The Iran-Korea business conference at the weekend focused on introducing new opportunities in Iran. The event was one in several recent gatherings as an increasing number of foreign businesses and industrial leaders visit Tehran to prepare for the resumption of normal relations in the wake of the historic nuclear accord signed in July.
Though sanctions are yet to be officially removed, but in the words of the Korean Ambassador to Tehran, Woong Yeob Song, the event was “perfectly timed.”
The Koreans came with a clear mandate: increasing trade between the two countries. Using greetings in Farsi and referring to Iran as a trustful partner, they expressed their willingness to invest in key sectors like oil and gas, infrastructure projects, automobile, consumer goods, and information and communications technology.
Officials from Eximbank, South Koreas’ official export credit agency, sounded confident in their support for Korean firms wanting to enter Iran. They said they would help accommodate the needs for upcoming projects regardless of the scale, adding that there is no need for delay after the sanctions are eased.
A representative of Eximbank described his bank as the “most aggressive,” saying the lender kept its officer in Iran even during the sanctions. The Koreans announced their interest in returning in November after the NIOC unveils the long-awaited new oil and gas contracts that are said to be more attractive than the previous buyback deals foreign oil giants refused to take.
Elaborating on the bank financing footprint and applicable financial tools, the bank’s CEO Young Soo Kim discussed interbank credit and forfeiting facilities and said negotiations are underway to reestablish “framework agreements” with the Tehran government.
At one point Young struggled to address questions regarding equity financing and Iran’s frozen funds in two Korean commercial banks, giving the impression that Eximbank is willing to act only as an export credit agency.
The deputy general manager of Korea International Trade Association for Asia and the Middle East, Kangpyo Park classified key areas for bilateral cooperation as the oil and gas industry, construction, automobile, ITC, e-commerce, shipping and the food industry. He also emphasized on small and medium projects which do not need financing from Eximbank.
Park also recommended the use of mobile and credit card payments for recording all transactions, saying these would help increase government tax revenues. He also discussed some “surmountable challenges” such as Internet speed, high tariffs, logistical issues and protectionism measures as Iran is not yet a member of the WTO.
These challenges were addressed by Ahmad Jamali, director of the Organization for Investment, Economic and Technical Assistance of Iran. He said the government has pledged to cover all non-commercial risks including money transfer risks, nationalization, expropriation and confiscation, government intervention and breach of contracts.
The Iranian co-host, the Tehran Chamber of Commerce – commonly referred to as the ‘private sector’s parliament’ — gave voice to government measures in attracting foreign investment. Iranian delegates also referred to Iran’s geopolitical importance with abundant natural resources, market size and young population. Among the senior memberss of Tehran Chamber of Commerce, Shams Ardekani suggested starting cooperation in the field of financial services and asset management as they are complementary and necessary for investment.
Financial Tribune met some Iranian private sector representatives who said they were mostly interested in the transfer of knowledge and expertise rather than financing.
Iran’s private companies, it seems, look to South Korea as a springboard to promote their exports and use Korean reputation to build their own brands.
While members of the two organizing committees were busy networking and negotiating, there was not much information about the terms and conditions of trade. Informative slides used by speakers hardly drew the attention of the audience.
