A total of $1.28 billion worth of commodities were imported into Iran's free trade zones in the last fiscal year (ended March 20, 2019) to register a 36.4% decline compared to the year before.
According to Mohammad Reza Abdolrahimi, an official with the High Council of Free Trade Zones and Special Economic Areas, the imports mainly included raw materials, equipment, machinery and consumer goods.
The official noted that motor vehicle imports witnessed a remarkable year-on-year decrease of 89% to around $53 million, ISNA reported.
According to President’s Adviser and Secretary of High Council of Free Zones Morteza Bank, $118 billion worth of goods have been exported from Iran's free and special economic zones over the past five years while the value of goods imported into the zones during the same period stands at $38 billion, meaning a trade surplus of $80 billion.
“Free zones account for 0.3% of total land area of Iran. They are home to less than one million people,” he was quoted as saying by IRNA last month.
He put the total number of industrial, mineral and agricultural units in these zones at 1,607 and said free zones have generated employment for 285,000 people in the country.
“Easy access to cheaper raw materials has lowered production cost in free and special economic zones considerably,” the official added.
In Iran, free trade zones were first authorized in 1993 in Kish, Qeshm and Chabahar. Later, Aras, Arvand, Maku and Anzali were added to the list of Iranian FTZs.
According to the secretary of High Council of Free Zones, as many as 1,400 industrial units are operating in these seven FTZs.
The term “special economic zone” is commonly used to refer to any modern zone where business and trade laws differ from those on the mainland. SEZs are located within a country’s national borders while free trade zones are usually organized around major seaports, international airports and national frontiers—areas with many geographical advantages for trade.
Debates on the merits of FTZs have been based on their impact on several elements: from social issues like labor rights, environmental protection and urban planning to macroeconomic issues related to their impact on government revenues, employment, trade and foreign exchange earnings.
The primary purpose of a free trade zone is to remove trade obstacles caused by high tariffs and complex customs regulations from a port, airport or border. They are also meant to help the government increase exports at a lower cost, create employment, attract foreign investment and revive deprived and stressed regions.
