last year amounted to $23.8 billion and exports to Iran’s top 10 customers stood at $35.8 billion.
According to the Customs Administration, Iran’s non-oil foreign trade during the first half of the current Iranian year (started March 21) stood at $44.13 billion.
Non-oil exports during the period hit 58.63 million tons worth $20.54 billion, indicating a 3.2 percent decline year-on-year.