Economy, Domestic Economy

Majlis Puts Brakes on FTZ Expansion

Majlis Puts Brakes on FTZ Expansion Majlis Puts Brakes on FTZ Expansion

Recently lawmakers rejected the bill to establish dozens of new special economic zones, arguing that the move, in the runup to the parliamentary elections, might be politically motivated.

Generally, these designated zones are meant to increase trade, attract investment and create jobs, as regulations such as taxation and duties are eased there.

Opponents of the bill argued that free trade zones are synonymous with a rise in corruption, tax evasion and land grabbing. They say instead of being the gateways to exports, these areas have turned into platforms for imports, giving rise to unemployment and a non-productive economy, the Persian weekly Tejarat-e Farda reported.

Majid Reza Hariri, a trade analyst, believes that the main problem with Iranian FTZs is that they lack a clear strategy.

“In other words, we don’t know why and for what purpose were they created. These zones are mostly established under public pressure, their representatives in Majlis or provincial governor generals’ offices and consequently the government,” he said.

“Of course, there are examples of successful FTZs, such as Asalouyeh, which have really helped promote economic development in the energy sector. But history shows that it is not the locals of Kish, Qeshm, Arvand or Aras who gain the most, rather importers are the main beneficiaries.”

As per statistics released by Iran Customs Administration, more than 45,300 tons of goods were exported from Iranian free trade zones and special economic zones in the southern provinces in the last Iranian year, which ended on March 20, 2015.

The five major southern FTZs and SEZs, namely Chabahar, Qeshm, Imam Khomeini Port, Asalouyeh and Shiraz, exported more than $97.8 million worth of commodities during the period, reported.

Pars Special Energy/Economic Zone in Asalouyeh, Bushehr Province, ranked first in exports with 45,100 tons of goods, mainly crude oil, valued at $95.3 million.

Shiraz SEZ was a distant second, as it exported 134,800 tons of goods worth about $2.1 million.

Kish Free Trade Zone topped in terms of imports, with more than 14,500 tons of commodities valued at $51.5 million. Chabahar FTZ followed with 6,350 tons and $5.5 million.  

Secretary of Iran’s High Council of Free Trade and Special Economic Zones and the president’s chief adviser, Akbar Torkan, said the bill needs to wait for as long as six months before being discussed in the parliament again.