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Iran starts up the high-tech
ladder
By Hooman Peimani
In a bid
to expand its high-tech industries, Iran has announced a
plan to turn itself into the second-largest producer of
blank CDs and DVDs - after Taiwan - by 2005. While blank
disc production is hardly a pathbreaking industry, added
to various projects including personal computer
production and software development by its public and
private sectors, it reflects Tehran's desire to expand
into technology partly for economic reasons and partly
consolidate its self-sufficiency to withstand economic
sanctions.
The Iranian state news agency IRNA on
July 6 quoted an unnamed manager of Iran's Optical Disk
Production Company (ODPC) who described a three-phase
production plan to turn the country into a major
international player in the production and the export of
CDs and DVDs, with the first phase to begin in late
summer and followed by the second and third phases in
late spring 2004 and early 2005, respectively.
The project, the manager said, is to be a joint
venture with Schitag Homatech, Germany's biggest
producer of optical disks and the provider of the
requisite technology. The ODPC is now seeking investment
and to secure markets for its products, which, if
everything goes as planned, will hit the market in a few
weeks. Thus, according to the manager, "negotiations for
direct investment in the production and ordering of the
product[s] are currently underway with major world
owners of CD technology, which are to present them in
the world markets under their own brand name".
Iran annually imports 55 million blank CDs and
DVDS, a situation the OPDC plans to reverse - not only
by ending Iran's dependency on imported items, but also
by turning the country into a major exporter with an
anticipated annual export value of US$380 million, the
manager said. The ODPC manager did not specify whether
this would be the expected revenue for the first phase
or for the third, when the company will operate at full
capacity.
Added to Japan as the world second
largest economy and the house of high-tech inventions,
most Southeast Asian countries have come to dominate
much of the high-tech international market, particularly
in consumer goods. Thanks to years of investment and
planning, countries like South Korea, Taiwan and
Singapore have turned themselves into major players in
certain high-tech fields such as semiconductors and
cellular phones, while countries such as China are fast
catching up.
However, unlike the Southeast Asian
countries, the West Asian states including Iran have not
been very successful. The government regards high-tech
industries as essential for economic and technological
advancement, while preserving Iran's independence.
Unlike many Middle Eastern countries, Iran has a
relatively well-developed industrial sector. However, it
lags the Southeast Asian states even though the Iranians
began certain high-tech industries (eg, electronics and
telecommunications) in the late 1950s.
Recognizing the importance of high-tech
industries for economic advancement and growing domestic
needs, the Iranian public and private sectors invested
in telecommunications, electronics and computers in the
1990s to expand their operating units and to establish
new facilities, especially in those areas in which they
had no prior experience. This was part of the
reconstruction program following the Iran-Iraq War,
which lasted from 1980 to 1988 and cost millions of
lives. The reconstruction program continues to this
date. The computer industry, which emerged in the 1990s,
is a successful example both in hardware and software
streams. Its PC production increased from 80,000 in 1998
to about 150,000 in 2002.
However, despite its large
number of manufacturing units (about 1,100 in 1998), the
Iranian tech sector is significantly less advanced than
those of South Korea and Taiwan, for instance. This is
notwithstanding the fact that Iran is a producer of
various high-tech products, including a wide range of
telecommunications devices - telephone sets, cellular
phones, digital telephone systems and fiber-optic
terminals - and solar energy equipment.
Western
economic sanctions and restrictions have played a major
role in Iran's lack of progress. Recognition of this has
been a major factor in the Iranian private and public
sectors' efforts to embark on high-tech projects. The
Iranians' plan to diversify their exports to decrease
their heavy reliance on oil exports is another major
incentive to invest in the high-tech industry, apart
from satisfying the growing domestic need for its
products for civilian and non-civilian purposes. Because
of the sanctions, many products cannot be imported or
their imports are subject to unacceptable political
demands.
The CD/DVD project should be analyzed
in the mentioned context. In addition to meeting
internal demand, it has a very ambitious target -
turning Iran into the second largest CD and DVD producer
within a very short time frame as stated by the ODPC
manager, who expects this to happen "once the project is
put into full operation". Provided they pull it off,
Iran will emerge as a major competitor to Taiwan, which
now reportedly produced 90 percent of the world market.
While the July 6 announcement is important on
its own, perhaps, it is even more important in
demonstrating two necessary trends in the Iranian
economy. These are investing in mainly neglected
industries and going beyond an import-substitution
strategy in economic development as reflected in the
CD/DVD project's ambitious export target. The economy is
now growing at 7.3 percent annually excluding its oil
industry. That is a significant but still not adequate
rate given the severe damage of the Iran-Iraq War, rapid
population growth and years of negligible growth.
Dr Hooman Peimani works as an
independent consultant with international organizations
in Geneva and does research in international
relations.
(Copyright 2003 Asia Times Online
Co, Ltd. All rights reserved. Please contact content@atimes.com
for information on our sales and syndication policies.)
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