As the Islamic Republic enters the 21st century, the Iranian economy is undergoing a new evolution as several factors converge at once: globalization, the rise of networked information technology, numbering technology and radical new ways of organizing work, all culminating in the development of a knowledge based economy. As such, Iran has implemented what can be best described as a trade facilitation 'infostructure'. The

implications and need for such a step are profound. The creation of new regional markets for trade, an expanding array of tradable commodities, larger private capital inflows and improved access to technology all result in the facilitation and tradability of goods and services and the mobility of capital. Unlike many other countries that have failed to awaken to this reality, Iran has undertaken key structural steps so as to benefit from the on-going transformation of global commerce and has become the region's pace- setter, in effect, becoming the modern day ' Silk Road' of the region's infostructure as it emerges as the main provider of the regional content to be traded via electronic means. To captur the opportunities evolving from the globalization of information technology, several ground breaking steps have been undertaken, including:

Electronic Data Interchange (EDI): Achieving efficiency in the market is a priority for any organization whether private or public, especially in light of the fact that increasing costs and competition in global trade have led to search for cost efficient techniques. One of the means by which efficiency is being successfully attained is through the use of Electronic Data Interchange (EDI). EDI is the electronic transfer via computer of commercial or administrative transactions (without human intervention or with minimal human intervention) using widely accepted standards to structure transaction or message data. Through EDI, not only can business transactions be facilitated and streamlined more quickly, but also markets can be expanded by the use of network systems with enhanced relationships between companies. It is within this context that Iran's activities in the implementation of EDI has caused it to be granted membership to the Asia EDIFACT Board-ASEB-(which has subsequently been re-named AFACT - Asian Forum for Administration, Commerce and Trade) of UN/EDIFACT (United Nations rules for Electronic Data Interchange for Administration , Commerce and Transport) the steps taken have culminated with the election of Iran to the Chair of the Organization in 1998 (see related side box further ahead in the Chapter). UN/EDIFACT was developed so as to provide a single international standard for EDI that is timely, accurate, and provides the business functionality that users require. Additionally, considerable emphasis is placed upon the need for professionally managed maintenance and development process that is responsive to the needs of users.

As a member and Chair of the AFACT Board, Iran has become an active member of a regional grouping currently undergoing significant changes. The economic indexes of the Asian / ASEAN countries despite recent difficulties have registered growth rates overshadowing those of the OECD nations leading some to predict that by the 21st Century the Asiatic region will emerge into the world's foremost physical distribution center of goods. The entry of Iran to AFACT is thus of particular significance as its geographic positioning on the east - west junction, access to important waterways such as the Persian Gulf, Caspian Sea and Sea of Oman and linkage to the former Silk Road land routes of Central Asia enable her to serve as a physical and electronic bridge between Europe and Asia.

Trade Information/BBS: BBS is the abbreviation for 'Bulletin Board System' , a
remote public access system for personal computer users. Its purpose is to provide users a means by which users can provide and access public domain software. As the demand for trade-related information has increased, a commercial BBS system was developed under the local name ' Agahgar'. The Agahgar system , in addition to providing the latest commercial information (i.e. daily commercial updates, provision of the latest rules and regulations, the latest updates from the Tehran Stock Exchange), has also been geared to serve as an electronic mail facility (e-mail to facsimile, , e-mail to telex), provide teleconferencing services as well as numerous other services. A significant aspect of the Agahgar system is its connection to other trade oriented data bases such as the Iran's Chamber of Commerce and the Export Promotion Center of Iran, Moreover, the system has so far been successful in interconnecting six of Iran's major provinces.

Trade Point: Trade Points are the local / global link for traders all over the world. Small business owners in developing countries who are unable to find trading partners in foreign countries , use the Trade Point as a gateway to the global market. The Trade point serves to match their needs with those of other traders and facilitates their trade transactions. Thus, a previously isolated small trader can become part of a network of Trade Points spanning across 100 countries utilizing modern technologies to streamline trade procedures. Trade Points serve to offer assistance to small and micro-businesses across the world in all types of trade related matters including;

1) Trade Information: A Trade Point is an effective means by which business can seek new opportunities through ETO's (Electronic Trading Opportunities) and company data bases from the 100 countries (+) linked to the Global Trade Point Network (GTPNet)
2) Insurance & Transport: Insurance and transport companies participate in the Trade Point and offer preferential rates to customers.
3) Bank Loans: Loans can be secured through Banks represented at the Trade Point.
4) Customs: The Trade Point staff can assist customers in filling out forms and in customs clearing formalities.

From the date of its official launch at the United Nations International Symposium on Trade Efficiency, held in Columbus, Ohio in October 1994, the Trade Point system has emerged as one of the most satisfactory and efficient trade promotion systems. The entry of Iran's Trade Point to this network in 1997 will, it is hoped, link Iranian traders to millions of their counterparts across the globe.

The Internet: The cost of long distance communications and the price of computational power have declined dramatically over time, with the real price of microcomputers, by way of example, falling at an annual average rate of 28% between 1982 to 1988.

At the same time, the quality of information technology applications has risen dramatically. The service technology that has arisen is the Internet, whose fundamental value is to increase productivity, improve performance, connect companies more closely to customers and develop new business opportunities. It is within this context that the Internet has effectively come under use in Iran with many Iranian companies and organizations opening web sites and by linkage of the Agahgar system to the GTPnet (see above) the Iranian trading community has gained direct access to millions of their counterparts across the globe.

Barcoding: As the 73rd member of EAN International (the International Article Numbering Association), Iranian traders, manufacturers and retailers have gained access to a global system of identification and communication for products and services based on internationally accepted and business-led standards. The system of numbering technology (bar coding) developed by EAN provides a common language by which manufacturers, exporters, importers, wholesalers and retailers can communicate information regarding the goods or services they trade. EAN location numbers enable the identification of locations and parties using an international coding scheme which is of particular importance for EDI users who trade nationally and internationally. Such a procedure is necessary so as to avoid the complexity and confusion that may arise if trading partners were to use a different code format and a different set of rules. The use of alphanumeric names is key to the successful implementation of an electronic exchange between business's as it eliminates such problems. EAN location numbers offer an internationally recognized standard solution to the identification of parties and locations. They are recognized by UN/EDIFACT (see above) and by the International Standard Organization (ISO 6523). In addition to being used for correct and unambiguous identification of parties in EDI, EAN location numbers are increasingly used to identify the locations where goods are delivered or shipped. When this information is included on an EAN label attached to logistics units, correctly identifying the parties involved, it will help streamline the administrative

process. Today EAN location numbers are used on a daily basis by over 200,000 parties involved in a variety of business activities worldwide, including chemicals, electronics, banking, healthcare, and retailing. This number is growing at a clip of some 30% a year, setting the scene for a global business environment that takes full advantage of the EAN system in electronic communications. In Iran itself, membership is now approaching the 2000 mark and on average, membership has been increasing at a clip of 302% over the past three years.

Physical Support Network: The implementation of such infostructure requires a strong physical support network. During the First Five-Year Plan ( See Chapter II ) Iran's Ministry of Post, Telegraph and Telephone (PTT) was empowered to create a comprehensive information/ communication network and related services. Iran's network, which is developed around the Protocol X.25 system and is known internationally as Iran PAC, has installed ready to use equipment at 150 centers across Iran comprising an information network using the packet switching system. Its four main access points are Transpac of France, Sprint Net and Tymnet of the USA, Hinet-P of Korea and indirect contact with other countries utilizing the 'Transit" system. The Iran PAC network is internationally registered with the ITU and has the coding 4321. Using "Dial Up", it can support a speed of 19200 bps and through the utilization of lease lines, it can reach speeds of 64 Kbps-2Mbps. With this network Iran's private and public sectors using only a telephone and a personal computer, can connect their communications systems to one another and to those across the globe. An English / Persian data base system named "Payam" which utilizes ANSI/ASCII standards has been set up and utilizes "Teletel-BTX-NAPLPS which can be linked via the telephone lines PSTN and PDN. This data base offers information and services such as news, stock exchange updates, foreign exchange information, electronic mail, teleconferencing, public opinion polls etc. This system also has an computerless vocal (Audiotex) system that provides systems ranging from "vocal faxes" to conference calling.

International data banks that can now be accessed directly from Iran now comprise of:

The Minitel System/France - Orbit/Questel
Compuserve                      - TIES
Dialog                               -BTX
STN                                 - Lexis/Nexis
TCI

Iran's efforts at establishing a state of the art communications system has not been limited only to its borders. So as to promote regional economic integration among its neighbors, Iran has taken a key role in the Trans-Asia Europe (TAE) Project, a fiber optics

cable project covering a total distance of 22,700 Km., the longest land cable in the world. Beginning operations with nine member countries in 1993 and inaugurated in 1998 twenty countries have linked together ranging from Germany to China. The project, which is aimed at facilitating communications among the member countries, has enabled state of the art communications between Iran, Europe and the region. In addition to the passage of some 2,000 Km. of this line through Iran, Iran was also responsible for the implementation of this project in Turkmenistan. Two routes cover the Turkmenistan leg. Fiber optic cables having a capacity of 7,560 channels will be used in the main route and a 155 Mb/s radio link (1890 channels) will be a 2 + 1 restoration or standby route.

Institutional Framework: As explored earlier in this section, the ability to utilize internationally accepted business led standards via CEFACT and EAN International has enabled Iran to implement a single international standard for electronically based commercial transactions that is timely, accurate and is able to render the business functionality that users require. However, concurrent with the growth of electronic commerce in Iran and the growing interdependence and complexity inherent in the implementation of these new technologies, there has been the identification within Iran for the need of clear institutional and legal framework to support this growth. These are evidenced by the implementation of Article 26 of the Second Five Year Plan which provides Iran's Commerce Ministry with the mandate of developing a broad based national and international trade information network. By passing this mandate into ratified legislation, other entities from a broad cross section of economic sectors ranging from Governmental Ministries to the banking sector have been required to coordinate and tie their in their information networks with that of the Commerce Ministry. With the establishment of such a network under the umbrella of a single ministry, problems encountered by other nations such as duplicating initiatives and uneven dissemination of information have been avoided. Instead, in the Iranian experience, two years of intensive work encompassing over 72,000 man hours and incorporative of 2000 trade related subjects a comprehensive feasibility study was completed. As such, the stage has now been set for the launch of a comprehensive national trade information network which will initially tie in 201 data bases to be followed, via a staggered approach, by a further 1,800.

The result will be the provision to all Iranians from all sectors of the economy accessibility to low cost, instantaneous, up to date and accurate trade related information.

Given the fact that new technologies lead to new relationships between old institutions and new institutions, the more predictable an institutional and legal framework is, the greater the facilitation of electronic commerce based growth. It is within this framework that comprehensive legislation is also currently under draft so as to bring Iranian law up to date with the latest technology applications.

The above steps culminated in the holding 16th Plenary session of the Asian EDIFACT Board ( ASEB 16) and EDICOM 98 session in Tehran in July 1998 (see side box). It was with this stage, Iran's achievement in the EC sector entered the world stage, providing a first hand view of the giant strides Iran has made in this regards.