TEHRAN (Iran News) –Secretary of Iran’s Supreme Council of Free Trade-Industrial and Special Economic Zones Hojjatollah Abdolmaleki has said negotiations are underway between Tehran and 21 states to launch joint free zones.

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Iran’s Transport and Urban Development Minister Mehrdad Bazrpash made the remarks in a meeting of the two countries’ Joint Economic Committee in Tehran, expressing satisfaction with the implementation of previous agreements between the two nations.

He also said that the pace of implementing bilateral agreements has sped up in recent months and that the two sides will introduce joint economic zones soon.

Iran and Syria are accelerating operational measures to implement bilateral accords, he said, proposing the formation of a permanent joint energy committee between the two countries to follow up agreements concerning gas and electricity cooperation.

The Iranian minister also underlined the need for finalizing the Tehran-Damascus railway project, noting that the Islamic Republic of Iran Railways is fully prepared to study the reconstruction of damaged railroads in Syria.

Syrian Minister of Economy and Foreign Trade Mohammad Samer Khalil, who co-chairs the Iran-Syria Joint Economic Committee, declared both parties’ plans to pursue joint ventures such as setting up free trade zones and joint insurance and banking institutes.

The Syrian official also said the two sides have reached a good consensus regarding the guidelines of the free trade agreement, and the framework of cooperation between central banks, as well as tourism, and transportation sectors.

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Deputy Head of Secretariat of the Supreme Council of Free Industrial and Special Economic Zones for Economic Affairs Ahmad Jamali said that the Secretariat has considered the establishment of free zones with neighboring countries as its legal obligation, aimed at production growth and more productivity from abundant capacities and potentials existing in the country.

Accordingly, Iran submitted its request to the officials of 18 neighboring states for the establishment of joint free zones, and all of these countries welcomed the proposal, he stated.

To date, Russia, Kazakhstan, Uzbekistan, Syria, Iraq and Turkey have agreed with Iran’s proposal of setting up joint free zones, he added.

Negotiations have been held with the Russian Federation regarding the establishment of joint free zones, he said, adding that expert-level sessions both in-person and via videoconference have been held between officials of the two countries and it was agreed to set up joint free zones between the Moscow-Lotus Metropolises Special Economic zones and the Chabahar and Anzali free zones.

The establishment of joint free zones among Caspian Sea littoral states is another measures taken into consideration, Jamali added.

The decision for establishing the mentioned zone was made during the two countries’ fifth Joint Economic Committee meeting in Baghdad.

Underlining the fact that three of Iran’s major free zones are located near the Iraqi border, Jamali noted that along with the joint zone, these four free trade zones can play a significant role in boosting the trade exchanges between the two countries.

The establishment of free trade zones (FTZs) in Iran dates back to the Iranian calendar year 1368 (March 1989 – March 1990) following the fall in the country’s oil income in the preceding year which prompted the government to promote non-oil exports.

The first two free trade zones of Iran were established in the south of the country. The first one was Kish Free Trade Zone established in 1368 on Kish Island in the Persian Gulf and the second one was Qeshm Free Trade Zone established the year after on Qeshm Island in the Strait of Hormuz.

Some five other free trade zones have been also established in the country since then, including Chabahar in southeastern Sistan-Baluchestan Province, Arvand in southwestern Khuzestan Province, Anzali in northern Gilan Province, Aras in East-Azarbaijan Province and Maku in West-Azarbaijan Province, both in the northwest of the country.

The development of existing free trade zones and the establishment of new FTZs has become one of the major economic approaches of the Iranian government.

In last December, the secretary of the Free Zones High Council said that this council is seeking to modify the country’s free trade zones (FTZ) comprehensive law.

Speaking in a TV program, Abdolmaleki said, “The good news for the entrepreneurs of the regions, both the current ones and those who, God willing, will soon join us, is that we are looking for the modification of the so-called comprehensive law.”

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Addressing the gathering of representatives of the chamber which was held in the presence of free zone officials, Shafei said that free zones have been one of the important tools of the governments in promoting trade and strengthening exports in the developed countries, adding that when we compare the performance of free zones of the country with successful countries like Taiwan, China and South Korea, we see many weaknesses and shortages in free zones of the country from their establishment.

He noted that study shows that free zones in the under developed countries which have insignificant share of the global markets can have destructive effects, adding that free zones were formed to boost blessing of international trade and to protect the domestic protection capacity from being elimination on this course.

He then highlighted major goals and performance of free zones, adding that Iran is gradually becoming fully free zones but it is still unknown with which infrastructure it happens, noting that the launch of free zones should be after thorough technical and economic studies.

Shafei also reacted to the Vienna talks and Ukraine war and said they will have their own consequences on Iran’s economy. He criticized Covid pandemic, sanctions and management in recent years as the main reasons for economic flop, adding that all economic activities have been just for survival rather than developing.

He noted if the Vienna talks end successfully and sanctions are lifted, country is necessary to change its economic management towards developmental economy, something that the country has been missing it in the past years.

He also warned over opening the borders for imports of useless commodities which will hurt the economy, adding that it may reduce the forex rate for short term but it will hurt the economy in long term.

Shafei urged the government to study the past decisions to avoid their repetitions and called for control of the inflation and fore market which are essential for having a stable economy.

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Seyed Ali Mousavi, the deputy head of Arvand Free Zone Organization for investment and economic affairs, said the exported goods included construction materials, clinker, minerals, bitumen and various industrial oils, dates and dairy products, and were exported from the port of Shalamcheh and the ports of Khorramshahr and Abadan, which are located within the Arvand Free Zone.

These goods have been exported to Iraq, Kuwait, the United Arab Emirates, Qatar, China, Australia and Germany, and some Central Asian countries, he added.

The official had previously announced that this zone attracted $52 million in the form of approved foreign investment projects during the past Iranian calendar year (ended on March 20).

He said the status of investment making is proper in this zone despite the sanctions.

Over the past two decades, free and special economic zones have played a significant role in Iran’s economy, and the Iranian government has been seriously pursuing a program for the development of the existing zones and establishing new ones.

According to Morteza Bank, the former secretary of Iranian Free Zones High Council, over 40 percent of Iran’s exports are done through the country’s free trade zones and special economic zones and $169 billion worth of commodities have been exported from these areas in the past seven years.

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IRAN NEWS ECONOMIC DESK

TEHRAN – Secretary of Iran’s High Council of Free and Special Economic Zones Morteza Bank and Deputy Minister of Cooperatives, Labor and Social Welfares Mohammad Jafar Kabiri yesterday signed a memorandum of understanding on boosting the public participation in the economic and social development of free trade and industry zones.

During the meeting, Mr Bank said that justice-oriented economy can be materialized through activities of cooperatives, adding that one of the important segments of the national economy is the cooperative sector which has been raised with a justice-oriented approach and it is considered as an economic current in the world.

He reiterated that development and progress is impossible without social participation, adding launching cooperatives in the free zones can pave the way in its best form for public economic participation in the developmental projects in the zones based on the cooperative format.

Mr. Bank further said this form of participation, beside its positive effect on the development in the zones, is effective in improving the level of people’s livelihood.

He added that setting up of cooperatives and public participation in implementing the projects in the free trade zones has created good ground for the pick-up in domestic production and it is a precious opportunity for the national economic development.

Meanwhile Mr. Kabiri, for his part, said that knowledge-based cooperatives will be launched in the free trade zones, adding that the ministry will support presenting products of cooperatives in the market and announced readiness for ministry with the free trade zone.

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IRAN NEWS NATIONAL DESK

TEHRAN – Attorney-General Hojjatoleslam Mohammad Jafar Montazeri criticized the current condition of free trade zones and said the zones have turned into hubs for smuggling goods.

In a TV program, Montazeri said that the judiciary has banned handover of commercial card to other parties and warned Registration Offices that if they do not abide by the law, they will be charged with accomplice.

He said some people hire those cards and take advantage of them in order to evade paying tax.

Mr. Montazeri added that Chamber of Commerce should revise its regulations for issuing commercial cards.

He added that commercial cards were some factor behind smuggling and it should be dealt strongly.

He noted that smuggling has negative impact on the occupation and boom in production, adding that corruption has many dimensions.

He went on to say that free trade zone is aimed at pick-up in exports in the zone but now everything has gone in the opposite direction and they have turned into hubs for pick-up in imports. He urged officials of the zones to abide by law and to have supervision over activities and contraband goods.

He also noted that fighting with smuggling goods and forex is not duty of a certain branch of the system and all bodies should enter the scene and to combat with smuggling seriously, admitting that he does not see this determination seriously in some places.

On the charges against former governor of Central Bank of Iran Valiollah Seif, the attorney general said that the case is under probe and he is currently unable to leave the country.

On tax evasion of lawyers and doctors, he said health ministry should pursue the issue and it should find legal framework to tackle the issue in collaboration with finance ministry.

He also reiterated that the judiciary is determined to fight corruption and it has started this fight from itself and it has dismissed some judges.

Montazeri added that recent measures of the judiciary for fighting economic corruption have been warmly welcomed by the public.

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In addition, $38 billion worth of products was imported in the zone, registering a significant $80 billion worth of trade balance.

Speaking in a meeting of ‘strategies of development of services, products and exports of top Iranian companies’, held at the venue of IRIB Intl. Conferences Center, he added, “free zones account for 0.3 percent of total land area of the country, so that free zones are home to less than one million people.”

He put the current number of industrial, mineral and agricultural units in these zones at 1,607 and reiterated, “free zones have generated employment opportunities for 285,000 people of the country.”

He termed strengthening investment opportunities, spurring production and exports in this zone ‘necessary and essential’.

Getting easy access to the cheaper raw materials has decreased production cost in free and special economic zones considerably, Morteza Bank opined.

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