Persian Files ISSN 2975-0598 Volume 18 Issue 1
Author: Silvia Boltuc
The Anzali Industrial-Trade Zone, situated in the northern region of Iran, is poised to emerge as a pivotal logistic and industrial nexus, facilitating seamless connections between the Iranian market and neighbouring countries, as well as members of the Eurasian Economic Union, the Commonwealth of Independent States, and the Shanghai Cooperation Organisation.
Recent reports from the Iranian media underscore the significance of this trade zone, alongside other free trade and industrial zones across the country, in realising Tehran’s ambitious economic agenda. This strategic initiative aims to diversify Iran’s revenue streams and exports, thereby reducing its reliance on the volatile oil sector.
This report is dedicated to assessing the strategic importance of the Anzali Trade-Industrial Zone, with a comprehensive assessment of its prime location, Tehran’s overarching economic strategy, and its integral role in the broader regional geopolitical landscape.
The Anzali Trade-Industrial Zone: Background Information
On Sunday 5th, 2023, Alireza Jahangiri, the Iranian Assistant Minister of the Foreign Affairs for Caspian Sea Affairs, visited the Anzali Trade-Industrial Zone and met the representatives of the Zone.
Jahangiri stressed the important role that Anzali Zone plays in connecting Iran with Eurasian Economic Union (EAEU), the Shanghai Cooperation Organisation (SCO), and the Economic Cooperation Organisation (ECO).
He also welcomed the ongoing plan of the Anzali Free Zone Organisation to create joint free zones with the countries bordering the ‘largest lake in the world’. Indeed, Anzali Free Zone has signed several memorandums of understanding with Kazakhstan’s Octao, Lotus and Dubna special economic zones in recent years in order to draw a model for joint cooperation,
On November 4th, 2023, Hojatollah Abdolmaleki, the secretary of Iran’s Free Zones High Council, stated that 70% of the country’s transit is carried out thanks to free trade and special economic zones. He also highlighted that the Iranian central authority has established 94 free trade and special economic zones across the country.
Iran’s free trade and special economic zones have emerged as pivotal drivers of the country’s economy, exemplified by their substantial contribution to non-oil exports. These zones facilitated a remarkable achievement, with one-third of Iran’s total non-oil exports being conducted through them.
Currently, over 2,500 companies operate within these zones, directly employing over 7,000 individuals, underscoring their significance in generating employment opportunities and fostering economic activity.
The inception of free trade zones in Iran traces back to 1990, a response to the decline in the country’s oil revenue the previous year. This strategic move was aimed at diversifying and promoting non-oil exports, ultimately bolstering the nation’s economic resilience.
The pioneering steps in this endeavour led to the establishment of the first two free trade zones in the southern region of Iran: the Kish Free Trade Zone and Qeshm Free Trade Zone. Subsequently, five additional free trade zones have been established across the country, each strategically positioned to maximise their respective regional advantages: the Chabahar zone in the southeastern Sistan-Baluchestan Province, the Arvand zone in the southwestern Khuzestan Province, the Anzali zone in the northern Gilan Province, and the Aras and Maku zones in the East-Azarbaijan and West-Azarbaijan Provinces.
Geopolitics of the Anzali Trade-Industrial Zone
The Anzali Free Trade-Industrial Zone, strategically located on the Caspian Sea, serves as a pivotal gateway for Iran’s trade relations with its northern counterparts, particularly Russia.
Functioning as a vital node within the International North-South Transport Corridor (INSTC), Anzali port plays for Tehran an important role in facilitating the efficient transfer and transit of goods between East Asia nations and Europe.
The Zone’s geographical advantage positions it as a linchpin in regional logistics and trade operations. Furthermore, the proximity of Anzali port to Rasht, the capital of Gilan province establishes Anzali as a prominent tourist destination within Iran.
Leveraging these inherent strengths, in 2005, the Iranian government established the Anzali Free Trade-Industrial Zone, initially spanning approximately 3200 hectares.
Subsequently, in 2014, boundaries were expanded, enlarging the Zone to a substantial 8609 hectares. The Zone’s principal focus rests on fostering the growth of the transportation industry, augmenting trade and commercial services, bolstering the tourism sector, and advancing processing, agricultural, and eco-friendly industries.
This Zone encompasses two distinctive geographical sectors. The eastern segment, located in close proximity to the Anzali Wetland, predominantly comprises port and customs facilities, an industrial township, and natural resource zones.
Conversely, the western sector encompasses agricultural lands, primarily dedicated to cucurbit cultivation and orchards, alongside tourist and recreational amenities. The port area spans 2.68 hectares, featuring 10 mechanised wharves with a combined capacity of 50,000 tons.
Notably, the imminent establishment of the Caspian port as a third-generation port, boasting 22 berths with a staggering capacity of 11 million tons, is poised to transform the Anzali Free Trade-Industrial Zone into a pivotal regional logistics hub, driving warehousing, distribution, and marine industry development.
As Mohammadvali Rozbahan, the CEO of the Anzali Trade-Industrial Zone, underlined, this area copes with the government’s desire to develop relations with the Eurasian Economic Union (EAEU).
The north of the country, along with the appropriate infrastructure and platforms for any kind of productive investment, trade, tourism and transit, might become an opportunity for investors who are looking for a logistic centre linked with Russia and the EAEU.
Located in the position of the northern anchor of the country in the International North-South Corridor (INSTC), which connects the Persian Gulf and East Asia to Europe through Iran and Russia.
Indeed, the Zone is close to the ports of Astrakhan and Lagan in Russia, Krasnovodsk in Turkmenistan, Octavo in Kazakhstan and Baku in Azerbaijan as well as the Rash International Airport and the largest oil and gas reserves of the Caspian Sea.
Conclusion
Iran is using free trade, economic, and industrial zones as a key tool to improve its economy and reduce its dependence on the oil and gas sector. These special zones have already shown their ability to attract investments and gain attention from Iran’s regional trading partners.
Furthermore, these zones highlight Tehran’s shift towards the East as the Vienna talks failed to revive the JCPOA agreement. Iran has demonstrated its willingness to meet Europe’s natural gas needs but is now taking proactive steps to address its economic challenges without waiting for action from Brussels. These special zones might attract investments, expertise, and generate job opportunities.
Iran’s strategic location is a significant advantage. The country can serve as a bridge between South-East Asia and Europe on one side, and the Gulf and Russia on the other. Iran has access to deep waters in the Persian Gulf with multiple ports and in the Caspian Sea.
Another crucial aspect is the Islamic Republic’s agreement with the EAEU and its membership in the SCO and BRICS. Being an active participant in these organisations not only provides Tehran with multiple platforms for negotiating trade agreements but also enhances Iran’s perceived stability and reliability in the eyes of other members. This contributes to building trust among potential future investors.
The country plays a crucial role for the Caspian littoral countries, as Central Asian nations have expressed interest in using Iranian ports for importing Indian goods on several occasions. Additionally, improving connectivity among Caspian ports could benefit not only the littoral states but also contribute to regional stability and reduce tensions related to the areas of contention in the Caspian Sea.
While Europe may not be actively supporting the Iranian economy or seeking to boost its regional influence, Brussels could potentially leverage the reduced tension in the Caspian Sea to its advantage. In the future, it might benefit from the Caspian ports and free trade zones to pursue European interests.
In conclusion, Iran’s strategic initiatives in the form of free trade, economic, and industrial zones, along with its geopolitical positioning and participation in international organisations, demonstrate its efforts to diversify its economy and play a significant role in regional trade, potentially offering opportunities for various stakeholders in the future.
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