Undue Expectations From Gov’t

Trade Promotion Organization of Iran, affiliated with the Ministry of Industries, Mining and Trade, recently carried out a study evaluating the performance of the top 113 private Iranian export companies.

The study’s results show only 22% of these companies have registered brands while 39% have offices and representatives at export destinations. About 40% advertise on international websites, 41% participate in foreign exhibitions and 44% have ventured into new markets.

“These data pertain to our large, prominent and top exporting companies. Imagine what the figures will be for lesser known and smaller businesses,” Mohammad Reza Modoudi, the deputy head of Trade Promotion Organization of Iran for goods and services export promotion, told Financial Tribune.

 A Case of Role Reversal

Modoudi said the private sector expects the government to undertake the marketing, find trade partners and expand export destinations for them.

According to Modoudi, the government currently assigns export growth targets to the private sector.

“This is while the onus is on the private sector to define the goals as well as the ways of arriving at these targets and then demand the government to take supportive measures. They are the ones who should show initiative and tell us precisely how to back them up,” he said.

Modoudi believes that the first step must be taken by Iran Chamber of Commerce, Industries, Mines and Agriculture, suggesting that a trade promotion organization needs to be formed within the ICCIMA framework.

According to the official, businesspeople who own commerce ID cards are required to pay one-thousandth of their annual sales revenues from both exports and imports to ICCIMA. He called on the chamber to direct these resources toward marketing in major export destinations, opening offices in those countries, helping their members participate in international exhibitions and link Iranian merchants to their foreign counterparts.

Elsewhere in his interview, the TPO deputy questioned the indiscriminate manner in which the government allocates loans to businesses.

Every year banking facilities and incentives are granted to businesses with the aim of creating jobs and for production and exports to increase.

“Yet, should all production units with just any performance be deemed eligible for receiving these facilities,” he said.

“Unfortunately, these facilities target the weak units rather than the more successful ones.”

Modoudi stressed that all we need to do is to avoid putting stumbling blocks in their path.