New Phase of Iranian-Russian Economic Ties after the JCPOA

Date of publication : February 28, 2016 19:10 pm
New Phase of Iranian-Russian Economic Ties after the JCPOA

Date: February 27, 2016
Time: 16:00 to 18:00 (GMT +3:30)
Venue: The IRAS Institute, Tehran, Iran
Farhad Parand, Senior Fellow, The IRAS Institute; Commerce Expert, Trade Promotion Organization of Iran
Bahram Amirahmadian, Assistant Professor, University of Tehran; Senior Fellow, The IRAS Institute
Davood Kiani, First Deputy Director, The IRAS Institute
In this event, Farhad Parand said:
“One of our main problems in trade relations with Russia is the Ruble fluctuations which considerably increase the risk of business. Another important issue is how to enter the target market. Moreover, we only consider the issue of trade and totally neglect the issue of investment in our trade ties with Russia. Cross-border investment and firm bilateral relationship would create a sense of mutual trust between two nations.”
“Choosing the strategy in the international trade development is very important. We have chosen an introverted strategy unlike the world’s successful countries that have chosen an extroverted and export-based one. Moreover, we should consider these countries’ experiences in this field and our initial shortcomings, especially in the executive matters. Governments play a key role in the membership of the WTO and their impact on tariffs is very significant. However, in our trade relations with Russia, we have occasionally attempted to eliminate these obstacles. Nevertheless, the fundamental solution is to join the WTO and eliminate the obstacles to the international trade development both in tariff and non-tariff areas.”
“Another important issue is to know the market. knowing the market has a specific definition that includes identifying the demands of the customers, planning, and designing marketing plans such as specifying the target market, customer orientation, customer loyalty and finally, earning a profit. But, unfortunately, no one in Iran pays attention to any of these steps. Our knowledge of the Russian market is very partial. The cost of doing marketing research in Russia is also very high. Meanwhile, Iranian companies are small and their research budgets are very limited. Thus, turning these companies into holding companies and allocating a specific amount of annual budget to marketing research could be the solution to our problems.”
In this event, Bahram Amirahmadian also said:
“One of the major problems in planning for the development of the economic relations with Russia is the lack of accurate and real know-how. As soon as we begin to discuss the economic relations between Iran and Russia, it is brought up some estimates and predictions of the multibillion-dollar exchange which seem unprofessional and premature. Because, when we enter the practical world of trade exchange, different problems will arise from different perspectives. It should be noted that Russia is not an industrial country and its acceptance among the eight industrial countries (G8) is due to its power in the international dealings and also a gift from the rest of G8 state members. We also witnessed how they easily expelled Russia from this circle. Russia is a leading exporter of raw materials; however, the Russian Federation is very competitive in industries such as aerospace, power plants, nuclear plants, to name but a few.”
“One of the most basic necessities for export is the ‘route’. From decades ago, Iran and Russia have faced many restrictions regarding airways. At the same time, other communication routes present unique challenges of their own.”
“Another notable point is the importance of following the standards of quality as well as quantity. Any country including Russia has its own standards of inspections and quality which are according to the laws and regulations protecting the rights of its customers. Disregarding these standards will create major obstacles in the export growth.”
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