Economy, Domestic Economy

Turkey Aims to Triple Trade With Iran

Turkey Aims to Triple Trade With IranTurkey Aims to Triple Trade With Iran

Turkey aims to triple trade with Iran to $30 billion as quickly as possible after the lifting of economic sanctions made banking transactions with the country easier, Turkish Customs and Trade Minister Bulent Tufenkci said in an interview.

The United States and Europe lifted sanctions on Tehran in January under the deal that limited Iran’s nuclear program. But some restrictions remain, slowing Iranian hopes to reintegrate with world markets.

“Banking and financial transactions have become easier (for Turkey) after the sanctions on Iran were softened, already boosting our business with Iran,” Tufenkci told Reuters in an interview in Ankara.

Trade volume between Iran and Turkey rose to $21.9 billion in 2012, then fell below $10 billion in 2015 with the effects of the sanctions.

The Turkish and Iranian central banks have reopened their connection on the SWIFT global transaction network, an Iranian economy official said earlier this month, in a sign of normalizing banking ties.

Tufenkci also said Turkey’s targets of increasing its exports to $155.5 billion this year, from $144 billion in 2015, and of reaching 4.5% economic growth were achievable.

“It was targeting growth of above 5% in 2017,” he said.

Tufenkci voiced optimism that relations with Russia, which has taken retaliatory economic measures against Turkey after the Turkish military shot down a Russian warplane near the Syrian border last year, would get back on track soon.

The creation of a “green corridor” between Russia and Iran for exporting Iranian agricultural products to the neighboring country is primarily aimed at substituting sanctioned Turkish products, Russian Deputy Agriculture Minister Sergei Levin said in April.

“After the adoption by the government of Russia of sanctions on the import of agricultural products from the Republic of Turkey, the country’s [Russia’s] Ministry of Agriculture is actively working on the replacement of these products, first of all, by goods from Iran. It is this, in the first place, that the order to create a ‘green corridor’ is linked to,” Levin was quoted as saying by the press service of Russia’s North Caucasus Republic of Dagestan.

The corridor will become operational “at full strength” by the end of 2016, he added.

 Turkey to Establish Industrial Park in Iran

Tehran and Ankara signed a memorandum of understanding late Monday, based on which Turkey is to build an industrial park featuring 140 production units in Iran.

“The initial capital required for the project is estimated at $10 billion. About 85% of the workforce in this industrial park will be Iranian,” said Mohsen Jalalpour, the head of Iran Chamber of Commerce, Industries, Mining and Agriculture, in a meeting with Erdal Bahcivan, chairman of Istanbul Chamber of Industries in Tehran.

Deputy minister of industries, mining and trade, Ali Yazdani, who was also present at the meeting, said a Turkish delegation comprising representatives of industrial units will pay a visit to Iran in September to decide on the location of this industrial park, IRNA reported.

Earlier in April, Yazdani, who also chairs state-run Iran Small Industries and Industrial Parks Organization, visited Bashkent Industrial Town in Ankara at the head of a delegation of the ministry officials and heads of Iranian industrial parks. He met with Turkish deputy minister of science, industry and technology, Ramazan Yildirim.

The two sides discussed two locations for the joint investment: one in East Azarbaijan Province’s capital city of Tabriz and the other in Urmia, the provincial capital of West Azarbaijan Province.

According to Yazdani, Turkey is planning to select two of its industrial towns for joint investment with Iran.

As discussed by the Turkish and Iranian officials, the industrial parks will be used for the production of apparel, leather, gold and jewelry, auto parts and decorative stones.

Meanwhile, Iran is also in talks with China to establish another industrial park in Bam Special Economic Zone in Kerman Province for the production of auto parts.

Industrial towns or parks may contain oil refineries, ports, warehouses, distribution centers, chemical plants, plastic manufacturers, airports, food and beverage producers and steel manufacturers, to name a few.

Some industrial parks offer incentives for businesses to locate there, such as tax exemptions.