March 2011, No. 59

Trade & Business

Iran, Turkey to Boost Trade Exchanges to $30bn

Our historic mission is to build our countries and there is no doubt that through deep amity between the two nations and firm determination of investors, future of bilateral cooperation between the two nations is very bright and constructive.

Presidents of Iran and Turkey in a business meeting with tradesmen and merchants from both the countries stressed on further expansion of trade exchanges up to the ceiling of $30bn and called for removal of bottlenecks in the way of the two countries in trade and economic relations.

Iran’s President Mahmoud Ahmadinejad pointed to $145bn capital of the National Development Fund in the current year and asserted that the amount would increase to $30bn next year, all of which would support investment in the country. He referred to construction of a big industrial city on the joint borders and said Turkey is a bridge for transfer of Iran’s energy to Europe.

Stressing those economic activities should be based on justice, Ahmadinejad said all should benefit from economy and rejected the notion that in global economic cooperation some should make profit and some others lose.

Also, all banking and monetary systems, economic relations, insurance and institutions determining risk and regulating economic transactions in the world should be based on justice, he said.

Ahmadinejad hailed Turkey as the sixth economy in Europe and said the Turkish nation’s capacities, talents and efforts are much higher.

In the past, he added, Turkey was the first and today it could regain its position as well and this could not be achieved in the absence of a sound planning and identifying the correct path. The Iranian president emphasized on the unified mission of Iran and Turkey and said the world is after a pattern of economy wherein both progress and justice could be found and Turkey and Iran should address the needs of the world today.

He further remarked: “We can present a good model of economy and bilateral cooperation to the world and this is our mission today. But, we have enemies who do not want to see independent states and nations make progress in the world.” The president pointed to the obstacles on the way of progress of both the countries, in addition to the enemies of development of the two nations, and said there are some customs laws, structures, monetary and banking relations and administrative laws that are creating problems. “We are quickly removing such problems in Iran.” Of course, there are obstacles for facilities and installations that the two sides are trying to remove and there are satisfactory opportunities for cooperation of the two nations.

Turkey, a bridge for transfer of energy:  
Ahmadinejad referred to his bilateral talks with Turkish President Abdullah Gul on regional political developments and economic cooperation and said there are abundant energy resources around the Caspian Sea which should be transferred to the West, through the Turkish territory. He said Iran is rich in energy and Turkey is the bridge for transfer of Iranian energy to Europe. Elsewhere in his remarks, the president pointed to tourism capacities between the two countries and said over two million people visit Turkey each year, who not only are not limited but are encouraged as well. Today, citizens of Iran and Turkey can travel without a visa and national currencies of the two countries can be traded.

Establishment of industrial city on joint borders: Ahmadinejad also pointed to further activation of some border markets between the two countries and emphasized that new frontiers have been opened between the countries which would lead to establishment of a large industrial city on the joint borders.

Rail and surface roads are expanding and this has provided ample opportunities for investors in both the countries.

The Iranian president pointed to $10.4bn in Iran-Turkey bilateral trade and said the figure pertained to last year and excluded tourism. He added that based on investment capacities of the two countries the figure would soon increase to $30bn which would not be remarkable with regard to the economies of both the countries.

Ahmadinejad referred to investment opportunities between the two countries and added that despite the financial crisis in the world, the Iranian stock market is the most active in terms of volume, number of transactions and profitability. Meanwhile, the government is also planning for construction of one million urban housing units as well as 200 thousands rural units each year in which Turkish companies could make investment like those which are currently active in this field. Also pointing to forecast for building one thousand km of roads, the president said in tourism and hotel management Iran is ready to accept foreign investment, adding that road building was a suitable area for investment.

$30bn backing for investment:  
Elsewhere in his remarks President Ahmadinejad referred to establishment of a National Development Fund in Iran and said as of this year 20% of oil revenues would be deposited in the NDF for backing investors. He added that the capital of the Fund is currently $14.5bn which would increase to $15bn next year.

He said next year, in addition to banking support, $30bn would be invested in Iran and tradesmen and investors would be strongly supported. In conclusion, Ahmadinejad welcomed and supported expansion of cooperation between the two countries and stressed: “Our historic mission is to build our countries and there is no doubt that through deep amity between the two nations and firm determination of investors, future of bilateral cooperation between the two nations is very bright and constructive.”

Gul’s points of view: Abdullah Gul, the Turkish President who was visiting Iran in his capacity as president for the second time, in the meeting which was also attended by Iranian and Turkish tradesmen, said progress in the field of trade was only possible through activities of the private sector and support of the government.

He said in bilateral political and economic visits between Iran and Turkey, emphasis was made on further expansion of trade cooperation and it was decided to combine economic potentials of the two countries and put them at the service of the people of the two sides.

Referring to economic relations between Germany and France, Gul stressed that the two European countries enjoy expanded economic ties with each other, adding that the same relations should be established between Iran and Turkey. “We, as two politicians, should not hesitate to do whatever in our capacity, in this regard”.  He said inadvertently there are some trade barriers in the two countries which should be removed and such reforms should be in the interest of the two sides. 

Abdullah Gul then referred to the problem of transportation between the two countries and said in the meetings which have taken place so far, decisions have been made according to which the situation has improved and roads would become wider.

He added in his meeting with Turkish industrialists he had asked them to follow economic policies of Iran and assured that such a decision would result in further increasing economic potentials in his country. Stressing that Turkish economy is the sixth most powerful economy in Europe, Gul said in the recent financial crisis Turkish banks encountered no problem and there was no need for the government to assist them, adding that all the success is indebted to the recent economic policies. 

According to Abdullah Gul, Turkey is now in competition with Germany and Italy, all of which is due to the efforts and measures taken in the past.