Looking inward way out of economic problems
The Leader of Iran’s Islamic Revolution emphasized Friday, in a meeting with a group of commanders of the Air Force and Air Defense of the Army, that what resolves problems is the internal factor, namely the effort of committed officials and the cooperation of a united nation, referring to the futile experience of nearly two years of negotiations with the US that resulted in the JCPOA.
Economic issues are currently one of the country’s top priorities, and the Leader also emphasized this issue in the inauguration ceremony of President Pezeshkian in July this year. However, experts consider one of the main economic problems of the country, which has harmed people’s livelihoods, to be internal issues. They stress that these issues must be resolved to solve the problems. Experts further say that the economy must be handed over to the private sector and the people, and the key to solving it must be sought internally, not in negotiations.
Abdolnaser Hemmati, Iran’s Economy Minister, has also maintained that in the current situation, “there is no alternative but to empower the private sector and change the economic governance scene to involve all members of society in the economy and make the most use of national capital and internal capacities.”
Solving problems requires prudence
Jafar Ghaderi, the vice chairman of the Economic Committee of the Iranian Parliament, believes that the reason for the economic problems and currency fluctuations in the country is that “we have not been able to direct liquidity towards the production sector and the productive economy.”
Ghaderi added: “If people are confident that their liquidity is going towards a direction that can lead to the prosperity of production and provide the ground for maintaining their purchasing power, they will not go after purchasing foreign currencies and gold.”
“If people are not doing this now and are going in a direction that pursues their own interests, separate from the interests of society, it is because we have not paved the way for them,” the MP said.
Ghaderi emphasizes that people must be allowed to play a role in the economy. “We must activate large industrial units with people’s participation,” he said, adding that it will remove the need to wait for others outside the country to play nice in order to toy with our economy.
“The fact that we do not use non-inflationary methods to finance and solve the liquidity problem of production units has nothing to do with sanctions.”
He concluded: “Unfortunately, some government officials cannot solve problems and attribute them to sanctions, while most problems are not due to sanctions, but rather to the lack of prudence of managers who have not been able to use the country’s capacities.”
Root of many problems internal
Javad Hosseinikia, the vice chairman of the Industries and Mines Committee of the Iranian Parliament, drew attention to the recent announcement of the minister of petroleum that Iran’s oil exports have reached their highest level in the past 10 years. “This shows that sanctions have not been able to prevent the sale of Iranian oil,” said Hosseini Kia.
The MP also contends that the country’s economic problems are related to internal issues and confirms Ghaderi’s statement that the inability to direct the society’s liquidity towards productive activities and job creation is behind these problems. “We have not been able to increase the value of the national currency and create transparency internally,” he notes, adding that these are internal weaknesses and have nothing to do with external issues.
“Today, our production enterprises are operating at 40 to 50 percent of their capacity. Shortages must be eliminated so that the full capacity of these enterprises can be realized and export capacities can be developed.
Hosseini Kia maintained, “Today, self-sanctions have caused the country’s problems, not international sanctions. Internal sanctions have hindered economic and development activities and increased our problems.”
In need of structural reforms
Vahid Shaghaghi Shahri, an economics professor, reaffirmed that a part of the country’s key problems are internal issues, adding that without structural reforms in the Iranian economy, they will not be solved. He said: “Even if sanctions are lifted, no solution will be found. Of course, it is possible that inflationary expectations may subside in the short term, but this is not a solution to the country’s problems.”
“We have an economy that is still based on oil, but the problem is that due to shortages, there is no more oil to sell,” he pointed out.
“To solve problems, economic reforms must be implemented, and the Leader has also emphasized that the private sector must be given space and must come to the forefront. However, the state-run economy has closed the doors to the private sector, and a suitable business environment for the involvement of the private sector is not provided. Instead, monopolies and quasi-state entities are present. In such an environment, competition does not emerge in the Iranian economy, and therefore, the possibility of becoming resistant to sanctions is greatly reduced.”
Stressing that there is no alternative to structural reforms within the Iranian economy, the economic expert said: “The Iranian economy must change, and the environment must become ready for the involvement of the people in the economy, which is only possible with the improvement of the macroeconomic environment.”
The full article first appeared in the Persian-language newspaper Jam-e Jam.