Sadegh Sadeghpour

Aras Free Zone and Its Potentials for Expanding Iran-Russia Economic Cooperation

Date of publication : May 8, 2017 11:22 am
Aras Free Zone is an environment ready for the bilateral and multilateral economic cooperation between Iran and Russia and the countries of the South Caucasus. Aras Free Zone with an area of 51,000 hectares of land, relying on its fully prepared investment infrastructure (facilities including water, electricity, gas, and the development of connecting roads), as one of the Turkish investors said while visiting this Zone, is like a prepared cake that any country is willing to win a significant share of it.
In addition to the readiness of infrastructure, this important economic region of Iran has a master development plan for the fields of industry, agriculture, trade, transit and tourism, and it can be said that the industry possesses the backbone of the formation of this region with a share of 59 percent of investment in four industrial phases: heavy, high-tech, and light industries and processing agricultural products from more than eight countries in the region and the world.
Along with the industrial sector, the agriculture in the region having several thousand acres of garden field which are completely mechanized in Gordian, Golfaraj, downstream lands of Khodafarin Dam and the greenhouse phase of several hundred hectares, has the second largest share in the economic structure of Aras Free Zone. This region with modern business centers, newly established resorts, stunning historical-natural tourist sites witnesses every year the presence of millions of Iranian and non-Iranian tourists, and during the Nowruz (Iranian New Year) holidays of 2017, Aras had the largest share of Nowruz tourists in the North West of Iran.
Besides, the town of Julfa, in which the first electric train on Julfa-Tabriz route was launched by Russians, has long been one of the most important centers of Iranian Customs, and during the Iran-Iraq war, since this town was away from the battlefield and the Iraqi aircrafts had no access to it, it had the highest share to supply Iran’s imports needs. However, after the damaging war broke out in the Nagorno-Karabakh region, and the rail transit route was blocked, Julfa railway line has been limited to the territory of Iran; however, the revival of this railway line on the side of Iran which is pursued by the railway project of Julfa-Norduz -Aslanduz, and the study research on it which ended in Aras Free Trade-Industrial Zone Organization alongside making the Julfa- Norduz route a two-lane route, have all increased the hopes for reviving the transit role of Aras Free Zone more than the past.
Areas of economic cooperation between Iran and Russia in Aras Free Zone
As mentioned, industry has the largest share in the Aras economy. In the industrial areas, Iran and Russia have reached agreement on many cases in recent years in the form of cooperation for the joint production, and Aras Free Zone can be the best place for having them operationalized. According to the “Russian aviation website”, the Russian helicopter company announced that light non-military helicopters would be assembled in Iran. In terms of industrial history, the presence of skilled and industrial manpower, industrial investment infrastructure, and most importantly, the security of investment, Aras Free Zone can be the best choice, and the cooperation related to information technologies and the fact that one of the few optical fibers of the country passes through Julfa, make Aras Free Zone the most suitable option for the development of cooperation based on IT. Another case is the construction of agricultural equipment and machinery such as Russian combines in Aras Free Zone. Also the Russian cars which entered into Aras Free Zone in recent years, have found special fans due to the easy terms of imported foreign cars to this region, and they seem very appropriate in terms of price and quality to these fans.
In the field of agriculture, according to experts, in the near future, Aras Free Zone will be able to produce more than 100 thousand tons of a variety of tropical stone fruits (apricot, cherry plum, peach, nectarine) and greenhouse products (cucumber, tomato, bell pepper) in its various agricultural phases. Russian large consumer market is considered the best option for processing and exporting these products with the participation of Russian companies. Currently, the biggest highly mechanized greenhouse of Iran in Aras Free Zone, with the area of more than several hectares, is producing and exporting products to Russia.
In the field of transit, in addition to the fact that the Russian side is expected to revitalize the previous railway line - as Russian companies have invested several hundred billion dollars in the infrastructure of Europe and the CIS, and the energy transit and trade are of high importance to this country -, Russia can also study Julfa- Norduz-Aslanduz railway to decide on forming a joint venture with Iran. Certainly in this case, freight cars full of agricultural products can be easily sent from Aras Free Zone and the fertile Mugan plain to the Russian markets on a daily basis, and the Russian goods, targeting Iran or peripheral areas, will be also sent to Aras Free Zone as a depot and distribution center.
Joint Free Zone between Iran and the Eurasian Customs Union (EACU) on the Iran-Armenia Border as the Result of the Bilateral Cooperation between Iran and Russia
The issue of creating a joint free zone between Iran and the Eurasian Customs Union on the Iran-Armenia border is generally asked for. This region which will be again located in Aras Free Zone can complement the bilateral cooperation between Russia and Iran; especially on the case of Russia’s regional partner - Armenia - which for its development and economic strength, Russia highly needs to preserve its only traditional base in the South Caucasus, and not to lose it due to socio- economic upheavals.
If Iran and Russia jointly cooperate in Aras Free Zone, not only Armenia can have access to a huge consumer market, and can particularly attract Iranian tourists, but also it can meet its economic-trade and transit needs through the trade- industrial cooperation between Iran and Russia. The presence of Iranian and Russian banks in the joint free zone can also facilitate the bilateral economic cooperation between the two countries in the form of establishing a joint bank based on the rules of Iranian free zones.
In the end, it should be said that more than Iran, Russia needs to show its will to expand cooperation, especially in the field of economic and industrial cooperation. We all know that probably the most important factor that the Russian President accepted the covert and overt requests of Erdogan, the Turkish President, for resuming the relations between the two countries is the volume of trade and economic cooperation between their countries. A fact that could give convincing answers to many questions raised, and even prevented some problematic events occurring in relations between Turkey and Russia. So to strengthen the bilateral relations between Iran and Russia, the economic cooperation between the two countries should be further developed. This is the main principle that turned the European Union from an organization cooperating in the field of coal to a union with common currency.
Sadegh Sadeghpour, an analyst on Eurasia affairs, is the International Affairs expert at Aras Free Zone.

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