Govt. should establish health protocol with neighbors to spur exports

Over three months into the pandemic, the world continues to wrestle with the notorious COVID-19 and many economies have been hit hard as the virus is choking off world’s trade relations just like the people on hospital beds.

Like its neighbors, Iran is also grappling with both the social and economic aspects of the pandemic as production is mostly halted, export revenues have fallen significantly and people are also urged to stay in home quarantine.

However, unlike most of its neighbors, the situation for the Islamic Republic is unique in the sense that the country is also facing the economic pressures imposed by the US sanctions and the country’s oil revenues have also been severely affected by the Washington hostility, so any disruption in the country’s non-oil exports to its neighbors would impose a much greater burden on Iran’s economy compared to other developing nations in the region.

In this regard, the Tehran Times conducted an interview with the Energy Expert Hamidreza Salehi, who is the Head of Iran Chamber of Commerce, Industries, Mines and Agriculture (ICCIMA)’s Energy Committee, in which we discussed the issue.

What follows is a summary of this interview.

Moving toward a non-oil economy

Asked about the economic impacts of the coronavirus outbreak in the country, Salehi noted that currently, the disruption in the non-oil exports to the neighbors could be pointed out as the most significant effect of the crisis along with the costs which the pandemic have imposed on the economy.

“In the energy sector, almost all of our trade activities including the exports of gasoline and technical and engineering services have severely been affected as a result of the spread of this deadly virus,” he said.

According to the official, since Iran has been taking serious steps toward a less-oil-reliant economy in the face of the US sanctions, and non-oil exports, especially the exports of petrochemical and oil products to the neighboring countries like Iraq, Turkey, and Afghanistan, have been playing a significant role in this process, the long-term disruption of trade with the neighbors could cause drastic issues for the country in the future.

Remedy to resume trade

Salehi, who is also the secretary-general of the Federation of Iranian Energy Export Industries (FIEEI), went on underlining the undeniable role of the government in managing the situations like this pandemic, noting that the government must take immediate action to support the country’s exporters while trying to reestablish the trade channels with the neighboring countries.

The government should support the private sector and non-oil exporters, as many of our neighbors like Turkey are doing so, not only in the current situation but in general, he stressed.

According to the official, to remedy the current situation the government needs to negotiate the establishment of a health-security protocol with the neighboring countries to ensure the safety of trade and to normalize the situation.

Under the current circumstances, establishing such a protocol could facilitate the country’s trade and business activities with the neighbors and this can also be generalized to other countries as well, he highlighted.

Salehi further emphasized that “this situation is not only for Iran, many production units in other countries and especially in our neighbors, need raw materials and their production has been halted so it is essential that all countries, which are grappling with this virus, to cooperate in setting up a taskforce for supporting the industry and economy sectors.”

By Ebrahim Fallahi

First Published in Tehran Times