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These are the steps that are directing Iran to economic
globalization, a trend that has gained momentum in the last 10 years. |
Since the establishment of Iran’s
currency reserves account, the banking system has agreed to pay a total of
around $3 billion worth of currency amenities to 580 industrial and production
projects. The head of the currency reserves account’s board of trustees,
Bayazid Mardokhy, also adds that a further 500 projects are under
consideration and this brings the total number of projects proposed to the
board to over 1000. The considerable enthusiasm of the industrial and
production sector can be ascertained from their rush to grab currency in the
two years that the currency reserves account has been operational (the banking
system receives a yearly average of $3.5 billion worth of requests) and
indicates a positive outlook for the economic future of Iran.
Close to 400 projects have received a
total of $1.5 billion worth of currency amenities from the currency reserves
account, with most amenities going to the industrial sector. Some believe the
reduction in service fees for receiving currency amenities also contributed to
the rush of businessmen to take advantage of the account. Previously, the
yearly rate was fixed at 7.5% for all applicants, but the board of trustees
lowered that rate to 2% over the international labor rate.
These are the steps that are directing
Iran to economic globalization, a trend that has gained momentum in the last
10 years. The economy has always had a tendency to go global and all 190
countries are in a way part and parcel of the world economy. The only things
that have changed are the rules of the game, with the World Trade Organization
(WTO) offering certain advantages to its members. Even though the WTO’s rules
and regulations may not govern non-member states, slowly but surely there will
be no operation room for those outside the organization. It becomes quite
obvious what the WTO would mean for our industries, and we must inevitably
give in to the rules and regulation the organization imposes. It is like being
a smoker in a non-smoking country. If you don’t play by the WTO’s rules, you
can not play at all.
The only option left for Iran is to
restructure its economy to an open economy integrated in global markets, while
being a capable partner for other countries in the world. However, we have
experienced benefits from certain sectors even without joining the WTO. The
existence of wide ranging industrial and consumer products in Iranian markets
is an indication of this matter.
Some of our industries have been left
with huge losses, having already been hit by the tidal wave of imports. Many
have approached the government for a helping hand, but the government can no
longer maintain a customs wall to confront the flow of imports. No matter how
high a wall the government erects to protect national industries,
international products will somehow find a way to squeeze their way through.
Some call this smuggling or trafficking, but in reality it is the easy
transition of products that accompanies a global economy. In some fields such
as heavy products and assets (i.e. automobiles) however, the transition is not
conducted as easily and the government will seek to continue to impose
tariffs.
