Burning opportunities in Eurasian target markets

Burning opportunities in Eurasian target markets
  • 2021-03-01
  • .
The government's reluctance to take infrastructure measures and export protection requirements has burned opportunities in Eurasian target markets, especially Russia.

According to the International Iranian Stone Exhibition, the realization of export strategies in each country depends on the actions of both the public and private sectors. Based on scientific rules and existing facts and observations, the behavior of governments such as (China-Turkey-Azerbaijan) in the Russian target market, which is an important factor in the success of economic actors in these markets has grown.

 Without the necessary and infrastructural measures of the government, which are emphasized in the strategy of Article 10 of the resistance economy, in the current situation, exporters and producers practically miss the favorable and available opportunities in this large market due to poor management of the Trade Development Organization. Business, employment in the country will face many harms and we will see social anomalies. Of course, we should especially thank all the efforts of the Embassy of the Islamic Republic of Iran in Moscow and the Consulates General of Iran in Astrakhan and Kazan, Russia and Kazakhstan, but unfortunately due to lack of logistics infrastructure and the like failed below and still the expected goals. We have a long way to go

*Opportunities;

In this section, I do not intend to talk about the opportunities of the Eurasian and Russian markets at all, because during the two years, economic activists in the conferences and showrooms organized by the Trade Development Organization and other government organizations in the country from the opportunities available in these markets. Are informed. If we search a little, thousands of pages of articles, publications and lectures have been written during these two years, to listen to the reports and lectures and analyzes and statistics of all kinds and hundreds of thousands and maybe millions of hours, listeners and enthusiasts of economic activists They gave their eyes and time to the Trade Development Organization and other organizers of these conferences.

We have to admit that billions of tomans have been spent to hold these conferences, which if the same amount of financial credit was spent on creating the necessary infrastructure, could certainly create significant added value for the country.

But as an economic activist, I must acknowledge and emphasize that the market opportunities of neighboring countries are an undeniable fact, and the opportunities of the Russian market and the importance of developing trade relations and especially determining the operational strategy of trade development with Russia can be the most important accelerator in developing export performance. Economic ties with other neighboring countries.

We have to believe that the Eurasian Preferential Tariff Agreement, despite its drawbacks, was one of the best things that happened in the life of the current government, and if it were not for the management of the Trade Development Organization, it could become one of the most important tools for export development. Also have. On the other hand, I must say that it is true that the officials are happy with the statistical increase in exports to Eurasia and Russia, but after the customs declaration of export goods at the customs exit points, they do not know the fate of goods in the target market.

They do not know what great challenges traders face and how and with what misfortunes they settle their foreign exchange obligations due to the losses caused by the negligence of the public sector. They do not know that the trade of Iranian fruits and vegetables in this market is aimed at capturing the hands of Azeri traders as well as our country's nuts in the hands of Tajiks and Uzbeks, and instead of returning its added value to the country's economic cycle, it goes to Azeri and Tajik traders. Uzbek will be shed.

 Therefore, I intend to draw your attention more to the challenges in developing export performance to Russia and Eurasia and its solutions;

Challenges; Basically, I will briefly explain the challenges in developing the performance of exports to Eurasia and Russia in the following four sections:

Weak management in the Trade Development Organization: In our country, the main and most important role of the Trade Development Organization is to study its challenges and solutions, interaction and cooperation and support the private sector and activists in this field, which unfortunately due to poor management, so far Has not been able to play a key role in this area and perform its duties. Here are some of them:

Poor negotiation before and after the Eurasian Preferential Tariff Agreement and minimum concessions.

The organization's inability and poor management in advancing free trade talks with Russia and Eurasia has caused great concern for economic actors.

Absence of business advisor or appointment of business advisor Lack of familiarity with the behavior of competitors and customers and regulations in the target market - Lack of knowledge of market opportunities in other provinces and concentration in Moscow - Lack of communication with capable economic units in the field of import and export Objective - Inability to establish relations with government organizations and effective factors in solving problems and removing obstacles in the target country

Weak logistics infrastructure in land, rail and sea:

Roads: Approximately 74 Iranian exports to Russia are agricultural, horticultural, protein and food products, which should be transported mainly by refrigerated trucks to the target market. Horticultural and summer products, while having a short shelf life, in case of the slightest temperature change during transportation, goods and export products will be severely damaged and the exporter will suffer losses and as a result will be able to return the capital and its added value. They will not enter the economic cycle of the country.

Rail: One of the main reasons for the failure of the strong presence of Iranian products and goods in the Caspian Sea, especially Russia, is the weakness in the complementary rail infrastructure and the high cost of logistics and transportation, despite the very good cooperation of the country's ports and railway readiness of the Islamic Republic of Iran. Unfortunately, due to the lack of completion of the Rasht-Caspian port line - the lack of a bogie change system in Amirabad port - the lack of a ferry - the wagon is practically a large part of the national capital in the railway infrastructure is facing the least efficiency.

It should be noted: From the port of Azerbaijan to the port of Aktau, there are two ships that transport Turkish wagons to Central Asian countries - Kazakhstan and then to China and Afghanistan without any logistical obstacles. . This is where we, the Iranian economic activists, have to see such diligence and prudence in the face of such a scene from a small country like Azerbaijan, and some tears flow from our eyes because of our merit and recklessness. Who really is the answer to these recklessness in Iran?

Maritime: Lack of special containers for refrigerated containers - Shortage of surface-to-surface vessels (currently only two surface-to-surface vessels are operating on the route Iran-Kazakhstan and Russia) These vessels, despite having a carrying capacity of 35 to 40 trucks in length 17 meters, unfortunately, has a limit of up to 19 passengers (of course, this limit can be solved and managed) - Expensive shipping costs for export goods in the Caspian Sea is another important factor in the cost of goods - poor electricity supply Need for refrigerated containers in existing ships of the Caspian Sea (each ship can only supply electricity to 3 to 4 refrigerated containers in the direction of the Caspian shipping capacity is more dependent on the shipping of the Islamic Republic of Iran) and Caspian shipping that is dependent on shipping of the Islamic Republic of Iran It should be done to supply the ships from now on so that we do not have to wait for the ships after the completion of the railway route.

Lack of organizational management and cohesion and planning of presence in the target market:

Russia has 84 federal provinces, some of which play a role in terms of geopolitical position - population - stronger economy - the existence of logistics infrastructure as central provinces in the field of supply for the surrounding provinces, which are usually in the vicinity or within a maximum radius of 500 km. they do.

The existence of such situations can be considered as an opportunity for the export of our country's products. Unfortunately, the Trade Development Organization, with a business advisor, must definitely identify these areas and take action for the organized presence of the Iranian private sector in these centers and projectors for activists. It was created by the private sector and economic activists in Iran, which unfortunately has not been successful at the expense of the treasury over the past years, so the Trade Development Organization must be held accountable in this regard.

Iranian businessmen compete with each other and do not provide target market business information to other private sectors

Lack of organization and lack of serious presence of large economic companies and holdings in the markets of target countries, including Russia

Existence of current government instructions and directives and lack of export protection measures by the government:

Foreign exchange policy The return of foreign exchange from exports without discounts and taking into account the exporter's losses due to damage and corruption of agricultural products, which occurs mainly due to poor logistics infrastructure, as well as heavy costs of exporter marketing and customer acquisition, which causes exporters , Has been practically cruelly disrespected by the government and the central bank, and due to the problems caused by the debt of foreign exchange liabilities, cancels exports or uses other people's cards in order to escape from this bad event, and risks against the unhealthy flow of money. Created for exporters, and as a result, Iranian exporters will either flee their capital abroad or stop their export activities.

Receipt of value added of 9% of purchased goods and expecting its return after several months from the tax office is also unbelievable and due to delays in the return of value added tax, will reduce the financial capacity of exporters.

The unplanned and momentary decisions of the Market Regulation Headquarters sometimes to ban the export of goods that the exporter has already promised to deliver to the buyer are also one of the important factors in creating non-executive commitment of the Iranian exporter to foreign buyers.

  Accelerator solutions in developing export performance:

Reform the management of the Trade Development Organization of the country and hand over this seat to a more qualified and experienced person

Review the employment and formation of a strong and knowledgeable team of more prominent experts with more knowledge and experience and familiar with the behavior and culture of Eurasian member countries, especially Russia, to organize free trade negotiations with Eurasian countries.

Organizing the identification of opportunities in other neighboring countries' markets and connecting them to Eurasian and Central Asian countries from the territory of Iran and tying and establishing deep economic ties with neighboring countries

Entrusting many of the powers of the Trade Development Organization to the private sector, including trade consultations in neighboring countries, with the supervision and approval of the country's regulatory bodies in order to prevent and combat corruption.

Determining the mission and encouraging the holdings of a private entity to participate in the market of neighboring countries in three sectors (investment in logistics infrastructure - setting up a distribution and sales network and supply of goods - investment in production and processing units in neighboring countries)

Investment of the Shipping Company of the Islamic Republic of Iran in the installation of electricity generators to supply electricity required by ships under the management and ownership of the company in the Caspian Sea with the aim of transporting more refrigerated containers

Accelerate the construction of the Rasht-Caspian railway line to the Anzali Free Zone

Investment and installation of boogie system in Amirabad and Caspian ports of Anzali free zone

Procurement and construction of surface-to-surface ships in the Caspian Sea, which requires at least 10 vessels

Stop holding Eurasian conferences and spend time and money on developing and implementing an export accelerator action plan

Physical presence of a group of petrochemical producers in the Iranian trading house in Astrakhan, Russia in order to enjoy the opportunities of this market

Government assistance or support for the construction of a cold storage facility in Astrakhan, as well as a plan to build a cold storage facility in two Russian ports being established in the regions (Lotus Free Zone in Upper Astrakhan Oblast and Logan Port in the Republic of Kalmykia)

Accelerate the reconstruction of the Astara customs land terminal and strengthen the manpower and develop control and accelerator equipment in this land border in order to accelerate the traffic of trucks.

Development of Astara truck terminal at the entrance of the city and improvement of its welfare infrastructure

Paying attention to the improvement of the road along the land border of Bilesvar and the dialogue with the Azeri side for a similar action to improve the road across the border of Bilesvar

Emphasis on fulfilling the investment commitments of the Azeri side in completing the logistics infrastructure of Astara railway terminal

Resolving the crisis over how to charge for fuel from Russian trucks and banning oil companies from selling instead of selling diesel, which has become a hot topic among Dagestan Muslims.

Government assistance in launching Internet marketing in target markets

Serious government support in setting up sales networks in target countries

In the end, I emphasize that due to the very weak negotiations in the implementation of the Iran-Eurasia Interim Agreement, with the first priority, the negotiating team for establishing free trade between Iran and Eurasia, especially Russia, should think about the management of the Iranian team. He conducted the negotiations more carefully and cleverly, which requires the team to be aware of the strategic goals of the Eurasian member states in relation to Iran.

Seyed Jalil Jalalifar - Member of the Board of the Iran-Russia Joint Chamber - Tasnim