Economy, Domestic Economy

Iraq Accounts for 70% of Engineering Services Export

Iraq Accounts for 70% of Engineering Services ExportIraq Accounts for 70% of Engineering Services Export

Iraq accounts for more than 70% of Iran’s exports of technical and engineering services, Mohamad-Reza Ansari, the head of Iranian Technical and Engineering Services Exports Association, said on Monday.

“Iran has the capacity to export $25 billion worth of technical and engineering services every year,” he was quoted by IRNA as saying, noting that Iraq is in the state of recovery and reconstruction and therefore it is in dire need of engineering services.

“Today, Iraqis need wide range of services including road and bridge construction, water, electricity, gas, pipelines, refineries, airports and power stations.”

The IS terrorists’ presence in parts of Iraq and the insecurity engulfing the country is a major obstacle restraining bilateral trade. Foreign-backed terror groups, namely Al-Qaeda, the IS and other lesser sectarian and ethnic outfits plus mercenaries from almost 40 countries have for years unleashed a wave of death and destruction in the war-battered country and almost devastated the once-flourishing oil economy. Parts of Iraq and Syria are now effectively under IS control while a US-led coalition is using airstrikes to flush out the militants from those regions.

Ansari said the Iraqi government is trying to introduce a number of administrative reforms regarding management and foreign investment, calling on Iranian companies to assist the neighboring country.

Urging the Iranian manufactures to take necessary steps to build confidence in the Iraqi market, he said: “The Iraqi market is potentially ripe to attract billions of dollars in exported commodities. Therefore, Iranian exporters and manufacturers should gain the confidence of the Iraqis by supplying high quality products to that country.”

Accounting for 17 percent of Iran’s exports, Iraq is considered the second most favorable destination for Iranian products. Iran’s major exports to Iraq include industrial machinery, food, construction material, home appliances and a variety of equipment for civil projects. Observers and senior officials in Tehran have been quoted as saying that non-oil trade with neighbors and beyond has been hampered due also to the western economic sanctions imposed on Iran over its nuclear energy program. About $400 million worth of technical and engineering services were reportedly exported to Iraq during the first ten months of the current years.

Trade between Iran and Iraq has experienced a twenty-fold increase over the past decade following the fall of former Iraqi dictator Saddam Hossein. However, both parties believe that through strategic trade agreements, mutual trade could reach $25 to $30 billion a year.

Tehran and Baghdad are embarking on several initiatives including the establishment of a new joint bank with the private sector’s assistance in a bid to facilitate financial transactions between the two sides and further boost bilateral trade.

  Iran-Iraq Conference

Senior Iranian and Iraqi officials and business leaders met in Tehran last month to discuss new venues for expanding trade and economic ties and identify and eliminate hurdles to closer interaction between the two neighbors. The timely occasion was the ‘Iran-Iraq Special Economic and Trade Opportunities Conference.’

As per available data, 2013 registered high levels of commercial exchange between Iraq and Iran, which reached more than $12 billion according to the head of the Joint Iran-Iraq Chamber of Commerce, Yahya al-Es’haq, who is also Iran’s former commerce minister and a prominent private sector campaigner.

The government in Baghdad has on several occasions strongly supported increase in bilateral trade. Obviously not satisfied with the current level of economic exchanges between the two private sectors, Iraqi authorities have in particular called on Tehran to play a more effective role not only in boosting trade but also in improving security conditions there, the Persian daily Forsat Emruz reported.

The Iraqi government hopes that increase in trade will help augment stability in the region in light of the “economic and political influence of Iran,” said Ja’far al-Hamdani, head of Federation of Iraqi Chambers of Commerce speaking at the two-day conference.

Expressing dissatisfaction over the current level of commercial exchange between the two Muslim nations, he noted that despite the growing presence of European countries such as Turkey, Greece and Italy in the emerging Iraqi market, fostering economic relations with Iran is “still a top Iraqi priority.”

The Iraqi official referred to “cross-border transport issues and banking restrictions as well as problems associated with the re-export of Iranian goods via Iraq” as barriers to two-way trade relations and urged the joint chambers to effectively address the pressing issues.

Addressing the conference, Al-Es’haq underscored the role and significance of trade between the two sides in “improving the overall economic climate as well as security in the region.”