Yazd, Feb 23, IRNA -- Advisor for Organization for Investments, Economic and Technical Assistance of Iran (OIETI) Mehdi Dalvand said on Sunday that Iran should take a closer look at benefits of foreign investments "other than its employment dimension."
Speaking at the provincial planning and development commission, he said ratification of the foreign investment law in the sixth Majlis has heralded a better propspect for the subject.
Dalvand referred to guarantee of investments, repatriation of initial capital, hard currency transfer or goods in lieu of profits and repatriation in case of nationalization as positive provisions of the law.
He touched on the first foreign investment law passed in Iran 1993-94 adding "many of vague and outdated articles have been redrafted by the MPs."
Iran is just in the beginning of the path to attract foreign investments. Capital security, a conducive atmosphere and smaller bureaucracy are all precursors for higher foreign investments, he noted.
Another speaker Reza Sayed Aqazadeh said although Iran is a rich country, the economy has not been able to generate satisfactory national income.
"The reason are not lack of financial resources, but weak management and technical ability," he remarked.
Many experts which view ample and affordable manpower as an relative advantage for the country, he said, adding, "but publicizing such perceived advantage could have the unintended effect of being looked at by foreign investors as inadequate skilled work force."
He also put the total foreign capital investments in Iran as standing at dlrs billion 4.37 since fiscal year 1993-94. He said an unfavorable trend was prevalent in attracting foreign investments prior to the period.
In a reference to investments before the victory of Islamic revolution, he said over 113 projects had been approved predominately from Germany, Britain and Japan prior to 1979.
Iran needs foreign investments not only for its financial gains which could also realized through obtaining loans. But, loans have repercussions by themselves, he stated.
From 150 investment projects ratified so far, "31 have been in the current Iranian year (started March 21)."
He expressed hope that with positive signs brewing in the economy, laws will be much more favorable to foreign investment policies next year.
He also called on the provinces to identify and introduce their capabilities aiming to attract Iranian expatriates to invest in those areas.
In a bid to promote foreign investments, Head of Evaluation affairs at OIETI Ahmad Jamali said in February that the period for issuing permits for foreign investments projects in Iran is at most 45 days.
Speaking at a provincial administrative meeting, he highlighted the importance of laying the ground work to attract foreign investments to the country.
Having trade relations, ideas, finding a suitable partner, participation in trade exhibition and fairs and connection with the embassies are steps for attracting foreign investments, he underlined.
Over 70 percent of foreign investments in the country in past decade has initially begun by courting trade ties with other countries, and followed by production ventures, he said.
Jamali said in the period 1975-1978, over 265 cases of foreign investments were initiated through OIETI support and promotion.
He said investments were banned until 1992 and resumed after the ratification of the Free Trade Zones Act. "Over 31 foreign investment projects have been approved and initiated since then," Jamali remarked.
He further said that the objective of the organization is to act as an organ linking domestic and foreign investors.
Head of OIETI Mohammad Khazaie said in Decemer since the approval of the law on attraction of foreign investment in Iran, a remarkable boost has been observed over the first half of current Iranian year (started March 21).
Khazaie told IRNA, "Over dlrs 300 million worth of foreign investment has been approved by the Foreign Investment Organization within the framework of 17 projects over the past six months, mainly consisting of textile, vehicle spare parts, building materials, oil well equipment, floor mats, etc."
Referring to the boost in the number of projects involving foreign investment which during the recent months equalled to those approved over the past 10 years, he said that in average about 15 applicants seek advice at the foreign investment consulting center every day.
According to the official, the applications currently under assessment concern investment in power station, production of foodstuffs, vehicle spare parts and petrochemical plant from Germany, France, Turkey, India, Spain, Saudi Arabia, Canada, etc.
"Some steps have been taken towards informing the private sector of joint investment with foreign countries, direct overseas investment and using international financial and technical facilities," he added.
He pointed to economic reforms such as transparency of laws, reduction of tax rates on foreign investment and unification of hard currency rate as the preliminary measures aiming at encouraging foreign investors and the ratification of the related law was the last phase of its legal framework.
He added that the volume of the investments, except that of oil and gas sectors, has so far amounted to dlrs 4.5 billion, out of which dlrs 2.7 billion has already been invested.
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