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Foreign investment opportunities in Iran and its free trade zones was the title of a seminar held in Singapore recently aimed at familiarising foreign investors with investment opportunities in Iran's Free Trade zones. Iranian delegates to the seminar explained the facilities set up at Iranian free trade areas to attract foreign investment.

What follows are excerpts from Mr. Bushehri's address at the Singapore seminar:

Qeshm with an area of 1,400 square kilometres including 150 square km of tropical forests is the biggest Iranian island in the Persian Gulf. It is nearly three times the size of Bahrain and Singapore combined. The Island is located at the mouth of the Persian Gulf not far from the Strait of Hormuz.

It is accessible through the Indian Ocean and the Persian Gulf. The location of the Qeshm Island is such that all ships sailing towards Iran, Iraq, Kuwait, Saudi Arabia, Bahrain, Qatar, the United Arab Emirates and Oman go past the Island. The Island is 120 km long located opposite the Port Cities of Bandar Abbas and Bandar Khamir on the southern coast of Iran. The strategic location of Qeshm Island connects it to an international market for 300 million people and to the Iranian market for 60 million people.

Iran's proven gas reserves is one fifth of the world's total gas reserves and the Qeshm Island lies at the centre of gas rich fields of the country. There are two vast gas fields near the Qeshm Island. One is `Gurzin' field which yields two million cubic meters of sweet gas annually for the power plant of Bandar Abbas and the other is the untapped field of `Salakh' whose reserves are believed to be more than the former field. The proximity of the Qeshm Island to huge oil fields makes it possible to establish oil refineries one of whose products cab be coal oil which is widely used in metallurgy. Such refineries can consume sulphur free crude oil that can be obtained from the oil fields adjacent to the Island. Therefore, the Qeshm Island has access to natural resources required for establishment of industries for production of export-oriented commodities such as oil and petrochemical products, construction materials and fisheries.

We are planning to continuously expand infrastructural facilities for setting up of industries on the Qeshm Island in an effort to attract necessary investments. Among infrastructural projects that are either under study or construction, reference can be made to construction of residential units, hotels, schools, a big airport, an international university and a large harbour. A 2.5 kilometre long bridge that will connect the Island to the mainland is among the project to be implemented.

At present, medium sized merchandise ships, launches and landing crafts can berth at the jetties of the Qeshm Island.

Only propeller-driven aeroplanes can now land at the Island's Airport. But an international airport is being constructed which is to become operational within the next year.

There are 200 km of paved roads on the Qeshm Island and a plan is underway to expand the Island's road network to 300 km by the end of the current Iranian calendar year (to end march 1995).

The Island has a 500 line telephone network and is also using 300 radio channels and 20 microwaves installed by the TELECOM national company. In addition, negotiations are in progress with international contractors to offer such services as telex lines, facsimile, long distance and local communications, international mobile telephones and so on.

On may 30, 1992, the Island was provided with 230 volt electricity through a high voltage transmission line. The power transmitted through the line amounts to 200 megawatts. This is added to the power generated by a power plant on the Island.

In our opinion, one of the advantages of the Qeshm Free Trade Area over other free trade zones is its native work force. Easy access of the Island to skilled manpower existing in the mainland is another feature of the Free Trade Area. Compared to its neighbouring countries, the Islamic Republic of Iran enjoys a young educated work force and the educational standards of the country are constantly improving from qualitative point of view in compliance with the policies of the Iranian government.

Authorities of the Qeshm Free Trade Area are obliged to expedite the economic development of the Island by creating a favourable atmosphere for attraction of foreign investments. The introduction of various incentives, both financial and non-financial, within the framework of the law and regulations of the Islamic Republic, has helped create an atmosphere suitable for foreign investments. The incentives include cheap energy, availability of efficient manpower and existence of necessary infrastructures. To achieve this goal, the world famous Swedish company, Sweeco, was invited to prepare the comprehensive development plan of the Qeshm Island on the basis of its relative advantages. The plan has been recently prepared in 19 volumes.

The most important objectives of the Qeshm Free Trade Area are as follows:

- Economic development of the region and prosperity and welfare of its inhabitants - Increasing the per capita income - Creating new employment opportunities - Attraction of domestic and foreign investments, - Development of international trade

We believe that achieving the above mentioned goals is possible by increasing production, establishing service industries and promoting tourism.

In our view, it is possible to implement the following projects in the Qeshm Free Trade Area:

- The projects whose raw materials can be provided domestically. - Projects whose raw materials can be obtained from abroad (because of the removal of bureaucratic formalities and customs duty exemptions those raw material can be easily imported from abroad). - Projects the products of which can be sold inside Iran or in the neighbouring countries because of the availability of regional markets. - Plans whose products are in demand in the markets of Europe and the Far East. - Ventures the implementation of which requires a great deal of energy (because energy is available on a large scale and at a logical cost). - Businesses that need abundant work force (because of the abundance of cheap skilled manpower in the region). - In short, any plan that can succeed because of the financial and non-financial incentives that are available in the Free Trade Area.

A railroad network connecting the Iranian port city of Bandar Abbas to Central Asia to the north and to the Qeshm Island to the south through a bridge to be constructed later, will make the Island an ideal terminal for re-export of goods manufactured in Central Asian states, to other countries of the region.

The organisation of the Qeshm Free Trade Area is seeking to facilitate investment and establishment of industries in the region. It will strictly refrain from involvement in executive affairs concerning business enterprises, and will solely try to provide necessary facilities for industrialists, businessmen and investors.

As for a plan to extend the geographical confines of the Free Trade Area so as to cover the whole Island, it should be noted that according to the Free Trade Zones Law, of the Island's total area of 1,400 square km, 300 square km belongs to the Free Trade Area. Such a restriction has created some problems in implementation of the desired schemes. In order to overcome the problem, the government has submitted a bill to the Majlis (parliament) calling for declaration of the whole Island as a free trade zone. It is hope that with the ratification of the bill by the parliament, development projects of the Island could be carried out more speedily.