News ID: 264709
Published: 0401 GMT January 22, 2020

Official: Trade between Iran, Kuwait can reach $2b in five years

Official: Trade between Iran, Kuwait can reach $2b in five years

Iran and Kuwait can boost annual trade transactions with each other to $2 billion, from the current figure of $250 million, by setting out a five-year vision, said an Iranian official.

This is achievable in view of the two sides’ enormous trade capacities, added Mostafa Mousavi-Ameli, the vice president of the committee of Iran Chamber of Commerce, Industries, Mines and Agriculture (ICCIMA) for promotion of non-oil exports, in an exclusive interview with Iran Daily.

He described as an obstacle to the expansion of trade between the two countries, Kuwait’s refrainment from granting visas to Iranian traders, adding this can be resolved through diplomacy and negotiations between the two sides’ officials.

Excerpts of the interview follow:

 

IRAN DAILY: Would you please expound on Kuwait’s trade and economic capacities?

MOSTAFA MOUSAVI-AMELI: Since a long time, Kuwait has been famous, particularly in Iran, for its good economic conditions, as its people are financially able. The world’s strongest currency, currently, belongs to Kuwait, with the exchange rate between the dollar and the dinar standing at 4.5, meaning that the value of one dinar is as high as $4.5.

Kuwait, however, has nothing to export but oil. Its other export activities are limited to re-exporting other country’s goods and products. Kuwait sits on the world’s fourth largest oil reserves, which, given the country’s small area and population, has caused its people to have a high annual per capita income.

The country has heavily invested the capital it has accumulated though oil sales in international stock exchanges and, simultaneously, has kept the value of its currency stable. At present, Kuwaitis are deemed as big capitalists and trustworthy partners in international stock exchange markets.

On the other hand, Kuwait is a very lucrative market as the people of the country are basically willing to spend heavily on purchasing products, particularly foodstuffs and pharmaceuticals. This provides other countries with the opportunity to expand their exports to the Arab state.

 

To what extent do you think the potential exists for the two countries to expand trade and economic cooperation with each other?

 

Iranian and Kuwaiti people have a broad background of kinship and historical relations. Based on this, it can be said that Kuwait is not separate from Iran as a large number of people of Iranian origin, who are in possession of huge wealth, have been living in the Arab country for years. Currently, people of Iranian origin constitute close to 40 percent of Kuwait’s population. They had emigrated to Kuwait many years ago from the Iranian cities of Yazd, Isfahan, Shiraz, Behbahan, Khuzestan, Abadan, Khorramshahr, Ahvaz and Bushehr.

Up until 70 years ago, Kuwait’s trade transactions were mainly with India and Iran.

Also, a major part of Kuwait’s population, close to 45 percent, comprises Shia Muslims, which is why the people of Kuwait feel an inclination toward Iran.

In addition, compared to other Persian Gulf littoral states, Kuwait is a more democratic country.

The value of trade between Iran and Kuwait currently stands at $250 million, mostly comprising Iranian exports.

 

What is the reason for the low volume of trade?

 

I personally believe that in Iran’s foreign policies and those of the Iranian Ministry of Industry, Mine and Trade, other regional states such as Iraq, Oman, Qatar and Afghanistan are given a higher priority. Iranian traders are faced with great difficulty for obtaining visas for Kuwait and marketing their products in the country.

This problem, however, has existed for 20 years and appears to be a political one. Kuwaitis are conservative toward Iran, seeking not to upset the US and Saudi Arabia. This, nevertheless, is resolvable through negotiations between Iranian and Kuwaiti officials.

In whose favor is the trade balance?

 

It is in Iran’s favor. Major Iranian export items are foodstuffs, agricultural crops and construction materials. Iran’s handicrafts, luxury goods, dried fruits and polymers can also find lucrative markets in Kuwait. This is while Iran can import cars and auto spare parts from the Arab country.

 

If all obstacles were removed, what would be the amount of annual trade between the two countries?

 

In that case, it could reach $600 million in a year and $2 billion in five years.

 

Can Kuwait be a lucrative market for Iran’s techno-engineering services?

 

Yes, in the field of building construction and exporting constructional materials.

 

   
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