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Iran: Foreign investments in industry exceeds $5 billion in third development plan

Tehran, June 26, IRNA-Iran's Industry and mining sector drew five billion of foreign investments during the Third Five-Year Development Plan (March 2000-2005), a report by Industry and Mines Ministry said today.

Of the sum about dlrs 3.3 billion was approved in 136 projects between the period 1378-1382 (March 1999-2002) of which 90 are in operations, the report added.

Also, it said that in the last Iranian year of 1383 (ended March 20) 36 joint projects with a dlrs 1.522 billion were approved in the country.

Drawing from the Foreign Exchange Reserve Fund, which has been established to assist private sector investments, was instrumental in implementing large-scale steel, cement and vehicle manufacturing projects by the private investors, the report stated.

Another measure taken by the government to facilitate foreign investments is decentralization in decision making, liberalization of pertinent laws, lowering imports tariffs and cutting down the excessive bureaucracy, it said.

Germany, Japan, Italy, Turkey, India, Pakistan, Spain, Canada, the Netherlands, Britain, Saudi Arabia and Slovenia are among counties which are participating in projects with Iranian investors.

Some of the projects include production of chemicals, software, paint, steel ingots, paper, and furniture covers.

The report added that foreign investors' share ranges form 20-100 percent of the total value of initial investments. The projects are spread throughout the country.

The Industry and Mining sector has drawn over 76 percent of the total foreign capital invested between the 1372 (started March 21, 1993) up to the February 2005.

The sector with the number of projects approved (147) ranks first in terms of total foreign investments carried out in the country (192) in the said period.

The value of projects stood at dlrs 3,741.899 million of the total foreign investments of dlrs 9,280.491 million in the period.

Following the industry and mining sector, the service sector with dlrs 2,352.625 ranks second in terms of project value.

Transportation and communication sector ranks third with dlrs 2,074.738 million of foreign investments followed by water, electricity and gas, construction, and agriculture, the report said.

An Industry and Mines Ministry official said in November that the share of the industry and mines sector in the last Iranian year (ended March 19) in the gross domestic product (GDP) stood at rls 379,006 billion -- at constant prices for the Iranian year 1376 which ended on March 20, 1998.

Deputy Minister of Industry and Mines for administration and finance affairs Alireza Sepahvand told reporters that the figure was 6.1 percent higher compared to the figure in the previous year.

He said the sector's share in the GDP stood at 17.5 percent last year "which is also four percent higher compared to the figure for the year before." Sepahvand said the sector also generated a value added of rls 66,148 billion in the economy last year which was 11 percent higher than the year before.

The growth of the industry value-added has exceeded the targets envisioned the Third Five-Year Development Plan (March 2000-2005) while mining activity value-added capped an impressive 15.4 percent in the same period, he added.

The reform of foreign investments law in the country has led to 100 percent growth in the number of approved foreign investments projects in the recent years.

The latest official figures point to improving trend in growth of foreign investments inflows.

According to official figures investments inflows to the country have registered an exponential trend.

Over 192 projects have been approved, so far, in the country of which 50 have been ratified since the Iranian year of 1380 (Started March 21, 2001) when the law was initially reformed.

Of dlrs nine billion worth of investments approved since the Iranian year of 1372 (Started March 21, 1993), a significant chunk - dlrs seven billion - has been ratified since 1381.

A problem of drawing foreign investments to the country is lack of knowledge on the part of officials on the instruments in the field of economy and finance. Offering related knowledge through holding, training courses and seminars are needed to rectify the shortcomings.

Foreign investments centers have been set up throughout 30 provinces. The investments have been deemed economical by carrying out thorough feasibility studies and incorporating the comparative advantage of Iranian economy in various areas including vehicle manufacturing, hotel building and production of chemicals and spare-parts.

... Payvand News - 6/26/05 ... --

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