Private Sector Proposes Rainy Day Fund

EghtesadOnline: Iran’s private sector has called on the government and lawmakers to create a fund that would sustain businesses in times of hardship.

News ID: ۷۸۱۶۲۰

03 February 2018

The proposal was put forward by Gholamhossein Shafei, the head of Iran Chamber of Commerce, Industries, Mines and Agriculture, on Tuesday in the latest session of the Government-Private Sector Dialogue Council, a periodic meeting between top representatives of the private sector, the administration and the parliament.

At the 74th dialogue council, the leading private sector figure said such a rainy day fund should be set up through an active multilateral participation to alleviate the needs of businesses for finance, according to Financial Tribune.

“This fund can be considered a development or emergency fund to guarantee businesses get access to finances,” Shafei was also quoted as saying by the news portal of ICCIMA.

Deregulation undertaken by eliminating regulations that hamper business was the other proposal made by the official who said the Iranian chamber has analyzed the successful experiences of several countries in this regard.

Shafei proposed that the council entrust the chamber with the responsibility of conducting complementary research and offer more effective solutions for deregulation.

Minister of Economic Affairs and Finance Masoud Karbasian, who also heads the council, welcomed the private sector’s proposals.

“The emergency fund can become active both within the framework of the Securities and Exchange Organization and the framework of the banking system,” he said.

The minister added that a joint committee consisting of representatives of the Central Bank of Iran, deputy economy minister for banking affairs, SEO and the private sector can be formed to decide how to establish the fund.

However, the official also mentioned an altogether different way of approaching a new source of finance to support the private sector.

“Instead of forming a new fund, it is possible to change the statute of the Iran-Venezuela Bi-National Bank and make it more active with the cooperation of the Economy Ministry’s Department of Banking and Insurance Affairs and the SEO,” Karbasian proposed.

Established in 2010, the bi-national bank’s mission is aimed at boosting commercial relations and investments among Iran, Venezuela and Latin America. Its board of directors consists of four Iranians and four Venezuelans.

The Economy Minister also pointed out that $12 billion worth of foreign finance have been finalized, a majority of which will be employed by the private sector.

“Only one or two projects using the finance are related to the government, but the private sector has the bigger part of the finance in terms of value,” Karbasian added.

Evaluating methods of removing barriers on the way of effectively implementing a law aimed at clearing hurdles for competitive manufacturing and reviewing ways of easing investment in renewable and clean energies were also on the agenda of the dialogue council.

Other high-level officials attending the meeting were Mohammad Reza Pour-Ebrahimi, the head of Majlis Economic Commission, represented the parliament at the meeting, while Minister of Industries, Mining and Trade Mohammad Shariatmadari, Deputy Oil Minister Mohammad Mehdi Rahmati and the Organization for Investment, Economic and Technical Assistance of Iran’s Director Mohammad Khazaei.