Ratification of Law Not Enough, More Infrastructure Needed for Foreign Investment
July 6, 1999 - 0:0
TEHRAN The Free Trade Zones will not be able to invite and attract foreign investments only through application of a the recent law which allows the establishment of foreign banks, Bahman Arman said To invite foreign investments into the zones, he added, requires other infrastructure activities including building large ports, transmission lines, power plants, etc," Arman an economist told the TEHRAN TIMES. He was referring to the recent law which guarantees foreign investments in the FTZs and allows foreign banks to invest in the FTZs having 100 shares.
Those in charge of such zones have realized that it was not enough only to name a zone as a Free Trade Zone' and invite foreign investments to such zones, he added. He said, Energy in Iran is available at a very low rate, wages of workers are low, and there are specialized workforce in our country, which are the advantages Iran enjoys.
However, if the foreign companies are to invest here, they should not be demanded the price of gas, for instance, as a source of energy, according to international market value because they might then invest their money in another place like Dubai.'' Our traditional banking management is inefficient and slow and with the advent of foreign banking system, our banking technology will also improve.'' "The foreign investors believe that there are legal obstacles hindering them from investing in the FTZs which is contradictory to what the domestic officials claim in this regard," another economist and university professor Farshad Mo'meni said.
The viewpoints of the approved law is an absolute technical viewpoint toward a completely complicated issue with economic, social, and political perspectives, he added. As one of the drawbacks of the new law, Mo'meni said it might be used as a means for outflow of capital from the country. With the approval of such a law, the internal capital will flow out rather instead of attracting the foreign capital,'' he said.
Overall, the volume of foreign investments is more extensive in the neighboring countries than ours due to the insecurities in the Free Trade Zones,'' he concluded. Jamshid Pajuyan, another economist, said, We should not expect the inflow of the foreign capital to the Free Trade Zones immediately following the ratification of recent laws. But this can act as a prelude for further exchanges in the currency market.'' Setting prices by the banks in the Free Trade Zones will be a challenge to our Central Bank that sets and controls prices,'' he added.
Pajuyan said he believed the prospects of foreign investment in FTZs depended on the output and that there was a definite need for security of the capitals.
Those in charge of such zones have realized that it was not enough only to name a zone as a Free Trade Zone' and invite foreign investments to such zones, he added. He said, Energy in Iran is available at a very low rate, wages of workers are low, and there are specialized workforce in our country, which are the advantages Iran enjoys.
However, if the foreign companies are to invest here, they should not be demanded the price of gas, for instance, as a source of energy, according to international market value because they might then invest their money in another place like Dubai.'' Our traditional banking management is inefficient and slow and with the advent of foreign banking system, our banking technology will also improve.'' "The foreign investors believe that there are legal obstacles hindering them from investing in the FTZs which is contradictory to what the domestic officials claim in this regard," another economist and university professor Farshad Mo'meni said.
The viewpoints of the approved law is an absolute technical viewpoint toward a completely complicated issue with economic, social, and political perspectives, he added. As one of the drawbacks of the new law, Mo'meni said it might be used as a means for outflow of capital from the country. With the approval of such a law, the internal capital will flow out rather instead of attracting the foreign capital,'' he said.
Overall, the volume of foreign investments is more extensive in the neighboring countries than ours due to the insecurities in the Free Trade Zones,'' he concluded. Jamshid Pajuyan, another economist, said, We should not expect the inflow of the foreign capital to the Free Trade Zones immediately following the ratification of recent laws. But this can act as a prelude for further exchanges in the currency market.'' Setting prices by the banks in the Free Trade Zones will be a challenge to our Central Bank that sets and controls prices,'' he added.
Pajuyan said he believed the prospects of foreign investment in FTZs depended on the output and that there was a definite need for security of the capitals.