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C Hazin, Deputy General Secretary of Tehran Chamber of Commerce
C Hazin, Deputy General Secretary of Tehran Chamber of Commerce

Truck and container

Iran's Efforts for Non-Oil Exports

Mr Chengiz Hazin has been involved with exports since a long time ago even before Iran's Export Promotion Center (EPC, now Trade Promotion Centre, TPC) was established. He was one of the first employees of EPC and though he is now engaged in many areas of state activities that are not related to exports, he has never lost his interest in the field. Presently he is one of the deputies to the General Secretary of Tehran Chamber of Commerce and is also responsible for holding the annual Iran Plast Exhibition.

Events- How did it all begin? Where are we to find the origins of EPC?

Chengiz Hazin - It all began in 1969 when the then Minister for Economy, Mr Ansari, said in one of the meetings of the joint chambers of commerce, that they had come to the conclusion that a center was needed to care for and worry about exports and to increase Iran's industrial exports to one billion dollars within 10 years. Gradually the EPC emerged and was of great help to exporters but even so by the time the Islamic Revolution came about, in 1979 (exactly 10 years after), the country's total non-oil exports, industrial and non-industrial, amounted to 800 million dollars.

Ship Immediately after the Revolution, because of the war with Iraq that followed soon, and the internal problems with exchange restrictions and transportation regulations, non-oil exports dropped to a mere 200m.

Following the Revolution many things happened that made economic conditions very difficult. There was the war with Iraq and at the same time there was a population explosion, economic sanctions and severe mistrust of the Western nations among Iranians, particularly the USA and the UK. So, we resorted to self-sufficiency and import-substitution policies, which damaged our exports severely though they may have helped in other ways. And then we had the rapidly declining value of the Iranian Rial.

Devaluation normally helps exports but our banking system was in such havoc during the early Post-Revolution years that nothing could help our exports. We rapidly fell behind most of the nations that had hitherto been considered to be less fortunate than the Iranian nation, such as Turkey, Thailand, and Malaysia. We had always in the past been stronger than them in the international market. But now we rapidly fell behind.

Many actions were taken that ruined our exports: exporter's guilds were shut up, the powers of the chambers of commerce were reduced, exporters were accused of being smugglers of foreign exchange etc...

Then the war ended and the authorities decided to rapidly industrialize the country. But, perhaps they tried too hard, to do the work too rapidly, because soon our foreign debts approached the 40m-dollar level. However, by now the importance of exports and industrial exports in particular, had been realized and were being emphasized by the authorities.

Since then there have been changes for the better: changes in rules and regulations, improvements in the customs procedures and formalities etc etc.

But we still face serious problems in many areas. In air transportation for example: if we had an effective air transportation system we could easily develop our export of flowers. Our potentials are such that we could even soon become a serious rival for Holland, with proper planning of course.

E- But what are our chances today?

CH- If we are to talk about serious production and exports today and look at things realistically, we must accept that our real potentials lie in industrial exports and export of engineering and technical services. We have excellent potentials in the latter but have so far failed to make effective use of it. In fact our main potential in this area, namely qualified and creative people, are being absorbed by foreign countries. Experience has shown that where we have been serious, and have acted with determination and perseverance, we have made excellent progress. Just look at our growing petrochemical industry. Trends show that within the next few years we shall increase our production of petrochemicals from around 10m tons to almost 70m, and we are increasing our exports at the same rate. Our production of pistachios has grown from 15,000 to 200,000 tons, and so today we export 100,000 tons of pistachios worth one billion dollars, each year.

E- How can we help the engineering and technical sector?

CH- Two points are very important, in my opinion: first, that we have neglected our private sector in general; and second, that we have neglected the engineering and technical sector in particular with all the strength and potentials they have. So, I like to emphasize on both points and plead with our nation, our authorities, to pay far more serious attention to both; to help our private sector in general, and fully support our engineering and technical sector, in particular, and as a matter of urgency.

Unfortunately our private sector has gone stale and does not know quite what to ask from the government. I often see people from the private sector going to a certain ministry to ask for subsides, or the cost of participation in an international exhibition.

These demands are disgraceful to the private sector. What they really want is what the authorities have actually been promising them and has not yet materialized: that is to bring down interest rates, down to one digit on loans given to the private sector entities trying to participate in an international tender. But of course our banks too face problems. In a country where inflation is a two-digit figure - 14% they say though some experts believe it to be closer to 20% - how can the banks provide loans at 9%?

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E- What is your opinion about the transit opportunities between countries north of Iran and the Persian Gulf in the south?

CH- I was coming to that because it is a very important point. The transit program through Iran linking the north to the south is an excellent opportunity we should not lose. We lost our opportunity for trade in Caucasian and most Central Asian countries and in Afghanistan. So, we should make sure of succeeding in Iraq with this transit program. Fortunately, we have acted effectively so far and the size of transit goods is increasing steadily.

We have relatively good roads and railways, excellent ports in the south and our national shipping company, the Islamic Republic of Iran Shipping Line is one of the best worldwide. This transit transportation will develop other industries as well. So, for these and many other reasons we should take the matter very seriously. Fortunately the government has acted correctly and wisely in this respect at least, and the person in charge of the project now is a powerful man. I think it will be a great success.

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