Entrepreneurs Targeting Iran Gathered in Istanbul
Hosted by DEİK and Deloitte Turkey on April 19 in Istanbul, Seminar on Doing Business in Iran, was attended by DEİK/Turkey-Iran Business Council President Bilgin Aygül, Iran Chamber of Commerce, Industries, Mines and Agriculture President Ferial Mostofi, Deloitte Turkey's CEO Humphry Hatton, Deloitte Middle East Representative Nick Beer, Deloitte Turkey's Chief Legal Counsel Lerzan Nalbantoğlu.
DEİK/Turkey-Iran Business Council President Bilgin Aygül stated that Iran has become a center of attention following the lift off embargos. Iran has western industry and refinery infrastructure; being the neighbor of Iran creates a great advantage to Turkey. He highlighted that Iran has a young population of 80 million. Turkey holds a Preferential Trade Agreement with Iran and despite trade decline since 2013, growth has been recaptured in 2016. Both countries' logistics infrastructure is very significant to their export. Furthermore, despite decline in number of tourists in Turkey, number of Iranian tourists has not declined.
Iran Chamber of Commerce, Industries, Mines and Agriculture President Ferial Mostofi emphasized that Turkish-Iranian friendship is historical and both cultures have many cultural similarities. With the lift of sanctions, Iran attained a great opportunity to integrate with the gloval economy. Iran holds world's largest natural gas reserve and fourth largest oil reserve therefore, mining sector based on iron, zinc, copper and lead has become prominent. Iranian economy is less dependent to oil and natural gas versus other economies in MENA region, Iran want to strengthen other sectors comprising of communication technologies, maritime, aviation, space and agriculture with the use of modern technology. Iran economy's performance is still under its potential, with the lift of sanctions Iran will catch up with the globalization to compensate missed opportunities. Economic and social reforms are in the favor of investors, even though, Tehran is 1.000 miles away from the Silicon Valley Iranian entrepreneurs developed themselves. Mostofi also stated that a Foreign Investment Service Center has been established in order to develop trade and economic relations, to increase investment in Iran and number of Free Trade Regions.
Deloitte Turkey's CEO Humphry Hatton stated that they are interested in the opportunities in Iran and that Iran is developing every day. Dubai office will be the reference point since primary sanctions are still in effect. Many companies that are willing to invest in Iran will use Istanbul as the center; Iran is world's largest 18th economy following Turkey. Inflation in Iran has been higher than the west, yet recently the inflation has declined to single digits from double digits. Literacy rate is very high in Iran, and education is very important and incentivized by the government. USA's primary sanctions are still in effect, thus, many investors are reluctant due to sanctions in the banking sector. Iran is an attractive market because it has low energy prices and low labor cost, nevertheless, it grants access to a Middle East and Central Asia Market with the value of 300 million USD dollar.
Turkey-Iran Trade Figures (Ministry of Economy-2016)
Turkey's export to Iran: 4.9 billion USD Dollar
Main export items: Jewelry, fiber board, metal, tobacco and cigarettes
Turkey's import from Iran: 4.7 billion USD Dollar
Main import items: Petroleum, fuel and oil, plastics and raw materials, copper and copper articles, fertilizers, organic compounds
Trade Volume: 9.6 billion USD Dollar
Trade Balance: 269 million USD Dollar