Domestic Economy

Industrial Development Strategic Plan Unveiled

Industrial Development Strategic Plan UnveiledIndustrial Development Strategic Plan Unveiled

The Ministry of Industries, Mining and Trade has released a "Strategic Plan" based on key policies and objectives of the 20-Year National Vision Plan (2005-2025) as well as those of Resistance Economy – a set of guidelines recommended by the Leader of Islamic Revolution Ayatollah Seyyed Ali Khamenei to promote domestic growth and reduce reliance on oil.

The document, which provides an overview of the economic condition with focus on global rankings, outlines the key opportunities and threats and draws action plans for the industrial, mining and trade sectors in both macro and sectoral levels.

It also identifies top priority sectors for investment so that they can achieve the desired level of industrial development while setting targets for production and export of selected commodities.

The document focuses on mobilizing the private sector and laying the foundation for its active participation in the economy. In the preface of the document, the role of the government has been explained as supporting, coordinating and monitoring for proper implementation of the strategic policies, while the private sector is described as "the pioneer for development".

> General Policies

The ministry has outlined general guidelines and quantitative objectives for the industrial, mining and trade sectors to the year 2025.

The general guidelines outlined in the document include, among others: improving industrial competitiveness, increasing the share of industrial value-added in the gross domestic product, increasing the share of national industrial value-added in global value-addition, boosting efficiency, assuming a higher share in global exports, boosting foreign investment and developing sustained employment in the industrial, mining and trade sectors.

The quantitative objectives include future plans for various economic indicators in the Iranian years ending in March 2018, 2021 and 2025.

Based on these objectives, the ministry envisions boosting non-oil exports (goods and services) from $63 billion last Iranian year to $103 billion, $130 billion and $180 billion in 2018, 2021 and 2025 respectively.

The plan also sets the target of increasing the cumulative share of the industrial, mining and trade sectors in the GDP from 31.6% last year to 32.5%, 33.5% and 35% respectively during the specified years and absorbing $20 billion in foreign investment by 2025 compared with last year's $500 million.

Iran currently ranks the 130th economy on the World Bank's ranking of 189 countries in terms of ease of doing business. The plan seeks to achieve a rank of 100 in 2018 and eventually improving it to 80 in 2021 and 60 in 2025.

It emphasizes headway in the process of accession to the World Trade Organization to become a permanent WTO member by 2025. Iran was granted observer status by WTO around a decade ago but a series of actions remain to be taken by the government to overcome challenges in the way of joining the organization.

> Prioritized Industries

To achieve the objectives for the industrial, mining and trade sectors within the set time period, the ministry has prioritized economic activities and industrial sectors based on factors such as value-addition, job creation, export value and sustainable resource-based completive advantage (SRCA).

Of the 23 industrial and mining activities studied, those related to production of chemical products, non-metallic mineral products, basic metals, food and beverages, petroleum industry, textile and clothing and transportation have been highlighted and listed as high priority industries for investment.

Moreover, high-tech industries such as biotechnology, nanotechnology, aerospace, artificial intelligence, computer science, optic and photonics and nuclear physics have been mentioned as key drivers of economic development due to their high value-addition and fast pace of development.

> Action Plan

After outlining the general policies for industrial development, the document outlines a set of strategies for implementing objectives in the macro level.

The strategies include, among others: improving the competitiveness of enterprises; boosting foreign investment; merging the industrial and mineral enterprises to form larger units; development of knowledge-based and high-tech industries; diversifying the financial instruments; marketing and brand creation for national products; expanding exploration, extraction and production of strategic metals and development of electronic trade and retail marketing.

> Sectoral Action Plan

The ministry has prepared detailed action plans for seven selected industrial sectors, namely: automotive, steel, textile and clothing, cement, tires and tubes, home appliances and ceramic tiles.

Sectoral plans for other industries including food and beverages, pharmaceuticals and medical devices, industrial machinery and equipment, marine industries, mines, petrochemical and chemical industries are also being prepared and will be released in the near future.

The National Vision Plan envisions Iran becoming the top automotive manufacturer in the region while ranking fifth in Asia and 11th in the world by year 2025.

The plan emphasizes creating centers in the region for manufacturing and export of automotives and auto parts by reputed domestic, joint venture or international brands, attracting domestic and foreign investments for employment of modern technologies and creating centers for design, test and engineering services in the region.

The Vision Plan also envisions manufacturing 55 million tons of crude steel by 2025 to rank as the world's seventh largest steel producer.

The ministry's major objectives in the steel sector include: mining exploration and steel production at optimum levels, maximizing profitability of the value chain, upgrading product quality to global standards, promoting the use of modern technology and maximizing productivity in accordance with global indices.

In the textile and clothing sector, the 2025 Vision aims for the third regional and the fifth global ranking, with emphasis on boosting competitiveness, technological advancement and improving productivity of human resources.