Iran private sector urges joint investment, more banking relations to boost Iraq trade

The entity that represents Iran private sector proposes joint investment projects in Iraq and opening branches of Iranian banks across the Arab country as well as border areas to facilitate trade between the two nations.

17 January 2019
ID : 1775
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Iranian private sector says joint investment projects between Tehran and Baghdad will consolidate bilateral economic relations and enhance trade ties. 

“I believe businessmen from both countries need to look at joint investment besides trading commodities,” said Mohammad Reza Karbasi, Iran Chamber of Commerce, Industries, Mines and Agriculture (ICCIMA) deputy in international affairs, addressing a joint business forum between Iran and central and southern Iraqi provinces that was held in Karbala.

“This joint investment guarantees long-standing economic relations [between Iraq and Iran],” added Karbasi who is heading a large private sector businessmen in a five-day working trip to the Arab country accompanying Iranian Foreign Minister, Mohammad Javad Zarif.

He proposed that private sector businessmen from both countries invest in projects such as producing pharmaceuticals, construction materials, packaged foodstuff, home appliances as well as exploiting raw materials.

Kalleh Dairy, one of Iran’s leading dairy producers has factories in the Iraqi cities of Karbala and Najaf. Kalleh exported 600 tonnes of dairy products per day to Iran’s neighbours, producing $205m revenue in the Iranian year 2014-15, according to The Guardian. “Kalleh’s production in Iraq is an example of such joint cooperation,” stressed the ICCIMA deputy in international affairs.

One of the current bottlenecks of Iranian exports is how to repatriate the money into the country as the renewd unilateral US sanctions have stifled nearly all dollar and euro-based financial channels. Tehran is hard at work to establish monetary mechanisms based on national currencies with its top clients such as Iraq, Russia, China and India among others.

Karbasi says one of the solutions to ease trade with Iraq is that Iranian banks open branches across the neighbouring country, especially in the areas with high economic activities, such as Karabala, Najaf and border areas.

The head of Iranian foreign diplomacy said that bilateral relations between Tehran and Baghdad can be doubled in case all the outstanding issues such as visa regimes or high tariffs on Iranian imports, are resolved. Iran-Iraq trade volume stands at some 8 billion dollars annually, according to Zarif who was also attending the joint Iran-Iraq business forum in Karbala. “Iran is ready to reduce the tariffs to zero,” emphasized the Iranian minister. He had reiterated Tehran’s readiness to abolish the import tariffs in previous meetings with Iraqi businessmen.

Iran FM, Zarif, (middle) addresse join Iran-Iraq business forum in Karbala, Wednesday 16 January (Photo: IRNA)

Iran is also exporting more than two billion dollars worth of oil and gas to Iraq that relies heavily on Iranian petrochemical products to keep its power plants running during the cold months.

“Iranian firms are ready to meet Iraq’s energy demands and increase its exports to the country should the two countries decide the US can’t put restraints on their bilateral relations,” said Zarif who was accompanied by Karbala Governor Aqil Al-Turaihi.

US Secretary of State, Mike Pompeo was in Iraq just a day before Zarif set foot in the country. He held talks with Baghdad to persuade it to cut its imports of Iranian oil and gas. Iraq has been granted a sanctions waiver to buy oil and gas from Iran.

The Iranian foreign minister stressed Iran’s readiness and capabilities to help rebuild the war-torn nation, saying more than 80 construction firms have taken up contracts worth up to 8 billion dollars. “They are among the most capable firms in the region,” he added.

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