Exclusive Interview with ECO Secretary General

(part 1)
Monday, January 13, 2003
By M. Roshanfekr

What follows is the TEHRAN TIMES (T.T.) exclusive interview with his excellency, ECO Secretary General, Seyed Mojtaba Arastou (S.G.).

T.T. - Mr. Arastou, I thank you for arranging this meeting and considering that it is now a few months since you assumed office of secretary general of ECO, could you please tell me what your feelings were when you first stepped into office and the sort of issues you were confronted with? S.G. - I was always in touch with issues relating to ECO, either directly or indirectly, after the revolution. This was due to the fact that when I was in charge of the 'Asia and the Oceanic Office' of the Iranian Foreign Ministry I was involved in planning arrangements to transform the Regional Cooperation Development organization into ECO.

In 1374 (started March 20, 1995), as head of the office, I oversaw the implementation of enlargement of ECO from the three countries (Iran, Pakistan, and Turkey) to ten. At the time of the Izmir Treaty, I was involved in discussions to formulate the new laws and regulations for ECO.

This was at a time when Shemshad Ahmad was secretary general of ECO.

Upon the recommendation of the Islamic Republic of Iran, the foreign minister, and deputies from the Ministry's International Economic Affairs Office, to whom I extend my gratitude, I was recommended to the foreign ministers of ECO member nations to assume the position of the secretary general of ECO which was consequently approved.

Therefore, I was pretty involved with matters relating to ECO and even dreaming about it in my sleep. In the inaugural session on the first day of assuming office, I reiterated that I was once again happy to join the ECO family and its activities.

Detailed information about ECO activities and the related problems were already in my possession. I shared my views on required new approaches, in my earlier meetings with the ambassadors of ECO member nations and secretariat staff.

I underlined four areas in which ECO could concentrate its activities. The first is to familiarize the world community and member nations with ECO's aims and objectives. Second, ECO must extend the sphere of its activities. Third, it has to implement the decisions and procedures that have been ratified for some years by members, at the heads of state and ministerial levels. And fourth, ECO must establish a mechanism to follow progress in these areas. I hope to be able to report a lot of progress on these fronts that I announced on the first day, considering the efforts of the past few months and the holding of the 7th ministerial meeting.

T.T.- Prior to this position, you held several other posts in the Foreign Ministry. You were Iran's permanent representative in the United Nations based in Vienna and Switzerland. So it seems as though you are the person who appreciates diplomacy and the inherent burden it carries.

ECO, by its very nature, being a regional economic cooperation organization, encompasses nations with different economic systems and stages of development in each and every one of them. Iran, for example, is indeed very rich in energy resources, a point echoed by Iranian officials and shared by the international community as well.

This is the reason why the European Union shows a lot of interest to cooperate in the energy sector with Iran, seeking to establish energy security for its members by diversifying sources of supply.

Energy is also one of the priority issues in ECO which could mean Iran may have to share a greater burden in this respect.

At the same time, the majority of ECO member nations joining in 1992 are still experiencing a process of systematic change to restructure their economies, which may take many more years to achieve targets. Despite rich resources, Iran is also in the midst of reforms to make its economy more efficient. Iran, Turkey and Pakistan were the founders of ECO and GDP figures point to Turkey being more economically advanced than Iran in spite of its high inflation rates.

Would this be interpreted as a one way transfer of wealth and resources from the richer member countries to the less fortunate ones in ECO, or would members share equally from the gains of their regional cooperation? As far as the Iranian national interest is concerned, would Iran have to play a donor role only, or would she as well benefit from the regional cooperation? A vivid example is the reconstruction of Afghanistan, albeit the moral and professional duty on the part of ECO to do so.

S.G.- There are a few requisites in the formation of regional cooperation among nations, one of which is the will of those nations to participate in the first place. Once this cooperation takes off with an economic thinking behind it, member nations should employ a proper attitude in this regard. This means that they should adopt a regional approach in planning their domestic economic development.

Considering that ECO initially comprised Iran, Pakistan, and Turkey and consequently enlarged into ten countries in 1992, witnessing its tenth year of enlargement this year, different stages of economic development prevail in these nations.

The newly independent countries of Central Asia are now experiencing independence after the fall of the Soviet Union. This includes Azerbaijan and Afghanistan, which you also referred to their existing problems, requiring both initial aid and economic restructuring support.

Now, if the participating nations wish to concentrate on their own national self-interests, the organization cannot move forward. Therefore, they must think about regional cooperation and decide what measures to take to bring this cooperation closer to themselves that could lead to stability and peace in the region. So despite the prevailing stages of economic growth and development among regional nations, when they participate in joint cooperation they must, to a certain extent, move in tandem with the rest to help cooperation in the region.

ECO enjoys an economic foundation and sets its priorities in line with the domestic and regional needs, such as the issue of energy you mentioned.

Energy is one of the six priority areas of ECO.

Others comprise transportation and communication, trade and investment, industry, agriculture, environment, and energy.

When you consider the six areas, you will notice that once they are included on the agenda for regional cooperation, inevitably economic development in individual nations would be affected.

For example, if we decided to fully cooperate in agriculture within ECO, it would have a bearing upon the agriculture sector in Tajikistan, Afghanistan, and others. It must be added that in comparing ECO with other regional organizations and considering that divergences do exist in member's economies as you pointed to earlier on, it is because of national and political will that nations with stronger economies would be willing to adapt themselves with the rest to a certain degree.

Regional, cultural, and humanitarian issues play an important part. This is why ECO nations, despite their divergent economies and problems, unanimously take part in the reconstruction of Afghanistan.

Energy being one of the priority areas of ECO, convenes its forums at the Ministerial level, the first one of which took place in Islamabad, Pakistan and the second meeting is scheduled for January 2003 in Tehran. We currently possess a plan of action in energy which has been implemented since the first meeting.

Energy is one of the priority sectors where all members agree on close cooperation. Training programs and information sharing are areas of cooperation that have so far been identified. I hope that in the second energy meeting in Tehran, energy ministers will be able to explore further mechanisms to cooperate in this respect. ECO is also cooperating closely with international organizations in energy matters. The International Development Bank (IDB) has already undertaken initial studies in three energy sector projects, one in an oil and gas pipeline, and two in power.

Members already emphasized the energy issue in the ECO Heads of State Meeting in Istanbul. We hope to achieve positive results by submitting the agenda, which is going to be prepared soon, in the forthcoming ECO Heads of State Meeting on energy in Tehran.

T.T.- One of the objectives you specified when you first assumed office, was to develop and improve the ECO Secretariat. This may imply the existence of certain problems or inefficiencies. If so, have you been able to carry them out? S.G.- Yes, I can definitely say that I have. There were not too many problems as such, but one that I identified even before taking office was that the ECO secretariat should be in greater touch with member countries. This way its performance would improve and the international community's awareness about ECO would increase.

Because of this, we performed certain tasks one of which was to speed up exchange of information and documentation between the secretariat and member countries. The other, which I personally think is the most important issue, is that ECO should be considered as a data bank for member nations as well as international organizations.

This is why we are at present establishing a data network with the help of the United Nations which, I think two or three of its stages have already been implemented. Once this data bank contains all the relevant information on member countries, it can be used by all concerned. It was what was missing from the secretariat's record keeping office which now exists.

All of the secretariat documentation is now produced following guidelines adopted by the UN, which was also endorsed by ECO member nations when I proposed it. Considering that members provide personnel and the amount of resources owned by various departments, I myself, ECO members, resident foreign embassies and international organizations all point to the fact that performance of the secretariat is improving. It is appropriate here to really thank all the secretariat staff for their round the clock work echoed by members too.

Another important item is the ECO bulletin that is dispatched to between 500 and 600 organizations and international institutions. I also proposed yet another communication system whereby all ECO activities would be communicated to members' embassies throughout the world. This means for instance that the ambassador of the Islamic Republic of Iran in Germany would become aware of what ECO is doing. The result is that members' ambassadors would be able to discuss ECO activities in their meetings with host countries' officials throughout the world.

T.T.- I wish to discuss with you the level of economic cooperation among members which you outlined in general.

Since the main trust of cooperation is economic development, it is interesting to note that by the time we come to appreciate and adopt a certain mechanism within a particular sphere, which may take ten to fifteen years to adopt and then feel comfortable with it, an organization like WTO, say, with over 140 members comes along with a different agenda and possibly pose a new challenge to what we already planned and experienced. Our measures may no longer be effective and in harmony with the new challenges.

It is true that the majority of ECO countries are either members of WTO or have proposed to join.

Turkey has applied to become EU member as well.

Trading blocks in various parts of the world despite the political will of the participating nations, employ specific economic and trade models. As far as ECO member nations are concerned, they also wish to pursue, refine, and achieve the goals they set out in the beginning.

But when we observe that the same member nations comprising ECO are participating in other regional or global organizations, it is curious to know if they are confronted with conflicting challenges and priorities. Could their political and economic priorities diminish their commitment toward ECO? Could they come to the conclusion that partnerships other than ECO are more beneficial to them? This may encourage some members to attach less importance to ECO obligations, MOUs, and summits possibly leading to gradual indifference toward ECO objectives in the long run.

I would like to know what you personally think and conclude about such a scenario considering discussions you may already have had with ECO officials in this respect.

S.G.- Economic development is again one of the important goals of ECO. I can tell you that we have gained valuable experience so far. One of ECO's plus points is that it has been able to adapt itself with current global activities and its debates are focused on this issue.

Member officials stress that steps toward economic development within ECO affect their WTO initiatives in a positive manner. ECO has an observer status in WTO, participates in all the meetings, and passes its documentation to ECO members. For instance, harmonizing the rules and regulations in customs affairs by the reduction or elimination of tariffs, which is another priority area and an agreement is due to be signed in 2003, is exactly within the framework of WTO.

We have neither lost the opportunity nor ignored this issue. In the second ECO Heads of Customs meeting to harmonize regulations, the WTO and World Customs Organization had participated.

Objectives were again in line with the WTO framework.

However, we can pause to a certain extent on the question of how successful we have been in harmonizing the rules and regulations between ECO members. This is related to the economic structure of ECO states. Perhaps some members overtake others in achieving harmonization. But ECO has given members the opportunity to adapt themselves accordingly.

We have to give more time to Central Asian members to harmonize their rules and regulations, since they employ a rather different set of rules than what we are proposing. For example, ECO has already convened four study sessions on trade tariff rules and the fifth one is to be held here, before the ministers' meeting. This is only due to the fact that some ECO members need more time to implement the new regulations within their economic development policies.

Another example is granting more time to Afghanistan. We can not say that members can adopt these rules immediately. The problem is, these are international regulations. One of the objectives of regional cooperation, however, is to give members time to adapt themselves with the new regulations.

I can boldly say that the trade agreement to be signed among members in the forthcoming Second Trade Meeting in July 2003, is the right move in economic cooperation which also complies with their bilateral or multilateral cooperation decisions.

T.T.- I very much appreciate it but explanations usually raise more questions.

This is what I conclude from your comments: due to the fact that the framework of cooperation within ECO is based on global modes of regionalism, it does not contradict WTO or similar international organization norms or principles. In addition member countries may also be able to participate in WTO with greater ease, albeit with some minor adjustments.

The other conclusion as you also mentioned, is that the apparent divergence between ECO members' economies necessitates adequate time provisions.

S.G.- Our role is solely to reduce the time required for adjustments. The secretariat and myself as general secretary try to speed up the process of implementing ECO's ideas on par with global trends, by gathering data for member countries as well as following them up. The more bilateral discussions and cooperation among members within the framework of ECO, the less time required implementing policies. We aim to reduce time, in order not to be left behind global competition.

T.T.- You recently attended the Istanbul Summit discussing privatization. This issue attracts a lot of attention in Iran and our officials are unanimous in declaring that privatization objectives have not been realized.

There is also a consensus that the Iranian economy is planned and the private sector is not as dynamic as it should be, with various explanations for its failure offered by officials and experts.

This is despite efforts to promote and encourage the private sector in the countries in the region, for cooperation among themselves.

It seems that the Central Asian members of ECO are short of hard currency and mainly rely on foreign direct investment and loans to complete their transition period, albeit with possible negative repercussions. The Iranian Foreign Ministry, for example, devised a triangular method of trade with these countries to shortcut the hard currency deficiency.

There is not a watertight method to overcome these problems but efforts have been directed toward breaking the impasse. Talking to the private sector reveals how discouraged they are. They complain about red tape, multiple tariffs, and taxes. Hopefully, officials would respond to their concerns and try to promote the private sector by passing appropriate laws.

My reasoning so far is to scrutinize the required time frame for reaching stated ECO objectives, since the major drawback in implementing interesting ideas usually takes a lot of time.

To put it all together, first reasonably efficient private sector must be promoted in member countries to be able to work together. Second considering that such a minimum does not exist at present, substantial efforts must be directed toward laying the proper foundation, which requires time. Third, members need time to converge their economies together.

To cite an example, a brief look at the formation of the European Union can be very educational.

Members realized that the economic powerhouse within Europe was Germany and consequently it became the leader in terms of setting economic targets for participating members leading to full monetary union. Although this did not happen overnight and there was a lot of friction as well as negotiations taking place.

The invaluable experience of EU thus exists. The last ten years in particular, was extremely challenging to them not mentioning their consistent efforts of the past decades.

ECO is obviously far behind despite aiming for a different agenda. If it took EU so long to achieve their aims, it would definitely take longer for ECO considering the above arguments. Cooperation within the framework of ECO leading to the objectives of peace and stability which you referred to, as well as achieving sustainable development, strengthening of historical and cultural ties, etc. is the ultimate purpose.

Also the trouble is that advanced countries and in particular the United States, are trying to tilt global integration into a direction to serve their own purpose. As far as this region is concerned, it entails getting close to ECO members by engaging in bilateral economic discussions. They conclude various agreements in industrial cooperation and technology transfer, undertake joint venture projects, and especially invest in energy sectors of the Caspian Sea littoral states.

These attempts are obviously designed to establish their presence in the region, hoping to take advantage of the hard currency shortages so desperately needed for investment purposes in these nations and making them dependent.

Inevitably, economic cooperation within ECO may be effectively severed or assume a lesser degree of importance.

If we suppose that rich nations have come to the conclusion that to protect themselves, they need to have a hold on world's resources and the rest have to follow issued decrees and what is dictated to them in modern disguise, ECO activities must be pursued with renewed vigor. This coupled with rich resources of ECO nations and a population of over 350 million again indicates a much more difficult task ahead, such as making the private sector and industrial cooperation efficient within the region.

What is your reflection on this? S.G.- First I must say that whatever cooperation between the ten members within the framework of ECO, say in trade, transportation, industry, and energy takes place they would have a profound effect on member countries economic development.

We consider bilateral cooperation by members as a vital factor. For instance, the more Iran cooperates with Turkey, or Pakistan, or other ECO nations, the more regional cooperation will be strengthened. Second the mechanisms that have had an effect on promoting regional cooperation since a few years ago, again one of the strong points, is the growth in bilateral as well as multilateral private sector cooperation within ECO. Those members with experience in economic development have helped others to embark on adoption of new policies.

One of these was the Business Forum on the sidelines of the heads of state summit meeting in Istanbul. ECO welcomes such forums and we should hold them in all member countries. This was one of the steps taken by the ECO secretariat within the last few months that I took up my position. It was a joint project between ECO, ITC (the headquarters of which is located in Geneva), with the help of UNDP.

Before the above business forum, another meeting (joint project with ITC) for textile buyers and sellers was held. Around eighty large businesses from the region together with the private and public sector participated in this meeting. The private sector expressed its points of view and discussed problems, whereas government representatives proposed new mechanisms and solutions to help the private sector.

This is a very positive development and we can now observe the contribution it makes in bilateral cooperation of ECO members. The statistics is available in ECO annual reports and I may in fact provide them on ECO Day, to see how the rising trend is continuing.

Should member countries' private sectors get together on various issues and trade the related commodities, trade in general would develop further. Also it is intended to establish an annual business forum whereby trade in different specialist fields among buyers and producers can be analyzed.

When the first business forum report was submitted to the Istanbul meeting, the heads of member nations stressed upon the General Secretary and ECO Secretariat to organize such forums on an annual basis. This is an indication that all members believe mobilizing the private sector to participate in ECO is the key and cure of economic development.

T.T.- Talking to the private sector, particularly in Iran, reveals their disappointment over various impediments they have to deal with. Hopefully practical steps taken by officials would solve the problems.

But considering your comments about ECO initiatives in this respect, it seems that the minimum requirement for the private sector is to be present in such forums. Better still, officials must also show their commitment that they are serious in rectifying bottlenecks standing in the way of the private sector participation, since it is in the interest of ECO at large.

However, the two camps confront one another, the private sector expecting fulfillment of its needs and civil servants promising action. Hence, the question of implementation is raised here.

Studying the trade figures supplied by ECO secretariat indicate that members with weaker economies such as Tajikistan, enjoy an intra-trade figure of between 20 to 30 percent with other members, whereas those with stronger economies like Iran and Turkey trade around 3 to 4 percent with the rest.

Apparently there exists a great imbalance in trade among members and officials from other ECO countries have also emphasized on increased trade.

The 3 to 4 percent figure is definitely not what intra-trade among ECO is all about.

What comes to mind is that when the private sector announces its readiness as well as state officials promising help, there should be an effective implementation procedure to achieve results.

Although there is a timetable for scheduled ECO events such as forums and meetings to follow up decisions, but what is really there to act as performance guarantee? When a positive thought is provoked and welcomed by all parties involved, it only produces results when wholeheartedly applied in practice.

S.G.- Yes, I would like to confide in you a little for the very good question you asked. In a regional cooperation between nations, at the sovereign level, the first aim that ought to be considered is how to make use of such cooperation.

There are four regional cooperation organizations in Asia namely ECO, SAARC, South Pacific Forum, and ASEAN that get together as well as their secretary generals every year, organized by UN-ESCAP. Seven such meetings have already taken place and I proposed the eight to be held in Iran, which is due to take place in August 2003.

In the seventh meeting of the secretary-generals recently held in Bali, I submitted a paper titled 'Public Participation in the Regional Cooperation' which was very well received. It was meant to say that people from the participating nations must be present in these initiatives. The goals which the organizations have been setup for must be made known to their general public.

This may take the form of meetings and use of data banks or libraries. But in some way or other people must become aware of the activities. For this reason one of my other aims has been to increase the publicity about ECO. For example if awareness about ECO is promoted among the people of Tajikistan or Turkmenistan, these people could comprise either the private or the public sector.

They may thus be enthused to find out what the regional organization of which Tajikistan or Turkmenistan is member of can do, leading to increased contact between the secretariat and the people of that country. We are currently in the process of gathering data to see how much people, companies, and organizations are in touch with ECO.

We must arrange round tables at the university level with certain topics of discussion. When I expressed this in Bali which was warmly welcomed, the secretary general of ASEAN said that I mentioned an interesting point. If you wish to compare yourself with ASEAN you should hasten the pace, he remarked. He said that they confronted the same issues during the first seven to ten years of their formation.

He showed me examples of people who promote the publicity of ASEAN. For instance, I saw a card of an insurance salesman who would insure your car with ASEAN insurance. I have his card here with me. This I think indicates one of the practical steps for public participation among members in a regional cooperation.

The point about the slow pace or even fading away of activities could be prevented, should we establish ECO as a data bank for ECO members so as to be informed of each others resources and potentials.

With respect to low intra-trade figures that you referred to it is partly because members are still not aware of each other's potentials. In the First ECO Ministerial Meeting on Agriculture that I attended in Islamabad as secretary general, we distributed an agriculture resource booklet on members every time there was a discussion on agriculture produce.

The agriculture ministers were saying that we do not possess this sort of information about each other. They stated that should this data be available, we would rather buy these products domestically within ECO, if available, than outside. I personally think the most important thing is compiling member's trade data. This enables others to know for instance what Iran needs and what it can export, similarly Tajikistan, and so on.

As far as the private sector is concerned, ECO is becoming a channel to follow up discussions with the public sector concerning required regulation.

We are also proceeding with the setting up of a mechanism in the secretariat to be able to pursue the points and views expressed by member countries, which we hope to produce results.

To summarize then, the three tools comprising first publicity to increase people's participation in ECO activities, second data banks, and third the mechanism to follow up members points of view would hopefully ensure implementation of the decisions taken so far.

At present, our trade division in the Business Forum has categorized the type of activities and initiatives both the private and public sector should undertake. They would be implemented using workshops and/or memoranda of understanding. God willing, these initiatives would bear fruit.

T.T.- It seems from your own conclusion that ECO can act as a catalyst, to encourage members in pursuing economic policies and decisions taken already, to develop their private sectors.

I would recommend to you that ECO may actually be able to play the role that mainly Germany and France did for EU countries to converge their economies and secure stated goals. This way, ECO member officials can adopt those sets of principles and policies which promote ECO and reduce time for achieving objectives. Have you ever had the opportunity to propose this idea to the Iranian officials? S.G.- The follow up procedure I referred to earlier on together with the ministerial meetings at the foreign ministers level, all emphasize participation of the private sector in ECO activities. The ECO secretariat also pursues these issues with member countries.

I am certain that the annual ECO ministerial meetings, the ambassadors' sessions in the so-called 'Council of Permanent Representatives' held here monthly in the secretariat, and submission of monthly reports on decisions taken for members to consider, would all lead to greater participation.

Of course ECO members recognize the secretariat as a facilitator. For example matters relating to the reconstruction of Afghanistan was delegated to the secretariat for which a separate committee was set up. I submitted its first report in the 7th ECO Summit Meeting.

This is the mechanism you proposed. Considering the will of member nations, I hope that implementing decisions one of which is the participation of the private sector, becomes a monthly forum to explore further initiatives in its support.

T.T.- I hope to be able to partly take responsibility for ECO publicity. At this stage, I must bring up the issues of subsidies and banking sector and their relevance to the private sector here in Iran.

We seem to be suffering from the banking system for some time now. In occasions which I had the opportunity to discuss various topics with officials, I have made the point that journalists job entails close contact with people from different walks of life.

Officials have repeatedly mentioned the strain that subsidies put on the general economy. They keep telling people through the media that price for certain goods and services they receive are much lower than international prices paid for them, which is unacceptable. There is a constant highlighting of prices and global costs of such goods and services.

I remind those officials that one of the main and very important objectives of the Islamic Revolution of Iran, has been the eradication of poverty and class difference as well as establishing social security for all. This goal among others has been the slogan of Iran since the beginning of revolution and thus an accepted principle.

It is also a well-known fact that people's purchasing power is low in Iran. On this basis, when drawbacks of subsidies are discussed and price comparisons are emphasized, it would be fair to underline average incomes in other oil producing Persian Gulf states as well.

For example if we take an above average income of say 1,200,000 rials in Iran and compare it with the same average in other Persian Gulf countries, we would probably notice a ten times difference in pay i.e. an equivalent of 12,000,000 in rials.

Now, should the latter be considered as Iranian's income, it would then be fair to get rid of or lower subsidies substantially, such as offering gasoline at 2,000 rials a liter or even more.

The banking sector in developed and developing nations provides all sorts of mortgages and loans to cater for individuals needs. In other words it furnishes them with the purchasing power to practically buy whatever they require, e.g. house, furniture, car, electrical goods, holidays, and etc. The list seems endless.

I am sure you witnessed this matter during your stay in Europe, which effectively leads to public comfort and empowers people to buy whatever they wish that would otherwise be almost impossible.

If we now look at regional cooperation from this perspective, in various groupings such as EU, ASEAN, and others it is the combination of efficient banking and financial sectors that solidifies attempts to achieve planned targets.

In Iran we are faced with inefficient state banking and financial sectors. We have just started to ask serious questions about privatization including the presence of private banks and to very limited extent foreign banks. It may thus be a good first step to invite ECO members' banks to set up branches and start operations here.

The way business is conducted at this day and age does not simply comprise trade in goods. It involves relocation and joint investment in other countries as well. A businessman with limited capital but an excellent business idea, who cannot compete with others, may want to move into Tajikistan or vice versa.

This is where the banking sector should come to his rescue. In countries with strong banking and efficient financial markets, investment funds to support good business initiatives are offered by banks in return for small collateral provided by the entrepreneur. Most private business success stories and fortunes made, has been the result of support provided by the banks and financial institutions in the first place.

Iran and perhaps other ECO members lack such efficient banking and financial markets, so vital to private business health and economic output. It thus seems that intra-trade among nations can benefit enormously from strong capital and financial markets, which I propose to you for debate in ECO. IDB you mentioned earlier has undertaken a research role so far. I would like to seek your views on this proposal.

S.G.- We hope to establish the Development Bank of ECO soon. The agreement to set up the bank was signed between Iran, Turkey, and Pakistan that is now going through its final stages. The headquarters of the bank would be in Istanbul, Turkey and the three members would provide its capital. The objectives and procedures are specified aiming to develop trade and increase investments.

The issue of subsidies and its implementation in every member country needs comprehensive study.

The monetary and financial policies of the member nations must also be considered.

Before trade and investment issues are examined, whether the public or private sector wants to invest on certain projects, other matters must be considered. One of them is banking regulations and another pertains to issues facing the private and public sectors.

But what really needs stressing is the fact that financial resources are extremely important in ECO countries, which must not be overlooked. The financial capability of each member is different compared with others. Should banks come forward and offer loans we must know what we are investing in and what is to be gained from it.

In developed nations the banking and financial sector knows where to invest, what the return is going to be, and whether the loan together with the type of project undertaken would make it profitable. This again is one of the issues that ECO nations must evaluate and study. In the event the private sector of a member nation decides to invest in another with the help of a bank, it should be aware of the parameters involved and know if the investment is to be viable or not.

Thus it is imperative to obtain data in this respect for use by members, which we are currently pursuing in the trade and investment division.

However as you said, members should adopt new financial policies. How banking regulations can be harmonized within the framework of ECO is an issue requiring comprehensive studies, which again is being considered in the trade and investment division.

For your information, we are hoping to establish the Development Bank of ECO soon with capital provided by the three countries, which can act as an impetus for the presence of the private sector in trade or investment matters.

T.T.- As an Iranian I wish you success in your endeavors and as a person, who belongs to the press family, I offer my thanks to you on behalf of TEHRAN TIMES for this frank discussion and hope to be able to contribute more toward your publicity efforts.

S.G.- I thank you very much too. As you mentioned, I think that our publicity efforts with respect to issues concerning Iran, hosting the ECO secretariat, must be strengthened. We particularly extend our appreciation to TEHRAN TIMES, as we have noticed that it has played a very positive role in reflecting ECO activities.

But before ending our discussion there are a few things that I have to mention. What is important to this regional cooperation organization is its role in the world community. There is a fierce global competition between regional organizations and ECO members stress that they do not wish to be left behind.

For this reason, members emphasize that ECO must make its activities known to the international community more than before. I think ECO has gained proper support by including this recognition within the agenda of its members' ministers and officials.

Another competition between regional organizations is attracting funds from international institutions. ECO has done well in this respect too. One of my other aims when I assumed office was to expand the cooperation of ECO with international organizations. We have been able to attract considerable sums of money toward a lot of projects that are now being implemented in member countries.

We signed various agreements with the United Nations such as the one we concluded with FAO secretary general here toward agricultural projects in ECO member nations, as well as the two-phase project to deal with the drug problem.

We have completed the first phase so far and the second started in December sponsored by UNDP and EU.

I am inclined to think that the more we secure our relations with the international institutions, the more it will benefit our regional cooperation in ECO. Next, attraction of funds would lead to the implementation of projects within ECO.

I would like to add that ECO is moving in a direction that has already been recognized by the global community. We also enjoy close cooperation with the United Nations, which can pave the way for the execution of projects in member countries considering their inherent economic problems.

T.T.- Thank you for highlighting the main issue here, which is to attract needed funds from the global institutions. This is despite the fact that members have financial obligation toward ECO too.

Member country officials may also feel more committed in offering ECO more funds to bridge the implementation gap and hasten the pace to reach stated objectives.

I will be following the events and wish you all the best.

S.G.- Thank you very much.

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