Dear Dr. Esmaeil Gharib Madam, born in 1345 in Bojnourd, economist, former representative of the people of Bojnourd in the Islamic Consultative Assembly and spokesperson for the National Confidence Party.

The peace line has discussed the attention of lawmakers to development programs in border areas, the level of implementation of such programs, the lack of development in free zones such as Chabahar Free Zone and the phenomenon of large-scale smuggling in the country, with Ismail Ghami Moghadam.

In this conversation, he talks about the lack of development in the Chabahar free zone and emphasizes that its potential for growth is being wasted. He says, “Governors and commanders could have attracted facilities to Chabahar to compensate for the population vacuum, but unfortunately such actions have not been taken seriously by any government.”

Dear guests, in addition to restrictions, prohibitions, and tariffs imposed by parliament members for importing goods, it is considered one of the most important factors that provide the grounds for smuggling of those goods…

Dear respected sir, how much attention did lawmakers pay to development programs in border areas, especially during the time when you were also present in parliament?

Most representatives of the parliament have a development-oriented view towards border regions, but they see it more in annual budgets and short, medium, and long-term plans. In the short term, the issue of planning is raised, which was properly addressed in the sixth and fifth parliament, and in the medium-term plans, which were focused on development in the first, third, and fourth plans, a policy was formulated to achieve a balance of development. That is, policymakers in the plans and budgets from 1989, when the first plan was implemented, to the third plan, which reached the seventh parliament, and I was also present in the parliament at that time, we can say that they implemented one of the most successful executive plans after the revolution, because annual budgets were allocated with a focus on medium-term goals to different regions.

But the question that is being raised here is, to what extent have these programs been implemented? Was there any obstacle to the implementation of such programs?

Okay, the third development plan was actually implemented. This plan has been executed very well, with over eighty percent completion. For example, in the development of rural roads, asphalt paving, or addressing the agricultural situation in border villages and cities, we have never paid this much attention before. But the reason it wasn’t very tangible is that the poverty in our border areas is so deep that it cannot be brought to an acceptable level of development with just two or three plans. However, progress has been made in this direction; for example, in regards to petrochemical plants that were built in various regions, including Ilam, North Khorasan, and border areas like Kurdistan, acceptable steps were taken. But with the fourth plan, one year after its implementation, the seventh parliament came and changed the plan, making fundamental changes to it. These changes may not be that important – although we were against them – but the reality was that a government had come to power that fundamentally did not believe in

As you are aware, the Chabahar Free Zone was established in 1993 by the decision of the Islamic Consultative Assembly, along with Kish and Qeshm. However, this region is still underdeveloped and lagging behind Kish and Qeshm, to the extent that it does not even have an airport. How do you evaluate this situation?

Free zones, based on existing programs, were supposed to have balanced development, but the reality is that their potentials, such as weather conditions and various transportation routes, have been effective in their growth; ports like Imam Khomeini Port and Bandar Abbas, due to the number of docks and access to population density, had enough potential and capacity for growth and development, but a free zone like Chabahar does not have facilities such as population density.

All of these things that I mentioned, are reasons that exist, but we cannot say they are definite reasons and we can also mention the lack of executive management. In any case, governors and commanders could have attracted facilities in Chabahar to compensate for the population vacuum, but unfortunately such actions have not been taken seriously in any government. However, to the extent that I am aware, efforts were made in the Khatami government in this regard and attention was paid to the infrastructure of that region, but the reality is that it was not enough and it did not continue. Now Chabahar remains the same as before, but you can see that free zones like Kish and Qeshm, which you mentioned as an example, were closed for four to five years during the Ahmadinejad government and activities there suffered a severe decline; both in construction, exports and imports, and tourism.

In your opinion, do you think that the smuggling of large goods in that area and the abundant profits gained from it for certain groups can be considered one of the reasons why development should not take place there?

I don’t think this way, in my opinion, the development of free zones is not an obstacle for the profits of smugglers. Those who engage in smuggling are powerful groups that operate outside the government, and such groups that have the power of smuggling, essentially do their own work and this issue does not affect their activities. Factors that affect the development or lack of development of free zones are numerous issues such as political issues or foreign relations.

Smuggling has multiple and various reasons. Researchers have identified more than 15 main reasons that cause smuggling in any country. One of these reasons is the demand for that product in that country. When there is a demand for a product, traders and merchants try to bring the product to the consumers for profit. The second factor is extensive advertising. Extensive advertising by media or companies leads to a renewed demand for the product. But the third reason, which actually exacerbates this deviation towards smuggling, is the issue of restrictions and prohibitions that lawmakers impose for the entry of goods, mostly related to tariffs. When the parliament, as the lawmaker, imposes a tariff of 70 to 120 percent on a product, it creates a problem for the two previous parameters that I mentioned. In fact, with this level of tariff and with such prohibitions, it is clear that products such as medicine, cosmetics, and car parts will not reach the consumer, while the market is thirsty for the consumption of such

Another reason for smuggling goods is the price disparity between domestic and foreign markets. This means that you may see a high-quality product at a low price outside the country, but the same product with lower quality is sold at a higher price domestically. For example, luxury cars are much cheaper outside the country compared to inside. Another factor is economic gaps, meaning that governments increase the price of the dollar and foreign currency to cover up their incorrect policies, leading to a currency crisis.

Why do the members of parliament, knowing this issue, still consider such high tariffs for goods that practically facilitate conditions for their smuggling?

The prosecutor’s office claims that I am doing another job and this job is also very important and the responsible person for smuggling goods should go and stop the smuggling of goods! But in any case, such laws also lead to the issue of smuggling and we cannot say that the parliament should do its job and for example, the police should go and stop the smuggling. In other words, we should not pass a law that leads to the production of crime and then say that we are not responsible for the crime.

I’ll give an example: They say that in order for our tea industry not to suffer losses in the country, it can do whatever it wants and has the right to sell its high-quality tea at any price it wants without any foreign tea being imported. Well, when you consider heavy tariffs for importing tea, it’s clear that you have created the conditions for smuggled tea to enter the country, especially since our tea industry is limited due to climatic conditions and does not have a strong foundation. You cannot set a fixed tariff for an industry of a country for 10-20 years without any changes. I remember in 1973-74, during the fourth parliament, heavy tariffs were set for importing cars and their parts to defend the domestic car industry. I myself was a supporter of domestic production in the car industry and its advantages in terms of employment, and I somewhat agreed and even helped to keep the car tariffs high so that car parts could be produced domestically. Well, this has

Does that mean you are opposed to the rates overall…?

I am not saying that we should adopt a liberal system where everything is based on free market competition, but I also don’t believe that we should impose tariffs on everything like a socialist system. In countries like Norway or Sweden, the system and tariff structure is based on a plan, model, and timeline. However, unfortunately in Iran, we do not follow such methods and instead, we implement this wrong approach which is also the root cause of corruption.

In Iran, the risk of smuggling imported goods is low and the crime is not considered very serious. The person who brings in the goods makes so much profit (according to Mr. Dana, 100% profit) that if they bring in five items, even if one of them falls into the hands of the police and another falls into the sea, it has no consequences for them. Now there are other factors such as corruption, etc.; in fact, different factors move in the same direction and with a high degree of correlation, continuously leading to each other and causing smuggling to occur.

Dear Doctor, how do you evaluate the role of security and law enforcement forces in dealing with major smugglers?

Yes, I have seen some researchers consider the weakness of law enforcement as one of the reasons for smuggling in Iran, but as an economics graduate, I do not accept this; not to say that law enforcement is doing well and strong, but this is also a reason dependent on other factors.

When smuggling goods happens in a country, and with this volume (currently annually, we have about twenty-five billion dollars of goods smuggling in Iran, which is a terrifying figure), it means that the government can help the country’s development by earning these incomes, but it remains unutilized. One of the most important issues that arises from large-scale smuggling is that government economic programs are essentially neutralized because smuggling is an unwanted and disruptive variable that enters the economic sphere. Imposing heavy financial and currency costs on the government, increasing the price of official imported goods, and disrupting the usual budget allocations that governments make for essential goods imports are among its other consequences. It also damages the competitive environment and harms domestic production, which, in my opinion, is its worst economic consequence.

These were the economic consequences of it, but smuggling ultimately produces social consequences in the country and it must be seen how far it affects the community. Smuggling of goods has an indirect but very deep and irreparable impact on society. One of the variables that triggers poverty in society is smuggling of goods, but they do not see it; it is like sitting with a noose around your neck and tightening it! Smuggling of goods indirectly creates immediate income disparities; that is, the traders who go through the legal process of paying customs taxes and importing goods through official ports, only make a small and fixed profit (around 10 or 15 percent), but the large profits go to other groups and the difference between these traders and those traders or military institutions or private institutions occurs. Well, a small and limited group of people become wealthy while these profits could have been distributed among many other traders or a group of workers in the transportation sector or other classes involved in imports. As soon as this happens,

Another point in this regard that you may have in mind, as a final note in this conversation, would you like to mention it?

Smuggling goods or any other abnormality that occurs in society has various factors, including political, economic, and social, and all institutions of society must work together to combat it. It is not enough for the parliament to say that they are thinking about tariffs, the law enforcement to say that they are thinking about cracking down on smuggling, or for political discussions such as sanctions, which are raised by the Ministry of Foreign Affairs. All of these are interconnected. This is in addition to the fact that it is necessary for all relevant agencies in the field of preventing smuggling to play their role effectively, it also requires major policy-making.

Thank you for the opportunity you have provided us with to pursue peace…