Domestic Economy
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The Real Industrial Problem 

The Real Industrial Problem 
The Real Industrial Problem 

Few people might be interested in economic topics and events amid political developments of late. A part of this lack of interest stems from the fact that nothing has been left unsaid in the economic realm. 
Untold hours have been spent on explaining economic issues and proposing scientific solutions that could help the country out of the current morass, but sadly no one wants to listen. 
Hossein Haqgou, an economist, prefaced his write-up for the Persian daily Ta’adol with this note. A translation of the text follows:
One of the headlines of economic news these days is the impeachment of the minister of industries, mining and trade, which was proposed two months ago but shelved by the parliament speaker for a while on the pretext of the ministry’s proposed division and the formation of the new commerce ministry.
Almost all experts and industrial players believe that the replacement of one individual, or merger, or division of a ministry would be futile in the absence of an industrial strategy or policy, as it will only compound the problem and delay any resolution.
It’s been said umpteenth times that unless you  prepare an industrial development roadmap, the comings and goings of people and organizational shake-ups won’t have a meaningful effect on the situation of troubled industrial enterprises.
Amid the news of the minister’s impeachment comes the news of a ban on the import of 2,150 items (up from the previous 1,550). In other words, the import of 600 new items has been banned to “prevent the outflow of foreign resources” and “support domestic production”. 
This is another wrong economic strategy, i.e., replacing imports with self-sufficiency, which has been practiced over decades and brought about nothing but the weakening of production, industry, innovation and technology, and proliferation of smuggling and corruption for the country and people.

 

 

Need for Nat’l Industrial Strategy

The performance of successful developed countries has shown that the only way to industrial development is “participation in global value chain of production” by relying on the export of high quality and competitive products. 
This is not a pattern that can be defined within a ministry or by a minister, instead it should be achieved at the national level through a change in the perspective of authorities. After all, industrial development is the strategy of the whole economy, not the strategy of the Industries Ministry alone. 
The “participation in global value chain of production” strategy requires the guarantee of ownership rights, respect for individuals’ and citizens’ rights, inclusive foreign policy and interaction with the world, stable economic policies (exchange rate, interest rate, tariffs, annual budget, etc.), business environment (rules and regulations, permits, etc.) and strong social security and financing system.
If parliamentarians and other branches of the government are intent on helping the country prosper industrially, they need to focus on preparing the industrial development roadmap and strategy instead of the last link of this chain, i.e., the minister and the ministry (the easiest part). They need to show they are set to change their mindset and want to clear hard, historical hurdles. 
Such a change requires a deeper look at industrial issues, identifying problems facing the Iranian people on all fronts and a fundamental revision at all levels.   
 

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