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News code: 5973
Published Date: 2017-10-15 15:18

Innovation a Sustainable Alternative to Oil-Based Economies

Innovation a Sustainable Alternative to Oil-Based Economies
News  - ECO believes that the basis for a strong economy is rooted in culture and expands interactions through what it calls “innovative economy”

The Economic Cooperation Organization, founded in 1985 in Tehran by Iran, Turkey and Pakistan, is the second largest regional organization after the European Union in terms of geography (close to 8 million square meters) and population (over 463 million).

"The foreign trade of ECO member states currently stands at more than $845 billion per year," the head of ECO Cultural Institute, Mohammad Mehdi Mazaheri, told Financial Tribune. ECO member states include Afghanistan, Azerbaijan, Iran, Kazakhstan, Kyrgyzstan, Pakistan, Tajikistan, Turkey, Turkmenistan and Uzbekistan. Northern Cyprus acts as an observer state.

ECO's secretariat and cultural institute are located in Iran, its economic bureau is in Turkey and its scientific office is in Pakistan.

ECO members' main exports consist of oil and gas, textile, steel, minerals, chemical products and grains, while their imports include energy, vehicles and machinery.

Iran: ECO's Second Economic Power

Iran, after Turkey, the official said, has the biggest foreign trade turnover in terms of weight and value among the member countries.

The country's main exported products are oil and gas, petrochemicals, minerals and foodstuff.

"The share of ECO countries in the global GDP has increased from 2.6% in 2000 to 2.63% in 2015, which is the latest figure at hand, since collective data for the region are released by ECO's secretariat every two years," Mazaheri said.

"Also, ECO members' share of the world population has increased from 5.73% to 6.23% over the same period. We are now considered a relatively strong economic block in the world. Though our achievements might not seem that big, yet prospects are very high, indeed."

According to the official, ECO accounted for 2.1% of global trade in 2015, compared with 1.14% in 2000.

"Given the fluctuations in oil prices during the 15-year period, recessions in major economies, including those in the EU in 2008 and afterwards, as well as security issues in the region, I have to say this growth is very eye-catching," he said.

Over the same period, Mazaheri said most of the ECO members managed to enhance their ranking in international indices, including the ease of doing business and global competitiveness.

"ECO has had a better performance in these areas compared with similar organizations such as the Association of Southeast Asian Nations and South Asian Association for Regional Cooperation," he said.

"Turkey, Iran, Pakistan and Kazakhstan are the four major economies in the region with a share equal to 46.4%, 23.96%, 10.97% and 9.46% of ECO's total GDP respectively in 2015."

According to the ECO statute, the diplomat said, the members have agreed to cooperate in fields that directly or indirectly relate to facilitation of trade between their countries. These include banking interactions, transportation, customs, standardization, accreditation, meteorology and conformity assessments, to name a few.

Cultural Drive

Mazaheri noted that ECO believes that the basis for a strong economy is rooted in culture, and so, tries to expand interactions through what it calls "innovative economy" as opposed to what is conventionally known as the economy.

"Innovative economy encompasses 14 fields. These are art, architecture and design, handicrafts, advertisement, apparel and fashion, film, TV and radio, performing arts, photography, sports, education, software and computer services," he said.

"The products of innovative economy have two main characteristics. First, their value added is derived from the inventive and processing activities of the mind and thought, and as such are highly valuable. Second, they extract very little from and cause minimal harm to nature and are environment-friendly. In other words, innovative economy is aimed at trading and commercializing ideas."

Culture and Commerce

Founded in 1995, ECO Cultural Institute fosters understanding, convergence of interests and the rich cultural heritage of the region that dates back to thousands of years through joint activities and economic projects in various fields of art, media, education, sports, literature and philosophy.

"We are using culture and the power of mind to expand commercial interactions between the member countries. We look at it as an alternative and a backup for the economy in the common sense of the word," he said.

"ECI acts as a link for faculty members, artists, writers and poets and cultural researchers, as well as for libraries, national museums, NGOs and cultural centers in the region. It creates a network that facilitates all kinds of interactions."

Mazaheri, who is also a faculty member at Tehran University, said Iran's cultural heritage and art are among its main strengths.

Investing in innovative economy, he believes, is the only sustainable alternative to an oil-dependent economy.

"Investment in innovative economy requires trust, common activity and affinity between nations. If partnership in innovative economy is justly and scrupulously organized, the majority of people whose lives depend on cultural activities will volunteer in larger social and economic schemes that will not only help expand their own businesses but will also result in increased wellbeing of nations," he said.

"This is what we try to pave the way for in ECI. We have the capacity for this to happen in Iran. Through innovative economy, we and all other member states can pursue our national interests."

Mazaheri stressed that one of the main goals pursued by ECO is the establishment of ECO Free Trade Zone, which will act as Asia's main commercial hub.

After the Nuclear Deal

After the nuclear deal between Iran and world powers was implemented in Jan. 2016, "we find it easier to pursue our goals, including the expansion of cooperation in the fields of transit (the International North-South Transit Corridor), finance and banking, science and technology, agriculture and food security, culture and tourism, environment and battling natural disasters, all of which were discussed in the 13 ECO seminars that took place back in March", Mazaheri said.

"Iran pursues other goals on top of the ones that are commonly sought after by the member countries," he said. These mostly target internal economic matters as well as inter-regional ones and include elimination of hurdles in the way of free trade, doing away with the policies thwarting the country's integration into the global economy, promotion of privatization, reforming tariff policies, developing rail and road transportation, removing visa problems, fortifying relations between Iran and regional nations through expansion of tourism and battling extremism and violence.

"We are currently in talks and will also discuss these issues and more in the next ECO Summit, which is scheduled for next March. Our common culture in the region is our stepping stone for increasing economic interactions," he concluded.

 financialtribune.com | Zeinab Sohrabi | Business & Markets Desk

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