Private Investment in Free Trade, Special Economic Zones Hit $6.2b

EghtesadOnline: More than $6.2 billion worth of investments were made by the private sector in Iran’s free trade and special economic zones during the first nine months of the current Iranian year (March 20-Dec. 20, 2020).

News ID: ۷۸۶۰۱۸

16 February 2021

A total of 127 trillion rials ($488 million) in local currency, in addition to $94 million [in foreign currency] worth of domestic investments, were made in free trade and special economic zones, showing a 15.45% rise in the former and no significant change in the latter year-on-year, says Mohammad Reza Khazraei-Manesh, an official with the Supreme Council of Free Trade and Special Economic Zones.

“Investments made in local currency in Special Economic Zones amounted to 300 trillion rials ($1.15 billion), registering an upsurge of 237.1% YOY as domestic investments made in foreign currencies reached $4.5 billion over the nine-month period, experiencing no significant change,” he told IRNA.

The official noted that foreign investments worth $153 million were made in FTZs during the same period, indicating a 53% rise compared with the corresponding period of last year.

Khazraei-Manesh did not mention whether any foreign investment was made in SEZs.

“Exports from FTZs and SEZs during the nine months stood at $600 million and around $4 billion respectively, adding that the figures combined show a 20% decline YOY due to the Covid-19 pandemic and US sanctions on the Iranian economy,” he said.

Exports via Iran's free trade and special economic zones account for 40% of the country’s total exports during the seven years since President Hassan Rouhani first took office in August 2013.

According to Secretary of High Council of Free Trade Zones and Special Economic Areas Morteza Bank, exports through FTZs and SEZs reached $169 billion during the period under review.

“Overall imports from these trade zones hit $45 billion over the seven-year period,” he was quoted as saying by IRNA.

Based on the latest figures released by the Ministry of Economic Affairs and Finance, $5 billion (in foreign currencies) and a total of 89.84 trillion rials in Iran’s local currency ($345 million) worth of domestic investments were made in special economic zones by the Iranian private sector during the last fiscal year (March 2019-20), showing a 173% rise compared with the year before.

As of the last Iranian year, a total of 599 industrial units were active in Iran's SEZs creating jobs for around 205,650 people. The figures show a 3% and 18% respective rise compared with the preceding year.

During the same period, $37 million worth of foreign investments were made in Iran’s SEZs.

SEZ’s last year exports hit $13.5 billion, showing a 20% decrease YOY.

In Iran, free trade zones were first authorized in 1993 in Kish, Qeshm and Chabahar. Later, Aras, Arvand, Maku and Anzali were added to the list of Iranian FTZs.

There are 30 SEZs across the country.

New Investments in Qeshm

Three industrial and eight fishery and aquaculture projects were inaugurated on Qeshm Island’s Free Trade Zone via videoconference by President Rouhani last month.

Among these projects were a cold storage facility with a capacity of 21,000 tons and investment of 600 billion rials ($2.3 million), which has created 120 jobs, a manufacturing plant with a production capacity of 1,500 tons of commercial fish feed annually, and an investment worth 110 billion rials ($0.4 million) creating 20 jobs, in addition to a mask manufacturing factory with an investment of $500,000, which has created 15 jobs.

A total of 2,996 billion rials ($11.52 million) have been invested in fishery and aquaculture projects that were inaugurated on Thursday, which have created 426 jobs, IRNA reported.

“The current administration plans to complete 310 projects worth 620,000 billion rials [$2.38 billion] in Iranian free trade zones prior to the end of its term; 100 out of these projects worth over 210,000 billion rials [$807 million] will be launched on Qeshm Island off the Persian Gulf,” said Hamid Reza Momeni, the managing director of Qeshm Free Trade Zone Organization.