Officials say they also want to work on political and cultural ties
Iran is working to bring bilateral trade with Iraq up to $10 billion in coming years. Iran wants to strengthen trade, cultural and political relations with Iraqi Kurdistan Region.
Every six months, the Iranian border governorates and Kurdistan and Kurdistan governorates plan to hold a meeting. The next meeting will be in Iran's Sna City. On the Iranian side, the meetings will be led by Kazmi Qomi, head of Iran-Iraq trade relations and former Iranian ambassador to Baghdad. On the Kurdistan side, the meetings will be led by Hersh Muharram, head of the Region's investment board. Meanwhile, four joint committees have been formed on both sides to deal with trade, electricity, border crossings and governorates. These developments came after an Iranian delegation, made up of business leaders and government officials, visited Kurdistan Region. The visit came during an Iranian trade exhibit in Erbil, capital of Kurdistan Region.
The exhibition included 135 firms from 14 Iranian provinces, with a particular emphasis of the Iranian province of West Azerbaijan, which borders Iraqi Kurdistan.
Infrastructure projects are underway in Iranian Kurdish cities bordering Iraqi Kurdistan, are they are expected to increase the local volume of trade further in coming years.
Iranian officials said these exhibitions are not just public relations exercises -- over the past few days, tens of millions of dollars worth of contracts have been signed between Iraqi and Iranian businesses.
"The level of bilateral trade between Iran and Iraq has reached $7 billion; while in 2007, the trade level was no more than $1 billion," said Deputy Iranian Trade Minister Hamid Safdel. He added: "We have a wide platform to expand this trade level to up $10 billion in the near future." He mentioned that in addition to trade, Iran will work to develop political and cultural relations with Kurdistan Region.
Iran sees Kurdistan Region as a crucial gateway for the the rest of Iraq.
Iran currently has a little investment in the Region. "The joint investment between Iran and Kurdistan Region is no more than $2 million," Hayder Mustafa, general director of studies and information at Kurdistan Investment Board, told the Globe.
Head of Foreign Trade Relations at the Ministry of Trade Ismael Muhammad said the majority of Iranian trade to Iraq is food and plastic materials.
During a meeting with the Iranian delegation, Kurdistan Region Prime Minister Barham Salih called for expansion of cultural ties between Iraqi Kurdistan and Iran.
"We are keen to increase bilateral ties and we hope the groundwork will be prepared for the expansion of relations, especially in the cultural areas," Salih said. He added: "Fortunately, Iranian and Iraqi officials are currently determined to enhance bilateral ties and have exchanged numerous visits to pave the way for the realization of this goal."
In January, the Kurdistan prime minister visited Iran and met with top Iranian officials, including Iranian President Mahmoud Ahmadinejad. During the meeting, Salih signed a number of agreements with Iranian officials to open a number of industrial areas in Kurdistan Region.
Iran is trying to build better economic relations with Kurdistan as the U.S. Obama administration has placed more sanctions on Iran and is isolating the Iranian economy further.
Iran is trying to compete with Turkey for trade with Iraq. The volume of business between Iraq and Turkey, including oil and gas, trade and contracting was around $10 billion in 2010, putting Iraq fourth among Turkey's economic partners. Once Iraq starts to produce its full potential of oil and gas, it could easily become Turkey's top partner.
In the meantime, Kurdistan Region is among Turkey's top 10 trade and business partners. Turkey considers Kurdistan vital to its interests. The two share a 350 km border, and Turkey views Kurdistan as a gateway to Iraq and other Middle Eastern countries. However, Turkey has only one border crossing with Iraq, while Iran has up to seven border crossings along its 1,458 km border, with three of them in the Kurdistan Region.
Musa Muhammad Tofiq, an economist at Salahaddin University, said Iran can't beat Turkey when it comes to business with Iraq for two reasons. The first reason is that Turkish companies have more freedom from their government than Iranian companies. Secondly, Turkish goods are of higher quality than Iranian goods.
© The Kurdish Globe 2011
