Colossally Unprepared

Deputy Chief Editor
Colossally Unprepared
Colossally Unprepared

This weekend was a bit different for economic Iran and the obstreperous free-marketeers long waiting to detect new signs of fatigue in and strong opposition to centralized economies.

Ali Tayebnia, the economy minister and stalwart of private enterprise, officially made it known that the government has no magic wand to alone fix the economy, and therefore must stop for thought and weigh the alternatives.

President Hassan Rouhani’s top economic aide apparently knows what is coming when he said the government, the bloated bureaucracy, and the army of loss-making state institutions long on the gravy train should take an economic back seat before time runs out.

“The gigantic role of the government is the biggest economic problem in the country.” On the same wavelength, he underscored the need to “revive the private sector to the position compatible with its status.”

 There was, however, one sentence in the minister’s vision for the future of the economy that is struggling maybe like never before in over half a century.

“In the present circumstances there is no meaningful difference between the private and government sectors when it comes to efficiency.” Thank you Tayebnia.  What else?                                         

Since after taking office in the summer of 2013, Rouhani and his technocrats of various stripes have not lost a single opportunity to promote free enterprise and tell all those willing to listen that the era of big government has clearly outlived its usefulness and must be done away with. Good governance is the name of the game they repeat, but have yet to walk the talk.

Adept and erudite in his own right, what Tayebnia, or for the matter others before him, shy away from is the bitter truth that the private sector is colossally unprepared to rise to the occasion and help the administration in getting the job done. The fundamental problem with sections of our private sector was and is that their appetite for profit is simply insatiable. The gains and terms most private investments seek in Iran are more often than not over and above acceptable norms. Add to this the lack of proper oversight and rule of law.

With the benefit of hindsight it should be said that the dilemmas that confront our economy in almost all spheres are indeed many and deep. Giving enough space and voice to non-government economic players is a declared goal of the roadmap the administration has produced and promoted for the past 18 months. But so far the response from private business leaders, investors and industrialists, too busy making an extra buck, has been few and far between.

Some who monitor the undecided economic landscape have been quoted as saying that governments, caught between a rock and hard place, often try to pass on their burden to others. How far this claim is valid is not the function of this write up. What can and must be said is that the present government is too big and has little option but to become leaner. The plain truth is that big is no more beautiful.

Measures have been taken to turn the tide and downsize in some key sectors like infrastructure, foreign trade, industries, mass communication, power generation et al. But again these are complex issues and produce results in the long-run depending on systemic changes in procedures, rules, regulations and above all the mindset of private enterprise.

It should be highlighted that it is neither the government nor the private sector which can expect to accomplish success by itself on the arduous road to economic restructuring and welfare of the masses. To take the economy towards commonly accepted goals the two must play a mutually supportive role.

Even as reforms remove government control over economic activity, it is an undeniable fact that the economy can grow and develop only on the basis of an honest, trustworthy, and vibrant relationship between the government and private enterprise. This is the ultimate test of wisdom, common cause and good governance.

Whether for the sake of compulsion or convenience, on this issue of paramount importance the government strategy is apparent and for all to see. Will entrepreneurship stand up?