Domestic Economy

Job Creation Will Depend on Sustainable Growth

Job Creation Will Depend  on Sustainable Growth
Job Creation Will Depend  on Sustainable Growth

Iran’s current “economic malaise” is the result of mismanagement during the past decade, Masoud Nili, senior economic advisor to the president, said on Wednesday.

As a result of the past decade’s wrong trade policies, Iran has now been made heavily dependent on imports from other countries, Nili said. “The significant trade imbalance has severely damaged the major industries,” IRNA quoted him as saying. “Definitely, there will be critical days ahead for the national economy, so the government must act wisely until the challenges are resolved; otherwise the country has to face with numerous social problems.”

The next ten years are expected to be a very important period for the economy, and the job market in particular, he said. According to the Central Bank of Iran, 10% of Iran’s population is currently unemployed. The situation is expected to further deteriorate as four million university graduates are expected to join the job-seeking population in the coming years. The government needs to create nearly one million jobs per annum in order to be able to tackle the rising unemployment rate.

In doing so, the government is expected to allocate almost 20 trillion rials out of its 2,673 trillion-rial annual budget through next year to tackle the unemployment problem. “The issue must be addressed immediately as the economy grapples with severe fluctuations in the currency market and the plunging oil prices, as this may result in a sharp increase in the inflation rate,” Nili stated.  

Many experts believe that the government’s envisioned plan for job creation is unlikely to bear fruit in the absence of sustainable economic recovery, which has been halted owing to rising inflation.

However, Nili sees the solution in helping the private sector to play a more active and effective role in the economy.

“Iran’s economy should be handled in such a way that there is more room available for private sector’s effective engagement,” he said.

“In many countries, even those that openly advocate foreign investment, attracting foreign businesses is not given priority,” he said, citing China, the world’s second largest economy, as an example where foreign investment is no more than 20% of the total money invested in the economy.

“Iranian statesmen are more concerned with inflation than with two other variables of economic growth and unemployment,” he further said, noting that growth can be brought about only when the economy is set free from the government’s grip.

He said that the problem in the oil-rich countries such as Iran is that the oil revenues tend to disrupt “the economic functions” as these economies are more likely to prioritize import over domestic production and exports.