Domestic Economy

Gov’t Owns Lion’s Share of Economy

Gov’t Owns  Lion’s Share of EconomyGov’t Owns  Lion’s Share of Economy

Criticizing the small share of the private sector in Iran’s economy, the president of the Association of Iranian and Foreign Joint ventures affiliated to Iran’s Chamber of Commerce, Industries, Mines and Agriculture says the government owns more than 85% of the economy.

“Even part of the remaining 15% is owned by semi-private and public enterprises,” IRNA quoted Seyyed Hossein Salimi as saying at a conference on investment development for Khorasan Razavi Province held in the provincial capital city of Mashhad.

He stressed the need to empower the private sector to achieve the goal of increasing annual non-oil exports to $175 billion in the coming years.

Non-oil exports stood below $50 billion in the previous Iranian year that ended on March 20.

 Call for Privatization

Also speaking at the conference, ICCIMA head Gholamhossein Shafei emphasized the importance of privatization in boosting production, entrepreneurship and employment. He said the Iranian private sector is caught up in an “unfair competition”.

“The presence of large government-affiliated holdings and quasi-governmental organizations has made people’s participation in the economy very difficult and limited the private sector’s investment in the productive sectors,” he said.

Shafei called for close cooperation between the government and the private sector to change the current situation and increase efficiency and transparency in the economy.

“Iran’s economy will be far from a free market so long as state-run enterprises assume the maximum share of the financial resources and domestic markets,” he noted.

 Immediate Need for $100b in Foreign Investment

Elsewhere in his remarks, Salimi said Iran is in immediate need of at least $100 billion in foreign investment as well as low-interest foreign loans, adding that foreign investment is an integral part of development and economic growth.

“No country, not even the US, China or Turkey, could have achieved development without foreign investment,” he noted.

The ICCIMA official said the costly and time-consuming procedure for starting a new business is a barrier to foreign investment.

“Establishing a manufacturing unit currently entails heavy financial burdens. Registering a company in Iran requires at least one month, whereas countries such as Turkey carry out the same procedure in less than a day,” he said.

High interest rates charged by banks on loans to businesses and high inflation rates were mentioned by the official as other stumbling blocks to attracting foreign and domestic investments.

Salimi said sanctions imposed on Iran’s economy by the West over the country’s nuclear energy program should not hinder efforts to improve the private sector’s role in the economy “which is key to economic prosperity.”