Domestic Economy

All-Out Efforts to Foster Exports

All-Out Efforts to Foster ExportsAll-Out Efforts to Foster Exports

The removal of anti-Iran sanctions per se will not result in a thriving export industry, create jobs and promote economic growth, said the minister of industries, mining and trade at the First High-Level Symposium on Industrial and Trade Policies in Tehran on Saturday.

“Investment and production need to be export-oriented. Based on world figures, each unit of investment by foreigners would add two units to exports. To foster exports and secure foreign capital, transparent and attractive policies need to be introduced,” Mohammad Reza Nematzadeh was quoted as saying by the Persian daily Forsat-e Emrooz.

Nematzadeh underlined the importance of export incentives and rewards as well as brand building, and said entities that create jobs using foreign brands are entitled to 50% exemption from income tax, if they manage to export 20% of their products.

Earlier, the head of Trade Promotion Organization of Iran, Valiollah Afkhamirad, had announced that the government has proposed both cash and non-cash incentives to promote competitiveness of Iranian products, such as easing transport, reducing the banking commission exporters have to pay and granting loans to the tune of $200 million to support the export of technical and engineering services to Iraq.

“Promoting exports is crucial in reviving the economy, since more exports means more jobs and more revenues for the government through taxation,” said the head of Mining and Mining Industries Commission of Iran’s Chamber of Commerce, Industries, Mining and Agriculture, Bahram Shakouri, last week.

Stressing the role of government support in propping up exports, the official said: “Developing countries such as Malaysia and Singapore have provided low-interest loans and incentives to their exporting industries. These countries are now controlling large shares of global markets and are rapidly developing.”

According to reports by the Ministry of Industries, Mining and Trade, Iran has set a goal of exporting $77 billion worth of non-oil goods by the end of the current Iranian year (March 19, 2016), $61.1 billion of which will account for goods exports and $15.6 billion for export of services.

Last year’s figures indicate that the export value of non-oil goods and services stood at $50 billion and $13 billion respectively.

 Industrial Sector: Driver of Growth

As another keynote speaker, senior economic advisor to the president, Masoud Nili, told the symposium on Saturday that over the past 25 years, the industrial and services sectors constitute 70% of the country’s economic growth.

Earlier, head of the Institute for Trade Studies and Research, Mohammad Reza Razavi, said the average growth in the industrial and mining sectors has been at least 1.5 times higher than the overall GDP growth during the third (2002-7) and fourth (2007-11) five-year development plans.

According to Razavi, economic growth during the third and fourth FYDPs stood at 5.8% and 4.8%, while the industrial sector grew by 10.6% and 7% and the mining sector by 6.2% and 13.4% respectively.

President Hassan Rouhani on Saturday referred to the draft of a package of measures by a working group composed of three major policymaking entities, namely the Central Bank of Iran, the Ministry of Economic Affairs and Finance, and Management and Planning Organization, which is aimed at beating the ongoing recession in the capital market and devising policies to boost economic growth.

“The road ahead will lead to economic growth, non-oil exports, attraction of local and foreign capital, and investment of Iranian expatriates, and jobs for the educated youth,” he said.

Prominent Iranian and international economists and analysts discussed trade and industrial issues in the two-day event, which was organized by the Institute for Trade Studies and Research, and sponsored by the Ministry of Industries, Mining and Trade on October 10-11.