Domestic Economy

Foreigners Invited to Invest in Fast-Emerging FTZs

Foreigners Invited to Invest in Fast-Emerging FTZsForeigners Invited to Invest in Fast-Emerging FTZs

A conference focused on introducing investment opportunities in Iran’s free trade zones opened in Dubai on Saturday night.

President Hassan Rouhani’s chief advisor Akbar Torkan, Iranian Ambassador in Abu Dhabi Mohammad Reza Fayyazbakhsh and a group of Iranian and foreign businesspeople attended the daylong conference, which was jointly organized by the Islamic Republic of Iran’s Consulate in Abu Dhabi and the Iranian Business Council of Dubai, in collaboration with Arvand Free Trade Zone.

The role of FTZs in economic development of Iran, ways of attracting foreign capital and technology to Iranian free zones and investment opportunities in Arvand and Chabahar FTZs were among major topics discussed in the conference.

Speaking on the sidelines of the conference on Saturday, Torkan underscored the Iranian government’s policy aimed at attracting foreign investment and advanced technologies for growth and development of free trade zones.

“Iran is seeking to reinforce and expand economic relations with all regional countries, including the United Arab Emirates and engage in joint investments in FTZs,” he said.

  Arvand Free Zone

Torkan highlighted the potential for foreign investment in industrial and tourism sectors in Arvand Free Trade Zone. “Petrochemical, chemical and food industries are other attractive sectors for investment,” he noted.

Located in the western province of Khuzestan, Arvand Free Trade Zone covers an area of 172 square kilometers encompassing major cities of Khorramshahr and Abadan and Minoo Island along the Arvand waterway.

Easy and cheap access to regional and global markets through terrestrial, aerial and marine transportation and having common borders with Iraq and Kuwait were mentioned by the official as some positive features of the zone.

  Development of FTZs

The growing focus on development of free trade zones in Iran is in line with the government’s plan to boost non-oil exports.

Iran started experimenting with free trade zones in the early 1990s as a solution to falling global oil prices and revenues.

 In 1989, oil revenues had fallen to as low as $7 billion. The government, which was then led by Hashemi Rafsanjani, believed FTZs could help compensate for the oil rout by increasing non-oil exports. Under Article 19 of the First Five-Year Economic Development Plan (1991-96), Iran’s first three FTZs were formally established.

Since then the total number of active FTZs has grown to seven, namely Kish, Qeshm, Chabahar, Aras, Anzali, Arvand and Maku.

There are, however, many evidences that the existing FTZs have failed to achieve their targeted objectives. Critics have repeatedly drawn attention to serious mismanagement, causing a sharp rise in smuggling in these zones.  

Another issue often criticized is the lack of basic logistical and economic infrastructures in these areas. Most of Iran’s FTZs are located in underdeveloped areas in the hope that the move would spur economic growth in the region.

  Proposal for 15 New FTZs

The High Council of Iran’s Free Trade, Industrial and Special Economic Zones–the body in charge of overseeing the FTZs–has proposed establishing 13 new FTZs in various locations across the country over the past two months.

The council submitted a bill to the Parliament in April, seeking their approval for the establishment of six new FTZs, namely Mehran in the western province of Ilam, Baneh-Marivan in the northwestern Kurdestan Province, Incheh Borun in the northeastern Golestan Province, Zabol in the southeastern Sistan-Baluchestan Province, one in the northwestern Ardabil city and capital of Ardabil Province and another in the southern city of Jask in Hormozgan Province.

Last week, the council passed another bill to the Parliament for creating seven other free trade zones in the towns of Fasa in Fars Province, Abarkouh and Meybod in Yazd Province, Gachsaran in Kohgilouyeh-Boyerahmad Province, Urmia in West Azarbaijan Province and Khaf and Qouchan in Khorasan Razavi Province. The new FTZs are currently awaiting the Parliament’s approval.