Iran has recorded improved trade balances with 100 countries in the fiscal year 2003-04, due in part to government interventions that include support for letters of credit (L/Cs).

In an analytical report, the Economic News Desk of the official IRNA news agency said Iran owes its success to its active economic diplomacy and efforts to prepare the ground for the promotion of non-oil exports.

Export support

The study analyzes the period 1997-2002 during which Iran's promotion of non-oil commodity exports included measures such as tax exemptions for exporters of goods and services and selective price support measures.

In the 1995-96 fiscal year, Iran recorded increased trade balances with just 56 countries.

L/C support

The report also describes the government's support for "voluminous letters of credit".

Last year the Export Guarantee Fund of Iran (EGFI) said it would support L/Cs for trade with Iraq (DC World News 12 August 2004) and South Africa (DC World News 30 December 2004). Earlier this year the EGFI said it would support L/Cs to boost trade between Iran and Pakistan (DC World News 8 August 2005).

The government also claims that in the years under analysis improvements were made to the banking system which, according to the study, made the banking sector more competitive.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.