News ID: 153433
Published: 0629 GMT June 18, 2016

Turkish official: Iran will integrate into global economy via Turkey

Turkish official: Iran will integrate into global economy via Turkey

Iran's integration into the global economy, particularly Western markets, will be realized through Turkey, said the chairman of Foreign Economic Relations Board of Turkey Ömer Cihad Vardan said that the country will be the most important player in this process unless a great geopolitical risk emerges, which could potentially affect trade and investments.

He added that Turkish companies have the capacity to turn Iran's business potential into lucrative investments; particularly in sectors such as retail, construction and tourism through trade, investments and services, Daily Sabah reported.

He said as a country that has shown such a presence in Iran following the removal of sanctions, Turkey's exports to neighboring Iran will (considerably) increase and will further approach the target of $30 billion in exports in a short time in the new period thanks to the old business relations and geographical proximity of the two countries.

Underlining that Iran certainly needs support to attain success in economic growth and the transfer of technology, Vardan said the need for nearly $250 billion in foreign investment comes with many business opportunities.

The Foreign Economic Relations Board (DEİK), he said, is ready to provide all kinds of supports for companies to seize new business opportunities and manage risks.

Vardan said that DEİK has four main priorities in the Iranian market, adding that these are the modernization of the existing customs and logistical infrastructure, the expansion of Turkish-Iranian preferential trade agreements and their conversion into free trade agreements, the normalization of bilateral banking relations and the expansion of Export and Credit Bank of Turkey's (Eximbank) credit lines, and the management of political, administrative and regulatory risks in the Iranian market.

"We do not want to re-experience bad experiences of the past in the Iranian market," Vardan noted.

In order to reach these objectives, DEİK will attach priority to four issues by encouraging investments in the Iranian market, strengthening relations between companies and international finance institutions, establishing mechanisms to ensure cooperation between Turkish and European companies that eye business opportunities in Iran and strengthening both Turkish and Iranian public authorities in order to manage risks that Turkish companies might face.

DEİK will lend impetus to the organization of trade and investment delegations that are aimed at Iran's major economic center in the sectors where Turkish companies will be competitors in the upcoming period.

Vardan said the normalization of ties with neighboring Iran will bring Turkey much closer to its medium and long-term growth and export targets.

 

 

Exports to Iran

 

Stressing that Iran was a sheer target country for exporters, Turkish Exporters' Assembly (TİM) President Mehmet Büyükekşi said: "We increased our exports to Iran by 25 percent with the lifting of sanctions as of January.

"In addition, according to the results of our Exporter Tendency Survey, Iran comes second after US on our exporters' target country list. Indicating that relations with Iran would not be only limited to foreign trade and Iran was a big potential in terms of making joint investments."

Büyükekşi pointed out that Iran has the world's largest natural gas reserves, fourth-largest oil reserves and the Middle East's largest automotive industry as well as being a net exporter in electricity exporter with an upward trend.

Turkey's exports to Iran are predicted to increase 13.7 percent within the next five years in the best-case scenario for the future. Correspondingly, Turkey's exports to Iran are estimated to reach up to $5.1 billion by 2020.

The growth in the metal and transportation sectors, on the other hand, is expected to maintain a level above the average export growth from Turkey to Iran.

   
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