crude oil has played a pivotal, though undesirable, role in
the Iranian economy. Oil has been a source of mixed blessing for the country.
It has brought adversity of kinds as much as it has brought prosperity. The
easy earning generated by the export of oil has made the country in a way lazy
and oblivious of its great potentials existing both in terms of human and
natural resources. So in one way or another shaking itself free of the oil
earning has been a major preoccupation of Iran for many years.
It is said Iran gets up to 80% of its
hard currency earnings from the exports of crude oil. What creates the problem
is that the earning has proven to be unreliable and volatile since volatility
and unpredictability have been an undeniable characteristic of the
international oil market.
Let’s not get the wrong impression. Iran
likes to be an oil exporter but does not want to rely on oil exports for its
entire livelihood. Thus, in the past two decades there have been a lot of
efforts put in by the government to cut dependence. However, this endeavor has
been at best partially successful. Some observers argue that the partiality of
success itself has been because of the cozy dependence on oil earnings.
Iran has been experimenting with a
number of ways to realize the desired diversification of its economy for
sometime. One industry that has proven to be helpful to the achievement of the
country's goals is the petrochemical industry. Iran seems to have what it
takes
to help the industry bring in oil's long-sought added value. In fact the
industry can help the country in a dual way: lessen dependence on the imports
of petrochemical products which siphons out hard currency and promotes at the
same time with non-oil export earning if put on the right track. So the
industry is good in more ways than one.
|
It takes more than just raw
materials to attract foreign investment in the competitive international
market. |
The petrochemical industry can help Iran
with its hard currency needs, job creation and recognition if it is developed
enough. But the development of the petrochemical industry on the other hand
would require capital and technology which Iran does not have, or does not
have enough of. One way to do away with the shortcoming has been to open up
and let those who have it come in. So what in effect Iran has been saying in
the past half decade, or ever since the petrochemical industry’s door have
been opened for joint venture with potential investors, has been "raw
materials from us; investment from you", or "feedstock from us and technology
from you; together we can reap the benefits". But how to get the partners for
the technology and investment has been a real challenge. It takes more than
just raw materials to attract foreign investment in the very competitive
international market.
And this is where the NPC’s
international petrochemical forum comes in. To resolve the issue of foreign
investment attraction, Iran has resorted to a number of ways. The most
important of which has been to introduce its potentials, as a market and its
human and material resources as a supplier, through organizing an annual
international forum.
The forum is now in its infancy. It is
only four years old though it has helped Iran in a lot of ways. In the four
years since it was first held, it has helped the country in a lot of ways one
of which has been the signing of $6 billion worth of contracts with domestic
and foreign companies to develop or modernize the industry that stagnated in
the aftermath of the war with the neighboring Iraq.
The $6 billion worth of joint investment
is not the end of the story but just the beginning. Iran needs and intends to
attract much more investment. According to projections, both the investment
and the industry’s productivity should rise by several times before it is a
source of revenue. More important even than the foreign investment in the
petrochemical sector is the know-how which should come from a sincere and
cooperative partner.
According to industry sources there are
indications that the industry has been able to some extent to do what it went
out to do. The forum has produced global enthusiasm among executives of local
and international petrochemical concerns.
