i.r. of iran and portugal · med & high-tech exports share in ... agreement establishing...
TRANSCRIPT
(ITSR)
I.R. of Iran and Portugal:
Improving Ties to
Boost Mutual Cooperation
Mohammad R. Razavi (PhD) Institute for Trade Studies & Research
Ministry of Industry, Mine and Trade
Table of Contents:
1- Iran and Portugal: Economic Comparisons
2- Trade Relations between Iran & Portugal
3- Measures to Promote Trade Relations
4- Potentials to Enhance Mutual Cooperation
5- Concluding Remarks
Attachments
1-Iran and Portugal: Economic Comparisons
1-1. Macroeconomic Indicators
1-2. Market Indicators
1-3. Competitive Industrial
Performance
1-4. International Trade
1- Iran and Portugal: Economic Comparisons
1-1. Macroeconomic Indicators (2014)
Source: World Bank
Portugal Iran
230.1 425 GDP (US$ billion)
272 1290 GDP, PPP (constant 2011 US$ billion)
22132 5443 GDP per capita (US $)
26184 16507 GDP per capita, PPP (constant 2011 $)
0.37 0.68 Share of world GDP (%)
52 18 GDP Global Position (Rank out of 144)
-0.3 15.5 Inflation rate (%)
14.2 12.8 Unemployment, total (% of total labor force)
10.4 78.1 Population (million)
Highlights: Iran’s market Potential is High and Portugal’s
higher GDP means a more Productive Capability .
Complementary Characteristics.
2014 2015 2016 2017
Potgl* Ir** Potgl Iran Portgl Irn Potgl Ir
GDP growth
(%) 0.9 4.3 1.5 0.8 1.6 4.3 1.8 4
Inflation(% ) -0.2 15.5 0.5 15 0.7 11.5 1.1 8.3
Unemplt (%) 14.1 10.6 12.6 11.7 11.7 12.2 10.8 12.3
Economic Outlook for Iran & Portugal
*Eur Com, European Economic Forecast, 2016 **World Economic Outlook
European Commission predictions for Portugal:
“Gradual Recovery, slow growth and lower unempl.
IMF predictions for Iran:
“Significant improvement in growth, lower inflation (due
to contractionary monetary and fiscal policies)”.
1-Iran and Portugal: Economic Comparisons
1-1. Macroeconomic Indicators (2014)
1-Iran and Portugal: Economy Comparison
1-2. Market Indicators: (Rank out of 140)
Source: World Economic Forum (Global Competitiveness Report, 2015-2016)
Portugal Iran
(51) (18) Domestic Market Size
(53) (28) Foreign Market Size
(35) (75) Extent of Market Dominance
(61) (81) Control of International
Distribution
(35) (112) Value Chain Breadth
$130.2 (135) $12.2-- (9) Government Debt, % GDP
Room for work of Strong Companies in Iran,
Very Low Risk of Participation in Financing of
Projects, and in Expanding Value Chains of
Products that Satisfy Mutual Interest.
1-Iran and Portugal: Economy Comparison
1-3. Competitive Industrial Performance
Portugal Iran
2280.2 324.9 Manufacturing Value (MVA) Added per
capita (2005$, 2013)
26.4 43.9 Med- and Hi-Tech MVA Share in Total
Manufacturing (percent)
37.8 31.7 Med & High-Tech Exports Share in
Total Manufactured Exports (percent)
Upper Middle
quintile
Middle
quintile State of Industrial Competitiveness
Source: UNIDO, Industrial Development Report, 2016 (statistics for 2013)
Considerable potential for industrial cooperation
and mutual investment .
1-Iran and Portugal: Economy Comparison 1-4. International Trade Comparisons, 2014
Portugal Iran
Merchandise Exports (US$ bn) 63.9 88.8 Share of world (%) 0.34 0.47 Export per capita (US$) 6162 1126 No. Of Partners 207 150 Merchandise Imports (US$ bn) 78.2 51
Share of world (%) 0.41 0.27
Import per capita (US$) 7550 647
No. of Partners 177 129
Despite her relatively smaller per capita income and
import, Iran can be a desirable market for Portuguese
products - particularly intermediate and capital goods – as
a result of its significant absolute value of imports.
1-Iran and Portugal: Economy Comparison
1-4. Iran’s Major Diversification Effort
China 23%
UAE 22%
Republic of Korea
8%
India 8%
Turkey 7%
Others 32%
Iran’s Main Import Partners
China 39%
India 16% Turkey
14%
Japan 8%
Iraq 8%
Others 15%
Iran’s Main Export Partners
Sanctions Highly Concentrated Import
and Export Markets in 2015
2-Iran and Portugal: Trade Relationship
2-1. Bilateral Trade between Iran and
Portugal (2004-2015)
2-2. The Impact of Sanctions on Iran –
Portugal trade profile
Source: http://www.irica.gov.ir
2-Iran and Portugal: Trade Relations
2-1. Bilateral Trade between Iran and Portugal (2004-2015)
80 % drop in overall Trade from $70 mil in 2009 - Huge Drop
in Portuguese Exports to Iran - Large Fluctuation of Iran
Exp to Potgl Mainly due to Sanctions, also other Factors.
1.37.8 13.3
4.8 6.8 11.05.1
20.7
42.3
9.321.1 24.6 21.9 18.7
32.1
55.064.5
12.5 10.35.2
-80.0
-60.0
-40.0
-20.0
0.0
20.0
40.0
60.0
80.0
2003 2004 2005 2006 2007 2008 2009 2010 2013 2014
Export Import Trade Blance Trade
US
$m
il
2-Iran and Portugal: Trade Relations
2-2. Impact of Sanctions on Iran – Portuguese Imports
Iron
and
steel,
88.29
Salt;
sulph
u 6.44
2008 2014
Iron steel, 98.31
other, 1.69
Practically, Iran exports only Iron and Steel, no
other product despite the fact that the World
imports a number of other products like Petrochem,
|Chemicals, and ……. From Iran
2-Iran and Portugal: Trade Relations
2-2.The Impact of Sanctions on trade profile
2008 2014
Iran’s Main Import form Portugal(%)
Wood
26%
Elec
mach 20%
Vehicl,
Parts
13%
paper
12.41
iron
steel, 6
iron&
steel,
22%
boilers
mach
18%
Pulp, wood
16
Elec
mach, 6%
Pharm
5%
Effect of sanctions: Considerable change in
the composition of import, Lower share of
manufactured goods. $55 Mil. fell to $5 Mil.
3- Activities for the Promotion of Iran-Portugal
Economic and Trade Relations
Exchange of trade delegations between Iran and Portugal in the last 10 years
6 times Iranian delegations having visited Portugal
4 times Portuguese delegations having visited Iran
upto 2010
Once (2015)
Aside from
Pedro Del !
Portuguese delegations having visited Iran
since 2011
98 Int’l Deleg. From Visiting Iran in 2015
3- Measures to Promote Iran-Portugal Economic
and Trade Relations
Memorandums of Understanding and Protocols of Cooperation between Iran and Portugal
2000 Agreement & Protocol of Coop between Chambers of Commerce
2003 MoU for Eco Coop between Trade Promotion Org of Iran and
Trade and Tourism Institute of Portugal
2003 MoU for coop in the field of housing and urban development
2005 Agreement establishing Commercial Council of Iran and Portugal
2005 Protocol of Cooperation between association of female company
owners of Portugal and female business owners of Iran
2015 MoU for Coop between Ministry of Agriculture of Iran -- Ministry
of Food Affairs, Agricultural and Maritime Research of Portugal
4- Potentials to Enhance Mutual Cooperation
4-1. Industrial Development Goals in Iran
4-2. Investment Opportunities in Iran: A strategic country
4-3. Market Potentials and Proximity
4-4. Low Utility and Production Costs
4-5. Different Tax Holidays
4-6. Legal Protection through New Investment Legislation (FIPPA)
4-7. International Legal Infrastructure, Affiliations and Relations
4- Potentials to Enhance Mutual Cooperation
4-1. Industrial Development Goals in Iran
Targeted Industries: Petrochemicals, basic metals,
Auto, Mineral Products, Chemicals, food, Med Devices
Recently Formuated Goals and Objectives in Iranian Industrial
Development Plan Emphasizes International Cooperation
4- Potentials to Enhance Mutual Cooperation (cont.)
4-2. Investment Opportunities in Iran: Strategic Position
Iran enjoys a unique location at cross-road of ME, Asia & EU,
with many regional trade, customs, tax & invest. arrangements.
4- Potentials to Enhance Mutual Cooperation (cont.)
4-3. Market Potentials and Proximity
Trading with Iran means a Large domestic market of
79 million people, And easy access to neighboring
markets with app. 420 million inhabitants.
Iran borders Afghan, Armenia, Azerbaijan, Iraq, Pakistan, Turkmen and
Turkey by land and UAE, Bahrain, Kuwait, Oman, Qatar and Saudi by sea.
4- Potentials to Enhance Mutual Cooperation (cont.)
4-4. Low Utility and Production Costs
► Second Gas Reserves in the World After Russia
Developed in spite of Sanctions
► Very Low Prices on Heating Gas and Electricity
also Very Low Prices on Ethane-Based Crackers
►Close to Global Bench-Mark Prices on Ethylene,
Thus very low cost feed for Petrochem & Polymers
Iran Plans to attract $50B Investment in these Ind.
► Availability of Large Pool of HR Particularly in
Engineering: 1.7 Mil. Univ Students (37% of Total
Students) in Engineering and industrial-related areas,
mind you: 60% female
Foreign Investment Promotion
and Protection Act (FIPPA)
provides legal protection to
foreign investments (based on
transparency and internationl
standards) as well as
4- Potentials to Enhance Mutual Cooperation
4-5. Legal Protection thru FIPPA Legislation
4- Potentials to Enhance Mutual Cooperation (cont.)
4-6. Attractive Tax Holidays
Investors in Iran Pay a Flat Fixed 25% Tax Rate On Income But
There are Many Tax Holidays:
Another Tax Reduction for JVs (with foreign parties)
That Export At Least 30% of Production.
4- Potentials to Enhance Mutual Cooperation (cont.)
4-7. Internatl Legal Infrastructure, Affiliations & Relations
5- Concluding Remarks (Key Areas)
Iran, keen to enlarge mutual Economic Coop.
with Portugal & Europe in many sectors:
Petrochemicals, Plastics and Chemicals
(Port Facilities, Sea Trans.,**Molding,..)
Home Related (Hi Household formation in
the Region: Home Appliances, Const.
Material, Auxiliaries, Furniture,
Iran-Portugal Cooperation: A Bridge Linking Many
Markets in Europe, Middle East and Africa.
5- Concluding Remarks
Support by Gov’t. and a Vibrant Private
Sector. Ex: Expansive Energy Saving Programs
By The Oil Ministry: Huge Potential for the Cork Ind, & other energy saving tech. in the Region
Electrical Machinery (Elecromotors, etc.)
Hi-tech, Esp. ICT, Med Devices and Biotech
Food Ind. & Fruit Preservation &Transport
Iran-Portugal Cooperation: A Bridge Linking
Many Markets in Europe, Middle East and Africa.
Iran-Portugal Cooperation In Third
Markets:
Long-term Sanctions Self Sufficiency
Capacity and Tech. to Produce Key Basic Goods
and Services that Can Be Used by Angola or
Mozambique:
• i.e. Power Stations &Grid, Dams,
Irrigation Tech., Gasoline, Med Devices
(war) and Services, and many more.
• Taking African nations Oil and Mining
Industries to a higher level of Value-Added.
5- Concluding Remarks (cont.)
Iran-Portugal Cooperation In Third
Markets:
Also Iran is Looking Beyond Boots and
Guns in the Region: Iraq, Syria, Afghanistan,
Turkmenistan, Yemen, Pakistan , etc
To Initiate Programs that will Generate
Regional Channels and Mechanisms for
Promoting Cooperation.
Looking for Partners, Ideas, Old Hands in
Europe where major Effort were Undertaken
5- Concluding Remarks (cont.)
4- Potentials to Enhance Mutual Cooperation (cont.)
4-4. Low Utility and Production Costs
Source: Organization for Investment, Economic and Technical Assistance of Iran
Diversified range of energy, telecommunication, transportation, as well as developed
public utilities in Iran means Low Utility and Production Costs.
1-Iran and Portugal: Economy Comparison
1-4. International Trade
Export Potentials (2014)
A review of export capacities and
import needs of both countries
shows that:
There is a potential to increase
the volume of bilateral trade to
18 Billion Dollars.
17,3
16,6
4,6 4,3
4,2
Mineral oilsand products
Plastics andarticlesthereof
Dairyproduce
Iron andsteel
Articles ofiron or steel
19.9
12.7
8.6 7.9
7.1
mach& andmech
appliances
Vehicles andparts
Pharmaceutical products
Elec &mach andequipment
Plastics andarticlesthereof
Iran to Portugal
Portugal to Iran