The first step toward Iran’s full membership at the World Trade Organization was taken by accepting Iran’s membership request at an organization which controls over 98% of the world economy with 149 member countries.

For a powerful presence in global trade two trends should be followed in parallel. Firstly, Ministry of Commerce as representative of the Iranian government and the negotiating team should compile Iran’s trade regime in cooperation with all ministries and organizations within frame of WTO’s regulations. It should then be translated and presented to a working group, which will be established by the end of 2005, and will probably comprise 10 volunteer member countries with the highest level of trade ties with Iran. We must try to get as much privileges as possible during bilateral and multilateral negotiations that will follow and also give certain concessions.

China, which recently joined the world body, will most likely be among the working group to delve into Iran’s membership and will call for privileges (if we have preceded China to the organization, we could have asked for privileges). Anyway, expertise and capabilities of negotiating team will play a crucial role in this regard.

The second and more important trend involves Iranian corporations and organizations which form the main factor determining Iran’s success in global competition. The more those organizations and corporations enjoy good management as well as long-term strategies in addition to modern management, international marketing and development capabilities and the more their readiness for engaging in world-class competition; the more successful will be our negotiating team.

It seems that the membership process will bear fruit over 3-7 years. That is, inefficient economic organizations will have a maximum of 7 years to choose whether they want to survive or be phased out due to inability to compete with foreign counterparts.

Now, after accepting Iran’s membership request, the only membership applicant is Syria, which has thus far failed to get consensus of member countries. Some 28 countries including Iran should be recognized as qualified for membership through negotiations. Also, 12 countries including Vatican, Equatorial Guinea, Sao Tome and Principe have not yet handed in a request for membership.

The main question is to what extent Iran is ready to join the World Trade Organization? Despite sporadic efforts made in various parts of the country, which resulted in an economic growth rate of about 6% over the past 3 years (due to unprecedented hike in oil price), figures indicate slow pace of Iran’s national economy toward internationalization.

The main cause for underdevelopment is state control over more than 75% of economy. The government is both client and contractor; both seller and buyer; both supervisor and economic agent. Iran’s economy has not been engaged even in a mild domestic competition let alone fierce international rivalry. Our per capita production is one-tenth the global average (Iran’s per capita production stands at about $3,000, while the figure for the United States is about $39,000). This means 10 Iranians produce as much as one person according to global standards. Per capita figure for research and development in our country is $9 while it is 700-950 dollars in industrial countries. Has management of apparently privatized companies (such as Social Security Organization and State Pension Organization) been really privatized during past two years when privatization drive has taken on more speed? A liberalized economic system requires an open political and social atmosphere; that is, compliance with supply and demand principle both in economic and political spheres.

Another major challenge facing the country with regard to joining the World Trade Organization is backwardness of the governmental banks whose traditional and inefficient structures as well as working in an unrivaled environment through heavy interests rates (up to 26)% as compared to 2-3% interest rate considered by their foreign counterparts, has practically rendered them incapable of competing with professional international banks that are efficiently managing liquidity in industrial and developed countries. It is noteworthy that Germany’s Deutsche Bank is getting ready to render services to more than one billion customers as of 2008.

The 20-year development outlook plan has projected successful interaction with global economy by making Iran top regional power while the Fourth Economic Development Plan has projected an annual growth rate of 8%, 2.5% of which should be realized through productivity rate.

Low productivity rate (of human resources, capital and equipment) which is mainly attributable to state-run management and lack of incentives among civil servants, is one of the most important challenges whose solution should be found through suitable, scientific ways. Massive state bureaucracy of a government, which is still facing budget shortage and high inflation despite unexpected leap in oil revenues and collected tax, has faced the Iranian economy with a crisis of efficiency, which is constantly spiraling up.

The overt unemployment rate stands at about 15% and unemployment crisis is still dealing blows to the ailing domestic economy (China, with a population of 1.36 billion enjoys an unemployment rate of zero and negative inflation).

The 20-year development outlook plan will not automatically guide the country toward expected success and progress; we also need to come up with trade, industrial, agricultural as well as service strategies for many corporations.

Are our assembly industries capable of competing at an international level? Do we enjoy comparative advantages in all industries including steel, automobile, cement, textile, and home appliances? Do we have to spend all limited resources of the country on those industries because they have created jobs?

We export Pride sedans to Syrian and sell them 3 million tomans there, while the same car is sold 6.5 million tomans inside the country. In fact, domestic customer pays the cost of lack of competition in the country. Iran’s membership at the World Trade Organization will make all these fields transparent.