A Study on Iran's Opportunities for Trade Integration with Central Asian Countries

Due to increasing economic globalization and the need for greater global participation of countries, policy-makers and politicians throughout the world have broadly addressed the regional cooperation in the past two decades. Iran is no exception and to that end, it seeks to expand ties with central Asian countries. The economic indicators of these countries represent their relatively suitable situations in terms of population, GDP, per capita income, and social indices. So they could be suitable markets for absorbing Iran's export and supplying its needs. This paper analyzes Iran's potential and capacity for trade ties with central Asian countries with emphasis on complementary trade as well as greater trade potential. Findings of the study indicates that Iran and central Asian countries do not enjoy trade complementarity in all sectors and they have a very low degree of similarity in import from each other. Estimates suggest that Iran's export potential in trade with these countries is approximately $m 899. So it is recommended that further cooperation should be confined to certain sectors (such as industries, oil, and petrochemicals) in which Iran enjoys the required export potential and capacity.