Foreign Trade Crucial to Economic Revival

EghtesadOnline: Access to global markets is indispensable to the government's economic reforms, the first vice president said, seeking to strengthen the government's case for revitalizing foreign trade in the face of a conservative resistance.

News ID: ۷۴۲۶۰۱

09 July 2017

"Our interaction with the world is aimed at developing the financing market and obtaining know-how. Today, we have come to the conclusion that the 80-million-strong country needs international markets to tackle high unemployment," Es'haq Jahangiri was also quoted as saying by ISNA.

He was addressing a ceremony in Tehran on Saturday to commemorate the National Industry and Mine Day.

The government has faced fierce criticism from powerful conservative opponents for failing to carry out a pledge to revive the Iranian economy, despite the removal of international sanctions early last year, according to Financial Tribune.

Sanctions were lifted under the 2015 nuclear accord clinched with the six power nations after 18 months of negotiations overseen by President Hassan Rouhani.

But the pact has come under attack by conservatives who claim that the curbs Rouhani's team of negotiators accepted on Tehran's nuclear program in return for the sanctions relief conceded too much to the western side.

They believe Rouhani's plans are highly focused on capitalizing on the opportunity emerging in the absence of sanctions to channel foreign investment and technology into the untapped domestic market.

They argue that the opening to international trade might be exploited by western powers to establish a foothold in the country and continue with their hostile policies.

"An isolated country that builds fences around itself cannot claim to take the lead in industrial development," Jahangiri said.

The fierce conservative onslaught, however, could not deprive Rouhani of an extended mandate in May's election, where Jahangiri withdrew his candidacy in support of him.

***Elevated Int'l Status

During its first term, the government strove to create an atmosphere conducive to closer interaction with the world and promote Iran's global status as a country best known for its rich culture and civilization, so it could successfully press its demands and defend its rights in the international arena, Jahangiri noted.

Highlighting the government's proven foreign policy record, he said, "By implementing the JCPOA, we managed to take the first steps toward converting Iranophobia to Iranophilia. An international wave of enthusiasm arose for doing business with Iran and we witnessed that the [easing of sanctions] triggered a huge immediate influx of foreign investors."

JCPOA stands for the formal name of the nuclear agreement, the Joint Comprehensive Plan of Action.

But much to Iran's frustration, the remaining US non-nuclear sanctions, which were not covered by the action plan, have dampened that enthusiasm for conducting transactions with Iranian partners.

Those sanctions prohibit the deals with Iranian businesses being cleared using the US dollar and financial system.

Foreign firms and banks have also frequently pointed to lack of transparency in Iran's banking sector and regulatory issues as reasons for staying clear of Iran's economy.

Jahangiri stressed the need to overhaul the poorly privatized economy, as the status of the private sector conveys a strong impression to foreigners about business security in Iran's resurgent market.

"The private sector will not properly take shape as long as there is corruption and rent-seeking … A healthy economy could not be created without promoting transparency and exposing those who exploit rent-seeking," he said.