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EPCI Chief:
Breaking the Imports
Taboo
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"The
export per capita of each Iranian is around $500 or half of the average
global per capita." |
The
anticipated figure by the government in its budget bill for non-oil exports by
the end of the third five-year development plan was $37 billion but this
figure was later revised by Parliament and the government itself, to $27,693
billion.
It should be noted that the objectives set
forth for non-oil export during the five-year development plan should not be
judged on the basis of the average annual export volume and concluded that
since during the first half of the plan only $10 billion of non-oil goods have
been exported then during the remaining two and a half years, the same amount
of earning will be attained. Such a comparison is not correct because
according to provisions of the development plan, the volume of non-oil exports
is to be increased gradually and by the final year of the plan, the figure
will grow in proportion. Therefore, it is natural that the objectives set for
the first half of the development plan differs from those foreseen for the
second half.
Here we should try to find out why the
objectives have not been achieved and determine the stumbling blocks. The
country’s economic and export policies should be devised in a manner that the
set targets that can be achieved. Whether we will reach the set goals or not
will depend on various economic factors within the country’s economic
performance, but in general if we compare the figures related to non-oil
exports during the first half of the five-year economic development with the
previous year we will notice a considerable improvement. In the first and
second development plans only 65% and 57% of the objectives were achieved
respectively but in the first half of the third plan the figures are more
promising.
Ever since the tenure of office by President
Mohammad Khatami, the volume of non-oil exports has kept its upward trend and
we have had no decline in our non-oil exports. In fact our performance in the
past seven months shows more than 11% improvement compared with the
corresponding period of the previous year.
The growth rate in non-oil exports during
the third development plan despite the problems faced by country’s major
production and exporting enterprises has been satisfactory. During the past
few years non-oil export growth rate has been more than 10% which compared
with the country’s GDP growth rate of 5% to 6%, is a considerable achievement.
The growth rate in this sector matches the global export growth rate. The
global export has increased by 10% to 11% in the past few years and
Iran’s non-oil export growth rate during the same period has been
either more or on par with the global growth rate.
If we put the current volume of global
exports $6 trillion and divide this figure by the world’s total population of
roughly 6 billion people then the export per capita of each individual will be
$1000. The export per capita of each Iranian is around $500 – half of the
average global per capita.
In order to reach the global per capita
export rate, we should increase our oil and non-oil exports by at least twice
as much as the current level.
While comparing
Iran with other countries such as
Malaysia, we should look for the reasons behind the enormous increase
in their export volume and find out whether we can adopt the same measures or
not. We should also know to what extent their import has grown and what they
have done to improve their economy.
All the countries used in the comparison,
i.e.
Turkey,
South Korea and
Singapore, have had comparable growth rate in imports in parallel to
their export growth. For instance, if
Malaysia has achieved the staggering export growth rate of $100
billion in goods and services annually, its import volume has also experienced
the same growth rate.
In other words, these countries’ exports
have grown along with their imports. But in
Iran, due to government’s policy of replacing the import goods
with locally produced commodities, the volume of import has declined year
after year. Statistics show that in 1982 and 1983
Iran imported $26 billion of various goods, while last year, the
total value of imported items dropped to $17 billion. And that means that
while the country’s population has nearly doubled during the post-revolution
period, its import which amounted to $20 billion before the revolution in 1979
has dropped to $17 billion.
This shows that the government’s policy to
replace import goods with locally manufactured products to support domestic
producers to achieve self-sufficiency has led to export decline. The Iranian
government has not opened the country’s door to foreign products to be brought
into the country and re-exported with added value, and that’s why our export
has not grown considerably.
The negative attitude towards imports is not
a rational approach because, not all imports are undesirable. Usually, in any
transaction both sides gain some benefits and nowadays it is said that trade
in based on win-win principle and that both sides gain from any transaction.
Having a negative attitude towards import can be harmful. If imported goods
consist of raw materials, machinery and semi-manufactured products, then such
imports could help to create employment opportunities and should not be
considered as harmful. But in
Iran there has always been a negative attitude towards imports.
For instance, if government announces that during the current year import will
rise by $2 billion, the concerned officials will be subject to immediate
criticism. One should ask about the nature of this increased import. When we
acknowledge that the country needs investment to create job opportunities,
then such an objective requires machineries and other facilities which must be
imported. If imported items are used to create employment opportunity and
production of value added goods for export, then such imports should not be a
source of concern, and it is only importing consumer goods that not desirable.
According to figures released by Iran
Customs Administration, in 2001
Iran had trade exchanges with 163 countries of which the balance
sheet with 87 countries was in favour of
Iran and with the remaining 76 countries we had trade deficit.
So far more than 250 various types of
regional and multi-lateral trade agreements have been signed among countries
throughout the world and based on some of these agreements, countries have
given preferential tariff treatments to each other or have arranged the zero
tariff system among themselves. These regional, international and
multi-lateral trade agreements are playing an increasingly important role in
global trade activities.
Iran’s northern neighbors have formed their own economic and
trade cooperation structure. Arab Persian Gulf states have also their own
economic cooperation alliance. Asians have the ASEAN and European nations are
cooperating through the European Union and if
Iran wants to play more active role in world markets it must join
these regional and international trade blocs otherwise it will gradually lose
its existing markets.
Although
Iran is an active member of the Economic Cooperation Organization
(ECO), so far it has not signed a preferential tariff agreement with any
country. Our exporters are facing numerous problems in exporting their goods
to the EU member states,
Central Asia, and
Persian Gulf countries because their competitors enjoy preferential
tariffs in their transactions with these regions. Promotion of exports
requires increased interaction with other nations and also extensive efforts
by Iranian exporters and manufactures to prepare themselves for future
challenges to become more competitive.
In order to promote and facilitate exports a
plan has been drawn up by the Ministry of Commerce. In line with restructuring
and reforming export related departments, the trade representative offices
abroad will be integrated with export promotion centers. Additionally, a
number of departments in the Ministry of Commerce will be dismantled and some
new departments will be established. |
