An Unambiguous Message

EghtesadOnline: Private enterprise needs one unambiguous message: The incoming government is here to facilitate the works and will create an efficient, responsible and dynamic environment.

News ID: ۷۸۶۷۲۳

21 July 2021

This was stated by Masoud Khansari, head of the Tehran Chamber of Commerce, Industries, Mines and Agriculture in a write-up for the Persian-language economic newspaper Donya-e-Eqtesad. Below is a translation of what he wrote:

The 13th government will take office soon and naturally employ a different set of economic policies and tools. Early days of new governments are typically the most stressful for the business community and economic stakeholders simply because they have little information about the new policies. Almost everything revolves around presumptions.

Upholding the following principles can and will help pave the way for a better economic climate:

1. The new Cabinet means new faces. Ministries and their sub-divisions will undergo a seismic change. Deputy ministers and director generals of the ministries will be newcomers. New officials, new visions and new policies.

All this will happen with the (US) sanctions in place, improved living conditions far from assured and the economy in recession and strained by lack of investment.

Under the circumstances, the importance of informed choices in picking candidates is more pressing than ever before. Resourceful mangers familiar with Iran’s economic challenges will be capable of spearheading an administration which sends a message tranquility to the society at large.

Such choices can’t be against forming a government that includes young people. Responsible managers cannot and will not let hundreds of bylaws and directives flood the economy in the early days of the new government.

2.    Of course the government can (and should) take measures to energize the economy without the need for consent from the parliament  or other administrative bodies by carrying out small reforms in taxation, customs, banking and social security. These are not structural reforms but can level the playing field.

3.    More than the outgoing administration, the new government should ensure people and economic stakeholders   that it will inject tranquility to the economic landscape and not allow space for unwanted and unhelpful extreme measures. Private enterprise indeed is in need of hearing this unambiguous message. Experts in no small numbers working with governments have no particular affinity or affiliation to a specific political line of thought. A full-circle reshuffling of staff is not only ineffective, it is discouraging and unproductive.

4.    A popular slogan during the rule of Britain’s former Conservative Party leader Margaret Thatcher was “Our political opinions are not important; the determining factors are economic realities.” This vision is a microcosm of today’s Iran. Our opinions regarding the Iran nuclear deal -- fair or otherwise -- is not important. What matters is that Iran must get rid of the economic sanctions. Even the policy of ending the economic war is not key per se. What is needed is the pace at which these policies will be implemented. The new government has to  ensure the nation and investors that it supports the end of sanctions and will strive to this end.

5.    Put simply, Iran’s economy needs investment. The government does not have enough resources. At this stage, it needs to attract foreign investment or investment by the Iranian diaspora. What if the new government builds a national consensus, both winning over expatriates and ensuring investors at home that the business environment will improve?

6.    The incoming government is obviously keen on carrying out measures that will produce tangible economic results. It is my hope and desire that the new government does not choose to revive the economy with expansionary monetary policies. Expanding hidden subsidies or doling out cheap loans to help people produces more corruption, wastes resources and eventually hurts livelihoods.

7.    From all that is known, the government is not a ceremonial institution. Words coming out of the mouths of senior officials will trigger social and economic response. The Raisi government should take a no-nonsense, pragmatic approach in running the affairs of state. As such, executives will maintain their composure and the people won’t see different, and at times contracting, opinions from the Cabinet members.

8.    With a plethora of economic plans and programs, the government won’t need to design new plans. By implementing those plans it can facilitate economic growth and release its verifiable, short-term (first 100-day or one-year) plans. By doing so, it can enable economic operatives to adjust with the course of the government and chart a roadmap for their future.

Days leading to the inauguration of a new government are instrumental and stressful for business owners. The coming and going of managers as well as speculations have the habit of pushing development procedures to a standstill. The new government is and should be able to prevent such disruptions armed with foresight and prudence.

Intro: Our opinion(s) regarding the Iran nuclear deal -- reasonable or otherwise -- is not important. What matters is that Iran must get rid of the economic sanctions. Even the policy of ending the economic war is not key per se. What is needed is the pace at which these policies will be implemented. The new government has to ensure the nation and investors that it supports the end of sanctions and will strive to this end