Iran’s economy was struggling with a number of super challenges when the government of President Ebrahim Raisi came to office.
Three years before the new government, the withdrawal of the United States from the Joint Comprehensive Plan of Action had thrown the economy into disarray and blown away the deal’s achievements. As a result, when the new government took the helm, it had countless economic problems to tackle, Mohsen Jalalpour, former president of Iran Chamber of Commerce, Industries, Mines and Agriculture, prefaced an editorial for the Persian daily Donya-e-Eqtesad with this note on the occasion of the recent election of the new head of the chamber and its members. A translation of the text follows:
The new government took a different path although it could revive the economy through diplomacy and negotiations, thanks to the support extended by the main branches of power. Government officials have reiterated time and again that they won’t let negotiations with the West to impact the economy. Sadly, this strategy has not produced favorable results up until now and the economic conditions have become more complicated and critical.
On many occasions, economists have said that the decisions of the Central Bank of Iran to prevent economic shocks cannot be as effective as a single decision of the Foreign Ministry to improve the economy. Today, we are seeing that the government’s fruitful talks with the countries of the region, especially Saudi Arabia, corroborate the truth of this claim.
Political Will
The government has gone through enough trial and error to actualize its political and economic hopes and aspirations over two years since President Raisi became Iran’s eighth president. All those in politics and economy know that effective economic policymaking is necessary to overcome the current situation, but it is not the only condition. “Political will” is also essential. Now that relations with neighboring Arab countries have improved, thanks to the political will and despite all the tensions of the past years, economic players expect a resolution of other problems.
If such conditions are created, then the new Iran Chamber of Commerce, Industries, Mines and Agriculture will be of great help for de-escalation and the strengthening of economic relations with countries that were seen as our enemies until yesterday.
Fortunately, the election of the new president and board of directors of ICCIMA has coincided with positive developments in the diplomatic arena and created a new capacity that, if used correctly, could be a source of improvement. In order to properly tap into such capacity, the private sector and the government should have more convergence. This convergence can specifically become the basis for improving the business environment, streamlining exports and clearing hurdles in the way of economic growth. I believe that there is no more important mission for ICCIMA than the revival of economic diplomacy to achieve economic growth.
Liquidity Generation Factory
The runaway inflation has decreased domestic demand to a great extent; the only way to stimulate demand, bring back the factories to life and facilitate foreign trade is through export. If we are seeking to succeed in exports and have a thriving economy, we should restore our ties with regional countries.
Unfortunately, inflation has turned Iran’s economy into a factory that generates inequality. The incumbent government is surely not interested in being remembered as the government that broke unprecedented records in recession and inflation in the history of Iran’s economy. The government should try to improve Iran’s damaged relations with the international community within the next two years, therefore it needs to use the huge capacities of the private sector for negotiations.
Iran Chamber of Commerce, Industries, Mines and Agriculture should also put on agenda the strengthening of innovation and facilitating the activities of startups and emerging companies. Over the past months, restrictions on the internet have given a big shock to companies, but the factions of private sector failed to buttress the companies.
ICCIMA is not merely the representative of the traditional sector of the Iranian economy; it should have defended the newly established sectors as well. In the end, I wish success for ICCIMA’s new board of directors and advise my friends not to engage in unhealthy relations in the future and never lose sight of the principles of economics, which call for advocating policies that guarantee economic growth.
