Welcome to Urbanized World |
Acity is both the cause
and the effect: it gives birth to new phenomena, and is itself affected by them. With
today’s expanding global links and open urban systems, it is not possible to fully
comprehend urban dynamics without bearing a global outlook in mind.
The global trend of urbanization and its effects on globalization is now a focus of many
economists all over the world. They are looking for solutions especially for the nations
in the “South” with respect to urbanization process.
 |
Ali
Abdolalizadeh, Minister of Housing and Urban Development |
Thus it is obvious that the urbanization
process in the South is going on much faster comparing to the North. This process has many
consequences for the nations in the South. In fact, the quick urbanization may be
indicative of rural problems such as poverty, unemployment, unfavorable housing conditions
and insufficient public services. On the other hand, this fast progress is very risky as
far as environmental pollution is concerned. Uncontrollable growth of cities in the South
and inability of governments to respond to the citizens’ needs, may cause many
environmental, economic and social problems which shows the unsustainability of
development in these countries.
 |
| At the
start of 21st century, over 50% of world population — or 3 billion people — are
living in cities; therefore, this age may be called the “starting point of the world
urbanization” |
Globalization has initiated many structural transformations in the urbanization process in
the South and will continue to create such transformations in the future. Let’s look
at the factors which have collectively caused this trend:
* Fast developments in computer and communication
industries have created new environments in the world which overcome the geographical
restrictions, leading to virtual spaces almost free from time and place.
* This cyberspace has produced a new global economy,
in which exchange of information has come ahead of exchanging commodities, while the main
value-added here depends on the information process rather than the production of
commodity. The financial sector of the economy and parts of the service sector are
“weightless”, meaning that there is no need for transporting goods and it takes
only a click to transfer huge wealth from one part of the world to another.
* Physical border is no serious barrier to electronic
waves and instant communications. Extraterritorial factors which are outside the control
of governments are very important in this trend and are instead controlled by
multinational companies. The role of governments are shifting from command and control
toward a mere facilitator. National governments are weakened and new spatial units are
formed as per demands by global economy in form of regions/countries, the metropolitans of
which are integrated with the global economy rather than with their regions or national
economies.
* Globalization has a special geography which selects
metropolitan areas as its development centers and integrates them into a global network.
These metropolises are centers of information, thought and management. Therefore the
globalization process has brought about new functions for cities, and specifically for
metropolitan areas. These functions are as follows:
1. Being a very centralized command center
for connection with the global economy 2. Being a key area for providing capital and
highly specialized service companies 3. A place for innovations in leading industries, and
4. Being an important market for supplying products and innovations.
Therefore, the ongoing restructuring of cities in the South should be carefully analyzed
with respect to these new global functions. However, the interaction between cities should
be looked into with their cultural identity and geography. Thus the most important
question is identifying the structural developments in Southern cities which happen as the
result of globalization in order to arbitrarily direct it toward a multi-dimensional
development.
Two Faces of Globalization of Cities: Several studies have
shown in the past decade that globalization of cities may bring about many problems in
addition to development opportunities that it makes: Poverty and unemployment grow besides
affluence. Competition takes place between cities to absorb international capitals and
this may harm regional integration and the national unity.
On the other hand, globalization in some metropolises shows a different face: metropolis
serves reciprocally as a bridge between global development on one side and national and
regional development on the other.
With the active participation in the global system and safeguarding the cultural identity
a metropolis is a ground for international solidarity and is an example of the global
village, instead of dependence of countries on others.
The second face of globalization has been shown by many metropolises in the North and a
few in the South. Generally, negative aspects of globalization of the South have prompted
international organizations to stress on “giving a human façade to
globalization”.
In an age when the world’s urbanization is progressing at a high speed, the
globalization of cities is taking place out of control. This is a historic opportunity for
statesmen and planners to endeavor for getting positive and favorable results to achieve a
sustainable growth all over the world.
A Clever Move
 |
| M. Khajeh-Dalouie, deputy
minister of housing and urban development |
Many were getting
used to international conferences held in and out of Iran to promote investment in the
oil, gas and petrochemical industries. There were, of course, little indications of
non-oil efforts like promotion of investment in mines and metals or free trade zones. But
Iran’s First International Construction, Building and Infrastructure Investment Forum
(ConBuild 2000) was a true initiative.
The event aimed at expediting and facilitating more than a thousand of the country’s
vital plans in urban development and infrastructure by virtue of the expertise and
financial strength that some global players can bring into the projects.
To find out what potential partners in this forum were offering each other, Iran
International talked to Manouchehr Khajeh-Dalouie, deputy minister of housing and urban
development and secretary of ConBuild 2000, as well as a few foreign participants:
M. Khajeh-Dalouie, Deputy Minister of Housing & Urban
Development; ConBuild 2000 Secretary
The “ConBuild 2000” seminar
was organized based on a variety of motives: Firstly, according to the Third Development
Plan, some projects in the country’s housing and reconstruction sector must be
financed by foreign resources.
Secondly, these projects had to be offered to foreign financiers based on international
methods, and, moreover, to make use of the modern technology in the housing sector. There
is a huge gap between the technology used in the housing sector in advanced countries and
the technology being utilized in Iran which belongs to the past.
Many organizations belonging to both public and private sectors sponsored ConBuild 2000.
About 1,250 projects in various sectors were defined which worth $7.8 billion. Another 340
projects are being prepared and will be offered to investors in the months to come.
What is important for foreign investors is the guarantee of investment that the government
can offer. This guarantee should be clarified in the housing sector. Before the
conference, a motion in this field was prepared and submitted to the government and was
ratified by the Cabinet. Based on the motion, foreign investors can take home their
investment profit in form of exporting any commodity or service from Iran. This is while
the principal can be transferred in hard currency at any time. The motion was a big stride
itself toward attraction of foreign investments.
Also the Law for the Attraction of Foreign Investments, the generalities of which were
approved in the first hearing in the Majlis and is predicted to be finalized shortly,
offers very good guarantees to foreign investors; it considers ownership by foreigners in
form of a 99-year lease.
In the housing sector, a real entity can own a property and a legal entity can own any
quantity of property, too.
During the conference, the officials of the Central Bank, Ministry of Finance and others
elaborated on the policies of their respective organizations with regard to foreign
investment. The minister of finance in one panel informed the participants of the various
tax holidays which is granted to foreign investors. The two-day event was a start toward
the real investments in Iran’s construction sector.
Some 250 participants had registered to take part in ConBuild 2000 from: Germany, France,
Switzerland, England, Italy, the Netherlands, Denmark, Spain, Malaysia, Saudi Arabia,
Egypt, Turkey, South Korea, United Arab Emirates, China, Ukraine, Thailand, Syria and
Iran.
During the past one and a half years negotiations were held with more than 35 foreign
delegates. Their major interest was to be allowed to export goods or services in return
for their investment profit. The goods they are most interested in were minerals, stones,
etc., mainly because their profit will increase through exporting such materials from
Iran.
One of the conditions Iran has set for foreign investors is that they should recruit
domestic work force to implement their projects. They can only bring in skilled manpower
or technology from abroad.
The time in which the said projects are to be completed, differs for various projects. For
example, the development of Imam Reza (A.S.) holy shrine in Mashhad – which is the
largest urban development project in the world – would last for 15 years, while some
other projects are to be completed in one year. The common feature of all these projects
is that they must start before the end of the Third Economic Development Plan, mainly by
using foreign capital.
The projects fall into a number of categories: housing, commercial, cultural and cinema
complexes, tourism, inter- and intra-city transportation and urban services. For urban
renovation projects, the Ministry of Housing & Urban Development has signed an
agreement with Syrians the value of which stands at $100 million. There is another group
to take on projects from Switzerland.
The advantages of investment in Iran’s housing and construction sector include mainly
the low-priced work force, while other sectors, like oil and gas need very skilled
manpower.
Moreover, there are cheap construction materials here. Also, there are some tax holidays
for investments in the housing sector which other sectors do not enjoy. More importantly,
there is a high demand in the construction market. Therefore, the investors may be sure
that what they offer on the market will be sold quickly.
 |
| Hartmann Karl, Sales Manager,
EVG, Austria |
EVG has worked
over 50 years in the field of concrete reinforcing steel and in the past we have delivered
some machinery in the field of mesh production to Iran. We have had many inquires
regarding this new construction material called the 3-D panel.
The attraction of Iranian market is based on the longstanding period of activities that we
have already had in Iran, and the many contracts that we have signed in this country.
Investment in Iran is a matter of people who really work in the fields of financing and
placing investments for certain infrastructure and profit creating activities. Foreign
investment for a machine manufacturer is a little bit more difficult to judge. If new
technology should be brought in together with foreign investment, then it would take a
longer time to happen.
When you talk about foreign investment, you could see it in two major modes: you can have
foreign investment in terms of financing aid that might be provided by some countries and
some big financing companies, or you can see an investment in kind, meaning that some
companies are able to invest some part of their technology in Iran which would benefit the
Iranian society.
As a businessman, I believe foreign investment in Iranian construction sector should
improve in the future. The outlook for the future is quite positive.
 |
| Jean-Paul Michel, Groupe Y,
Managing Director, Switzerland |
Groupe Y is
active in France and Switzerland in the field of construction of houses in large areas and
cities and official research on new ways of construction.
There are potentials for making foreign investments in Iran but it is still difficult.
There are discrepancies between the people who say it is possible to take back your
currency and those who say it is not. This is while the regulations are improving in Iran.
Making investment does not mean only paying money. Investment is something broader: You do
invest if you believe in a project and if you have been involved since the beginning of
the project.
The one thousand and something projects that Iran has listed in the ConBuild 2000 are
based on the standards in the Iranian construction. While the investors need to work based
on the modern standards. Foreigners have a lot to contribute to Iran’s construction
sector. We have the technology and know-how that we can bring into Iran. Iranians are
ready to use the latest technology we can bring. For all these reasons it is worth to come
and it’s worth to see Iran.
There are many signs of openness and it makes the trip very pleasant for me.
 |
| Viboon Sriprasert, Chairman,
Advisor to the President, Thai Contractors’ Association |
ConBuild 2000 is
an excellent forum to link investors and contractors together. They need to know the
projects that Iran offers and the regulations that will be imposed as well as the people
they will work with. Even with the short visit, I found it promising because there are so
many projects on which we can negotiate.
The investment in Thailand is a bit low and we have to seek jobs outside in a number of
promising investments especially in housing, construction, building hotels, etc.
In order to attract foreign investments, the first issue is that foreign investors should
feel comfortable to be here. Iranian people are quite friendly and straightforward, and we
can cooperate with them.
Thailand is very similar to Iran in terms of size, population, etc. We have been facing
the same problems you have, i.e. not having enough houses and infrastructure, 20-30 years
ago. We started building these facilities and even today we have not stopped building. So
I can foresee in 5-10 years time that construction in Iran will be based on international
standards.
I would like to congratulate the new policy to open Iran to the international world. It is
a pity that there is limited trade between Thailand and Iran: We buy your oil and export
our rice here. But there are a lot more areas where the two countries can expand their
ties.
 |
| Luboslav Haban, Commercial
Secretary, Embassy of the Slovak Republic |
The Slovak
Republic is very interested in penetration into this market by opening up new firms and
transferring technology, buy-back operations and setting up joint ventures here. We are
very lucky to once again stress on our preparation for mutual cooperation and we are
preparing for the third economic commission in Tehran which will be held shortly.
ConBuild 2000 paved the way for practical questions and answers, such as how foreign
investors can establish an agency here, how to make some shared participation without
limitation, also on taxation and profit, etc. Former Czechoslovakia penetrated into the
market in the fields of heavy industry, engineering, electromechanics and chemical
products. Slovakia offers the same products especially for auto and textile industries. We
are also ready to offer some components for chemical industries and cooperate in the milk
and paper industries. There is a big horizon for our mutual cooperation.
I hope that business between the two countries will be increasing in the future. We are
ready to render assistance to Iranian traders who are interested in doing business in
Slovakia.
I think the areas which should improve include clarifying foreign investment issues,
including the taxation. The second issue is how to transfer money. There are some problems
in changing currencies.
 |
| Liu Guoqiang, General Manager,
CATIC, China |
The Iranian
market has big potentials and we are here to see if there are good chances for us to
engage ourselves in the development of this country. The Iranian market is very big and it
has all potentials and local materials, while there is a favorable human resource here.
Iran has enough resources for development. There are some other countries whose market is
big but they do not have enough money.
There are many cultural similarities between Iran and China. This makes it very easy for
us to contact with “Iranian friends”. Personally, I believe Iranians are much
better for communications than some other nations. As far as we have understood during the
past 15-20 years, there have not been many construction works in this country. The country
has now a chance for development. It is rich in resources and local materials, so very
soon it will open itself to the outside world to attract foreign investments.
Iran should also attract the people, i.e. the tourists. Some of the countries in the
region have followed flexible policies and opened up themselves to the foreigners. They
have engaged themselves with the international community in all directions. That’s
how the economy can grow.
Iranians should also improve their policies in line with opening up to the foreigners.
ConBuild 2000 is a very good example of this, but the organizers should make it known to
the world by every possible means. |
