May 08 2012
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Iraq top trade partner again
Question (Iran Daily's reporter) : Are necessary grounds prepared for turning Iraq into a hub for re-exporting Iranian products?
Answer (Jahanbakhsh Sanjabi): At present, Iraq is not experiencing good conditions in terms of exports. Its export items comprised of date, leather and ferrous scrap for a long time.
Iraq imports over 95 percent of its consumer goods. However, Iraqi ports cannot even handle their own affairs.
In fact, Iran, Turkey, and Jordan have become hubs for re-exporting goods to Iraq. Thanks to the investment made by Iraq in Arvand Rud and Persian Gulf ports, it seems that this Arab nation can turn into a re-export hub for neighboring nations particularly Iran.
To this end, grounds such as increasing jetty capacities and constructing transportation terminals, providing facilities for domestic transportation and transit, providing customs facilities and setting necessary regulations should be prepared.
Fortunately, satisfactory agreements have been inked with the Iraqis in the banking sector. We are witness to the launch of joint banks and branches of Iranian and Iraqi banks in both nations.
Today, Iranian banks Melli, Parsian, and Eqtesad-e Novin have opened branches in Iraq. Karafarin Bank is expected to join them in near future. In return, Regional Investment and Development Bank (RIDB) has opened a branch in Tehran. Other Iraqi Islamic banks seek to establish branches in Iran. Numerous exchanges conduct money transfer and transactions between the two countries.
In fact, Iraq shoaculd take serious measures to prepare the needed infrastructures in an effort to boost its foreign trade.
Iran conducts a large portion of its exports to Iraq via border markets. Is promotion of this type of export in our interest?
A better management should be made on border markets. Apart from promoting peddling business, we should move towards global trade.
What events will take place in terms of the export of technical-engineering services this year?
We exported $1billion of technical-engineering services to Iraq in 2009. The figure dropped to less than $200 million in 2010. Fortunately, we will witness a leap forward in this sector this year; since the value of agreements signed so far has exceeded $1billion. However, implementation of all agreements will last one year. Therefore, we cannot consider them as this year's revenues. It seems that Iran can earn $3 billion revenues by exporting technical engineering services to Iraq. Iraq has anticipated a $100-billion-budget for its development projects. Given the high ability of Iran in providing technical engineering services, proper cultural ties and skilled manpower, we hope that we can overtake the rivals.
Iranian companies are constructing tens of thousands of housing units and townships in north, south, and center of Iraq.
Currently "10 *10" project is being implemented with the cooperation of Iranian, European and Turkish firms at the cost of $10 billion. This project is being implemented in Sadr Township, Baghdad, in two phases this year--each phase includes 85,000 units.
We also inaugurated 162-megawatt power plants in Iraq last year. Companies such as Sunir, Mahtab, Mapna and other energy and electricity firms won eight projects through tenders last year. In addition, the project for construction of a 400-megawatt power plant has been ceded to the Iranian companies. This year, Iran will establish three cement factories in Iraq. Moreover, 30 investment projects, finalized in Iran-Iraq economic conference held last July, will be implemented this year. We plan to invest $30 billion in Iraq through a 10-year program. If the aforesaid 30 projects are completed this year, joint investment with Iraq will reach $2 billion.
Which countries are considered as our rivals in Iraqi market? What are our potential advantages?
Turkey, Syria, Saudi Arabia, and Jordan are our serious rivals in terms of commodities. We rank after Turkey and Syria. Saudi Arabia is in the fourth place. Our regional rivals are stronger than us in terms of exports.
China and India are our other rivals in the export of consumer goods including home appliances, garments and medicines.
Lebanon is our serious rival in construction sector. Egypt and Lebanon are our competitors in cultural affairs.
We have advantages such as cultural collaborations, political, religious and ethnic commonalities with Iraq.
Shiites account for 70 percent of Iraq'spopulation. This can provide a good motivation for both nations to promote ties. Both countries have similar food tastes.
Iran boasts high technology across the region--beyond Saudi Arabia, Syria, and Jordan.
We have skilled manpower. We also possess our abundant mineral resources and ability to provide raw materials for production units.
Has bilateral trade grown since the downfall of Saddam Hussein?
The mutual trade has witnessed a rising trend since 2003. Bilateral trade has reached $7.5 billion from $280 million in 2003.
We witnessed a drop in mutual trade in 2010. How much of it pertained to the implementation of Subsidy Reform Plan?
A: This was due to the transportation costs. The shock caused by liberalizing energy costs led many Iranian export items to lose their competitive power and be removed from Iraqi market. However the situation gradually ameliorated. But if the second phase of energy subsidy cut will be implemented, Iran's exports will certainly drop again.
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