Economy, Domestic Economy

Prospect of Development in Transit Sector

Prospect of Development in Transit SectorProspect of Development in Transit Sector

Iran’s new foreign policy has led to advancements in the ongoing nuclear talks with the P5+1 group of six world powers. This has created a good setting for the increase of cooperation in various modes of transport and has particularly brought about the recent development of rail transport between Iran and the neighboring countries of Kazakhstan, Turkmenistan, Afghanistan, and Iraq.

Under the previous government, Iran’s potentials were largely neglected and cooperation was not even extended out to the neighboring nations. The negligence pushed Iran out of touch with neighboring markets and the isolation that followed put a halt to most international projects, so Iran was gradually marginalized and rendered a consumer country, according to an article by Mohammad Damadi that recently appeared in Iran newspaper, a state run Persian-language daily.

To pull Iran out of its previous “consumer” state, the Rouhani administration has placed a great deal of effort into expanding exports of non-oil products. Thus, dependence on oil products for generating revenues for the government is being reduced and international ties are being revitalized.  The development of rail transport has also resumed and Iran’s rail network will soon join those of other countries.

Iran’s aviation industry hasn’t developed in recent years, mainly due to sanctions. Recently, however, Iran’s air fleet has also witnessed positive changes as several new airlines are to be introduced within the country, including several companies in Kish Free Trade Zone in south of the country. Introducing new airlines and the recent aviation talks with Portugal (a member of the European Union) tell of a brighter future for the aviation industry.

The focus of the statesmen’s current procedure is not only on rail transport and the air fleet. Another important issue in hand is the transfer of technologies. High technical knowledge about aviation industry lies at the disposal of the member states of the European Union. If that knowledge is transferred to Iran, dependence on foreign manufacturers in procuring plane parts would reduce and more domestic job opportunities will subsequently be created in this area.

Additionally, fresh schemes need to be introduced aiming for the development of the transit sector. If the government manages to further expand cooperation with other countries, the transit sector will also prosper and Iran could act as a regional trade hub connecting neighboring countries. The subsequent increase in the government revenue will gradually reduce dependence on the export of oil products.

At the same time, the private sector should not be overlooked. Economic growth will come about only if the private sector takes the helm. The government should supervise the whole process to ensure that private businesses get their fair share of the economic activities. Temporary collaboration between the government and the private sector must be replaced with long-term cooperation.  The activities of the private sector need to be monitored and opportunities for signing long-term contracts with foreign parties should be created by the government.  

Damadi, in his article, says that Iran’s rail industry has progressed, but adds that achievements in one industry mustn’t blur our vision regarding others. The aviation industry still faces plenty of problems and must be given higher priority in development projects. Transferring technology is also of uttermost importance here. As sanctions are gradually lifted a great opportunity will be created, allowing Iran to increase cooperation with other countries: a win-win situation for all parties involved.       

Caption: New plans need to be introduced with the aim of developing the transit sector.