the role of social justice in development of developing countries the china + india factor:...

The Role of Social Justice in Development of Developing Countries

The China + India Factor: Implications for Developing Countries in the Asia and the Pacific Region

UNIDO General Conference12th Session ,Vienna; Austria, 3 to 7 December 2007

Dr. Mohsen SHATERZADEHDeputy Minister For Economic & International Affairs

Ministry of Industries and MinesISLAMIC REPUBLIC OF IRAN

The potential in South and Developing Countries

Substantial Energy Resources

Countless Mineral Resources and Abundance of Raw Materials

Low cost Labor

High level of Knowledge and Technology available to meet countries' current needs

World Class Educated and Trained Workforce

UNIDO General Conference12th Session, Vienna; Austria Dr. Mohsen SHATERZADEH

Low costs of production

The magnitude of trade between South-South Countries

The Large population of South countries (over three quarter of world population)

To develop Main Value Added margin for global manufacturing in South countries

UNIDO General Conference12th Session, Vienna; Austria

The potential in South and Developing Countries

Dr. Mohsen SHATERZADEH

A glance to Global Brands

While the Global Brands make significant amount of profits by building their products in South Countries, the South has no share in Value Added Margin.

One third of world's wealth belongs to Global Brands which are located in North Countries, but making their products in South.

The aggregate value of 100 Global Brands were USD1,090 billion (as to Business Week) equivalent to gross domestic product GDP of 65 countries


Another words, revenue of the countries manufacturing products for Global Brands, are even lower than 1/5 of Global Brands' Goodwill.

This is Neo Exploitation

Whereas, economic growth would be sustainable if human relationship excludes exploitation and repression.


A glance to Global Brands


The Win-Win Mechanism in South-South Cooperation

To develop Economic Relation based on Peace and Social Justice and respect justly rights in human relations.

Maintaining production cycle from raw material to the final product in South and exporting the surplus to other countries.

Transfer of Science, Technology and Industry available to the developed countries in South, based on their needs and requirements through breaking monopoly of technology and their development in South


Identifying advantages of countries in terms of natural resources, energy, mines, raw materials, to exchange in between South producing countries with respect to their national interests.

Participation of South in establishment of multinational corporations in various fields such as Energy, Petrochemical, Vehicle, Foodstuff, Textile, Cement, Minerals, Machinery and Equipments, to develop existing and future projects and to perform international projects if the capacity exceed the needs




Founding multinational Banks, Financial Funds and Insurance corporations with partnership of South to make financial contributions to large projects implemented in South and investment in production and industrial development.

Allocation of funds earned from industrial development profits and economic growth yields to implement social projects for poverty reduction, contribute to diseases and pest control and prevention plans, and other Social and Cultural development projects.

Forming Joint Air, Marine and Land Transportation Corporation between South for exchange of goods with preferential tariffs




Challenges in Cooperation of South-South

Dominance of unfair and unjust relationship between South-South

Formation of Commercial, Scientific, Technologic and Economic Monopolies.

Inaccessibility to Financial Resources, Long Term Investment Funds and Effective Financial Institutions and Insurance industries.

Lack of Infrastructure Development contributing to industrial development


Dominance of unfair and unjust relationship between South-South

Formation of Commercial, Scientific, Technologic and Economic Monopolies.

Inaccessibility to Financial Resources, Long Term Investment Funds and Effective Financial Institutions and Insurance industries.

Lack of Infrastructure contributing to industrial development




Lack of Cultural and Social Development.

Increasing trend of Disparity between rich and poor.




The general view of Industry and Mine sector in “20-Year Development Perspective” Document

In line with objectives set in “20-Year Development Perspective” Document, by 2025, the Industry and Mine sector will reach to the premier Economic and Industrial position with following characteristics:


Visionary, innovative and developed based on advanced technology

Self sufficient in providing Strategic Commodities Export Oriented, to obtain major part of foreign

exchange, through export. Balanced in different parts of country based on regional

capabilities and advantages. Exploiting available resources to the desirable level. Synergic in forms of Networks, Clusters and Chains Compliance with Regional and International Standards


The general view of Industry and Mine sector in “20-Year Development Perspective” Document


Industrial Development Strategy

Industrial Development Macro-Policies


Industrial Development StrategyMacro Policies

Industrial development established by private and cooperative sectors, emphasize on public participation, in forms of private and public stock companies, in accordance with decrees issued by Supreme Leader based on Article 44 of Constitution.

Positioning Economic Policies and exploiting comparative advantages in development of competitive advantages and promoting competitive factors in industrial and mine sectors to match world standards.

Positioning industrial development based on value added and competitive advantages and expansion of Export Capacity.

To complete Value Added Chain in Industry, observing competitive factors and practices in global arena.



Developing an effective and enduring inter-industry interaction to develop synergy and competitive edge in entire Industry and Mine sector

Directing industries to use tools used to catch local market opportunities, for international market entry

Investment in developing Iranian Brands for Industries and their promotion in global Market.

Suggesting advanced technology in industry and mine sector and establishing Hi Tech industries associated with technical and scientific enhancement.



Absorb, develop, and enhance the capability of technology based on industrial design abilities in conceptual, basic, descriptive sectors.

Expansion of applied/developing research and engineering design, to transfer and exploit technologies, matching to priorities of sector and global change trend and re-positioning of exports.

Positioning of privatization to increase performance and competitiveness

To establish culture of using domestic products Emphasize on promotion of technology in enterprises,

reform the organizational culture and increase volume of investment in international market research and marketing



Developing mining industry for optimum exploitation of mines and energy resources, and establishing bond in between small, medium and large industries, and setting up industrial clusters

Remove barriers and facilitate the process of growth for art and handicrafts industry for export

Permanent industrial development, while observing environmental consideration.

Encourage foreign investment to reach and transfer technical know-how and technology, improvement of managerial and technical capabilities, and access to international markets through international marketing networks, foreign investment firms, have a reach to complementary financial resources.



To establish contact between local and foreign enterprises, with emphasize on reaching foreign markets and moving towards economy of scale, and shift towards higher value added activities

Educating industries to wisely meet rules and regulations of WTO within an incremental process and move towards goal oriented trade liberalization

Improvement of human resources, basic science, and expertise.

Reform "industrial policy making", to view industry and trade as a whole, while focusing on influence of industrial policy on other economic sectors.



To create a streamlined and effective organizational systems for industrial decision making and assessment of policies' performance

Industrial development based on capacity of territory and fair distribution of resources, opportunities, national wealth according to regional and provincial potentials.

To increase efficiency in production and improve quality and raise organizational eminence

To establish and empower financial and development institutions to support industry and mine sector, continuously.

Expand and improve national standards and compliance of quality assessment systems in accordance with international standards


VOLUME OF FOREIGN INVESTMENTS UNDER FIPPAby sector

(THOUSANDS US$)

0

2000000

4000000

6000000

8000000

10000000

12000000

20062005200420032002200120001999199819971996199519941993

Indusrtie & Mine sectors Other Sectors All Sectors


Appreciation of FDI as a result of Comparative and Competitive Advantages of IRAN


No. of Foreign Investment under FIPA (1993-2006)


0

10

20

30

40

50

60

70

80

90

Industries & Mines 2 3 5 13 17 6 18 16 7 25 36 25 48 60

Other Sectors 0 0 2 0 2 0 0 0 0 3 4 6 13 20

All Sectors 2 3 7 13 19 6 18 16 7 28 40 31 61 80

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006


Annual Growth Rate of (Non-Petroleum) Industrial & Mineral Exports

3.8

28.9

61

0

10

20

30

40

50

60

70

1st Dev. Plan 2nd Dev. Plan 3rd Dev. Plan

Perc

en

tag

e


The Industrial Exports Ratio to Non-Petroleum Exports reached to 78% in 2006 from 32% in 1994


Total Contract Value of Technical & Engineering Services Exported under MIM's Supervision(million dollar)


0

1000

2000

3000

4000

5000

6000

7000

8000

9000

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Year

Tota

l Con

trac

t Val

ue


Annual Growth Rate of Technical & Engineering Services Exported in last 4 years

106%78%

65%

395%

0%

50%

100%

150%

200%

250%

300%

350%

400%

450%

2003 2004 2005 2006

Year

Perc

en

tag

e


The 4 year average for annual growth rate reached to 161%


Industry Quantitative Goals on 2025


Description % MILLION$ HIGH TECH INDUSTRIES 19.9 11630

MACHINERY and EQUIPMENT 12.9 10080

VEHICLE 11.4 27913

ENERGY based INDUSTRIES 11.3 51960

AGRO INDUSTRIES 11.2 15973

METAL MINERALS 18 137311

NON-METAL MINERALS 14 191075

TOTAL 445942

These investments will cover different industrial sectors, supported by sustainable growth. In this perspective the annual industrial growth rate is projected over 11.5%


Reasons to Invest in Iran

Iran qualifies from many respects to be a good location for investment and doing business.

Some of the features are:



1. Strategic Location: A unique geographical location at the cross-road connecting the Middle East, Asia and Europe, empowered by many inter-and trans-regional trade, customs, tax and investment arrangements;

2. Privatization Plans and Article 44 of the constitution: The result of IRAN' s development plants and article 44 of the constitution; Public companies will be privatized and some state sectors will transfer to the non-state sector.

3. Market Potentials and Proximity: Vast domestic market with a population of 65 million growing steadily as well as quick access to neighboring markets with approximately 300 million inhabitants;

4. Labor Privileges: Large pool of trained and efficient manpower at very competitive costs in a diversified economy with an extensive industrial base and service sector;




5. Membership of international groups/organizations (some of them are as bellow): Customs Co-operation Council (CCC), Economic Cooperation Organisation (ECO), Economic and Social Commission for Asia and the Pacific (ESCAP), Food and Agriculture Organisation (FAO), International Bank for Reconstruction and Development (IBRD), Islamic Development Bank (IDB), International Finance Corporation (IFC), International Labour Organisation (ILO), International Monetary Fund (IMF), International Organisation for Standardisation (ISO), Organisation of the Islamic Conference (OIC), Organisation for Petroleum Exporting Countries (OPEC), Permanent Court of Arbitration (PCA), United Nations (UN), United Nations Conference on Trade and Development (UNCTAD), United Nations Industrial Development Organisation (UNIDO), World Confederation on Labour (WCL).


6. Developed Infrastructure: Territory developed networking in the area of telecommunication, roads and railways across the country;

7. Low Utility and Production Cost: Diversified range of energy, telecommunication, transportation, as well as public utilities;

8. Abundant Natural Resources: Varied and plentiful reserves of natural resources ranging from oil and gas to metallic and non-metallic species reflecting the country’s accessibility to readily available raw materials;

9. Climatic Characteristics: A four season climatic endowment as a privilege to agricultural activities throughout the country and throughout all seasons;




10. Fiscal Incentives: Reduced tax rates from 65% to a flat fixed 25% rate of tax income despite various tax holidays highlighted as follows:

Highlights of Tax Holidays

Activity Level of Exemption Duration of Exemption

Agriculture 100% No Time Limit

Industry and Mining 80% 4 Years

Industry and Mining in Less-Developed Areas

100% 10 Years

Tourism 50% No Time Limit

Exports 100% No Time Limit


11. Political Stability: Representative system of government based on friendly relationship with other nations;

12. New Investment Legislation: Enactment of new Foreign Investment Promotion and Protection Act (FIPPA) to substitute the former Law Concerning Attraction and Protection of Foreign Investments in Iran (LAPFI) providing full security and legal protection to foreign investments based on transparency and international standards.



THANK YOU for YOUR ATTENTION

Dr. Mohsen SHATERZADEHDeputy Minister For

Economic & International Affairs

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