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Iran Economy Update
Issue 39/2017 WEDNESDAY MARCH 29RD
Iran and Russia sign a string of bilateral agreements to flourish economy
On Tuesday, the Iranian and Russian presidents issued a 16-page joint statement named “moving forward towards comprehensive strategic cooperation.”
According to IRNA, the statement underlines that at the end of the visit of the Iranian president, the two countries have reached “extensive” agreements in bilateral, regional, and international spheres.
Mehr news wrote that in front of the two presidents, 14 MoUs were signed including extradition of convicts, cooperation in criminal and civil cases, eliminating tourist visa requirements, electricity exchange, physical exercise, house construction and public services. Also, agreements were signed between the Institute of Standard &
Industrial Research of Iran (ISIRI) and its Russian counterpart institution, between the Iranian ICT ministry and Russian ministry of Telecom & Mass Communications, between the Islamic Republic of Iran Railways and Russian Railways, between the Iranian Atomic Energy Agency and the Russian Rosatom, between NIOC and Russian Rosgeologia, between ICCIM and the Roscongress Foundation, and between NIOC and Gazprom. Iranian local media have not provided more details about the agreements signed in Moscow.
AFP quoted President Putin as expressing satisfaction in a televised comments that trade volume between the countries had
"grown more than 70 percent" last year.
"This is truly a good result considering that it was achieved in unstable global conditions and amid persistent volatility on the commodity and currency markets," Putin said. Meanwhile, IRNA has quoted President Rouhani as saying in an address to the Iranian residents in Moscow that “the
two countries are determined to increase their bilateral annual trade to $10 billion.”
IRNA wrote that trade volume between Tehran and Moscow grew 70% in 2016 compared with 2015, and reached about
$2.2 billion.
In a joint session with Putin on Tuesday afternoon, President Hassan Rouhani said relations between the two countries have moved forward “beyond the ordinary”, and said new agreements have been reached to provide further impetus to the bilateral economic relations. “The decisions we made in the past months and today as well indicate that Tehran and Moscow are moving forward towards strategic relations in their economic, cultural, and scientific relations,” said Rouhani.
“The implementation of the decisions we previously made, including in establishing two new [nuclear] power plants in Bushehr, a thermal plant in Bandar Abbas, and cooperation in the railway sector including in electrifying the Incheh-Borun railway, and also the agreements the two countries reached for developing trade interactions in the fields of food industry, agriculture, and industry, as well as the new decisions we made during this trip all indicate the Iran- Russia economic relations are developing to a new level, and we’ve move forward from ordinary relations towards the ties based on long-term large scale projects,” said Rouhani, according to Mehr news.
Rouhani said that the issue of completing the North-South Transport Corridor, discussions on the issue of connecting Moscow to Bandar Abbas and the benefits this connection will bring about will continue through tripartite sessions between Iran, Russia and Azerbaijan.
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“Establishing a free zone between Iran and the Eurasian member states was another issue we discussed today that can facilitate trade between Iran and the 5 Eurasian Union countries.” Rouhani said the two presidents also discussed regional issues including cooperation in countering terrorism and continuing the peace talks between Iran, Russia and Turkey. He said they also discussed the Caspian Sea Legal Regime issues.
Speaking at the press conference, President Vladimir Putin said he and his Iranian counterpart reached agreement on Russian investment in Iran’s energy sector and building power plant in the Persian Gulf region. The two sides also agreed on developing cooperation in manufacturing aircrafts as well as the export of Russia- made Sukhoi, said Putin. Nuclear cooperation, food, agriculture banking, and establishing free zone between Iran and the Eurasian Economic Union were some other areas Putin said the Iranian and Russian delegations negotiated on Tuesday. He also said the two countries agreed on increasing educational and cultural cooperation, including the establishment of Russian language courses in 10 Iranian universities, and boosting tourism industry.
Putin said his country supports Iran’s membership in the Shanghai Cooperation Organization and underscored that from the Russia’ point of view, this membership will help establishing economic stability in the region.
ICCIM President Gholam-Hossein Shafeie who is a member of the high-profile Iranian delegation to Russia said Iran tries to establish Preferential Tariff Agreement with the Eurasian Economic Union countries.
CBI Governor Valiollah Seif said negotiations were held with Russian banks for establishing links between the Iranian and Russian switch (debit) card systems to facilitate banking operations for the two
countries’ tourists. According to Mehr news, he said the two sides also discussed establishing a joint special account to facilitate clearing bank accounts, and added that the Iranian Bank Melli and Russia Gazprom Bank will be involved to move the procedures forward.
“Fortunately, we are in a positive status that large Russian banks have shown interest to open accounts for Iranian banks. In this regard, part of our settlements with the international banks, that formerly used to be carried out through our southern neighbors, will be transferred to the Russian banks.
This is an overhaul and will pave the way to facilitate the conduct of international payments, and with regard to the extensive networks the Russian banks have, it will yield positive results for us,” said Seif.
“Russian banks are interested in having branch and representative offices in Iran or become stakeholder of Iranian banks and we held negotiations in this regard with them,” Seif added.
Meanwhile, Reuters wrote in a report on March 28 that after meeting on Tuesday, Russia and Iran pledged to continue efforts to rein in oil production and stabilize markets. "Russia and Iran will continue cooperation in this sphere (in oil output cuts) in order to stabilize the global energy market and ensure stable economic growth," the statement from Russian President Vladimir Putin and Iranian counterpart Hassan Rouhani said, according to Reuters. Iran’s Petroleum Minister Bijan Zangeneh told reported in Moscow on Tuesday that a global deal is likely to be extended, but time was needed to discuss the subject thoroughly. "It seems that most of the OPEC and non-OPEC (countries) are going to extend the agreement, but time is needed to evaluate the situation and to have face-to-face meetings and discussions with others,"
Reuters quoted Zangeneh as saying.
