Economy, Domestic Economy

Foreign Trade to Save Economy

Foreign Trade to Save EconomyForeign Trade to Save Economy

To have reliable non-oil exports, Iran needs to shift trade away from oil and petrochemical industries.

That’s the core message of an opinion piece in Persian published by the chairman of Export Commission of Iran Chamber of Commerce, Industries, Mines and Agriculture, Seyyed Razi Haji-Aqamiri.

Excerpts of the article are presented as follows:

Non-oil exports not only generate added value for the country, but they also put employment, as one of the key economic indices, on track to trigger recovery.

Non-oil exports boost foreign exchange earnings and help meet import needs to boot. Therefore, it seems vital to revamp exports for gaining a bigger share of global economy, drive growth and reach sustainable development.

Countries seeking economic development should engage in foreign trade.

Latest studies show improving business productivity, as one of the contributing factors to trade development, outweighs the benefits of raising capital. Foreign trade helps domestic entities reach higher productivity at lower costs.

Foreign trade offers new opportunities for economic development by enhancing skills and technology transfer, improving the use of natural resources and, above all, transcending the constraints of domestic market.

For years, Iranian governments gave non-oil exports the brush-off. This significant index was absent in the development budget.

Sectors such as handicrafts, rug and leather were neglected in non-oil exports, as most hopes were pinned on the export of automobiles and petrochemicals.

The performance of President Hassan Rouhani’s administration so far has been good, but it needs to work out a solution to problems associated with devaluation (or market-led depreciation) of national currency and inflation. These challenges were there before the incumbent government but it is up to the administration to solve them, once and for all.

Many illustrious economists have time and again warned against the unreal value of rial and its grave consequences for imports and exports.

The government should mark exports derived from oil off the list of non-oil exports. Other countries’ growing need for petrochemicals is not a credit to us since they need raw materials for innovative production.

To boast reliable non-oil exports, we need to shift exports away from oil and petrochemical industries.

Last Iranian year’s statistics (March 2015-16) show $42.41 billion worth of “non-oil commodities” were exported during the period, posting a 16.11% decline compared with the previous year.

The exports chiefly included petroleum gases and hydrocarbons, liquefied propane and bitumen.