Iran Private Sector Seeks Bigger Role in Next Cabinet

EghtesadOnline: As the first tenure of President Hassan Rouhani is coming to an end and he is expected to introduce his Cabinet for the next administration in a matter of weeks, the private sector has renewed its call to have a bigger presence in the government’s scheme of things.

News ID: ۷۴۲۹۵۸

24 July 2017

“We hope ministers of the next administration will be familiar with global developments and be real experts in their field, who move in line with the country’s economic plan. We hope that they will believe in escaping from total government control and consult the private sector and independent experts,” the head of the Iran Chamber of Commerce, Industries, Mines and Agriculture said.

Gholamhossein Shafei also called on the government to form a team of economic advisors whose main responsibility would be to identify, prioritize and offer solutions for economic woes, the official news website of ICCIMA reported.

As an advisor to major branches of the government, the Iranian chamber has so far put forth its views on a variety of issues, including the necessity of devising a comprehensive economic plan, improving the business climate, reducing bank interest rates and adhering to tax fairness, according to Financial Tribune.

As Shafei notes, the chamber has repeatedly emphasized the importance of strengthening the role of private sector and improving the share of private sector in the economy.

Speaking in the latest meeting of ICCIMA’s board of representatives on Saturday, the official asked the next administration to devise a comprehensive plan to control its costs and steer clear of populist policies and ad-hoc schemes implemented without proper studies.

Shafei said the completion of incomplete projects would lead to long-term development and advised the administration to cede a number of these projects to the private sector, stressing that prioritizing them for maximum efficiency would be most important.

Noting that “upstanding manufacturers” must be distinguished from those who ride a wave of high inflation to their advantage, the official added that the ICCIMA “is ready to offer its full capacity to the government in this regard”.

The ICCIMA chief had previously criticized the government’s 300-trillion-rial ($8 billion) stimulus package for manufacturing units, stating that in many cases, “these new loans increase the problems of production units in the country and do not count as a positive step toward solving problems”.

Shafei supported the idea of bank mergers, which has been increasingly floated in the past few months, saying it must be undertaken as the economy does not have the capacity to handle so many banks.

In late May, Governor of the Central Bank of Iran Valiollah Seif confirmed the possibility that a number of the total of 36 banks and credit institutions could be merged, stressing that it will help their financial statements comply with international standards.

The resources of the National Development Fund of Iran and how they are spent were another issue focused on by the ICCIMA chief who emphasized that the assets of the sovereign wealth fund must be used to support export development.

Noting that the private sector has shown less enthusiasm in using the fund’s forex loans as a result of volatile rates in the past few years, he stressed that it would be a mistake to draw from the fund whenever a problem arises.

Commenting on the impact of currency fluctuations on NDFI loans, Shafei said, “It is our proposal that the government guarantee a minimum amount for changes in rates or set a minimum and maximum fluctuation range so that businessmen would know the risks of using these loans.”