Production obstacles change nature of Iran free zones
Tehran, Iran, December 2
By Mehdi Sepahvand –- Trend:
Free economic zones in Iran have gradually changed in nature to grow into unfavorable hubs of imports with no real contribution to production and exports.
The problem is due mainly to obstacles that have grounded production in Iran, such as banking issues which hinder the transfer of money for exported goods or imported intermediary products, Sahand Rabiee, a factory owner told Trend December 2.
“Our machines are outdated. When we decide to renew them, there is the need for payment. We would have been able to import the latest technologies from leading countries, but banking transaction are restricted for Iran. So it becomes costly,” Rabiee said.
The banking problems are a remnant of previous sanctions on Iran. The sanctions were removed in 2016 following the Iran nuclear deal, but major world banks are afraid of approaching Iran for fear of US punishment. Also, Iran’s connection to SWIFT remains problematic.
On December 1, Ali Akbar Karimi, deputy chairman of the Economic Commission of the Parliament, told the state TV that free zones in Iran are now rather a place to import foreign products rather than to make and export home-made products.
This is while, according to Karimi, the reason behind the creation of free zones was to encourage production by giving tax discounts and legal exemptions to production and exports.
The operation of free zones in the country is also problematic in terms of smuggled goods. Hossein Shahroudi, secretary of the Economic Commission, recently said free zones are responsible for the smuggling of worth $40 billion goods into Iran.