Economy, Business And Markets

Private Sector in the Spotlight

Private Sector in the Spotlight
Private Sector in the Spotlight

Opening up the economy to entrepreneurs and businesses in after the sanctions are lifted is a government priority, said Mohammad Nahavandian, president Rouhani's chief of staff. Preparing for the new and normal economic climate after the lifting of sanctions is a crucial for both the government and private sector, he added.

Nahavandian, who was addressing a business gathering in the holy city of Qom on Friday, urged policymakers to pay closer attention to the new economic atmosphere in their future policies, both at the microeconomic and macroeconomic levels.

"The upcoming economic era will offer a unique opportunity to settle the long-standing structural problems of the economy if we seize the opportunity," he was quoted as saying by IRNA.

The decade-plus sanctions changed the power equations for the national  economy in the international arena according to the senior official. The sanctions on Iran's banking system and exports were part of a "ploy" for isolating the country. "There was a time when we used oil as a strategic lever, but eventually sanctions also hit our petroleum sector."

 Dismissing claims that all the ills visiting the economy are the outcome of sanctions, Nahavandian acknowledged that the restrictions have "left their mark on all sectors of the economy."

He welcomed the expected termination of the economic restrictions, saying it would breathe new life into Iran's economy and international trade. "Stability and predictability in the markets" would be the government's main duty in the new era.

Banking Reforms

Reforming the banking system is another key item on the government's agenda. Nahavandian noted that "high attention" has been given to this scheme in the next economic development plan (2016-21). "The Central Bank of Iran is also tightening supervisory measures to cleanse the banking system and transform banks into institutions that support manufactures and the services sector."

He referred to the huge bad debts of lenders saying their speculative measures were the root cause of their present dilemma. The responsibility of banks is to absorb deposits and channel savings into production instead of engaging in non-banking activities.

"The stockpile of government's debts to the CBI is another serious problem that needs to be addressed. The previous administration utilized CBI assets for activities other than production and contributed to hyperinflation."

Expanding Exports

Pointing to the reengagement with the global economy, the senior official urged Iranian private sector and exporters to seize the opportunity for selling their products in markets like Russia and Iraq and promised strong government support.

"The Russians are willing to import our domestically-manufactured goods in many fields and their markets have a high consumer potential. Iraq is also a good market for our goods and services," he said.  

Tax Regime  

Nahavandian stressed the necessity of curbing the overdependence on oil and moving toward an economy based on a comprehensive and efficient tax regime.

 "A fair, balanced and transparent tax system is vital to a healthy economy," he emphasized, and noted that the government "does not intend to raise taxes" but is determined to expand the scale and scope of tax collection.


On Iranian companies' assets and other holdings overseas, he said a bad economic situation left them with little option but to move their money to other countries.

 "A monopolized and non-competitive business climate along with other limitations triggered huge capital outflows," he said, adding that a stable, transparent and functioning economy would bring back investments to Iran.

 Iranian lenders cannot provide for all the economic needs, the close aide to President Hassan Rouhani said, and stressed the importance of foreign investment and finance for sustainable development. "We should absorb foreign credit and finance and import modern technology."


He referred to the large number of visits by foreign delegations to the country since last summer and said an educated workforce and the country's geopolitical clout is compelling for foreign investors. "We can use their advanced technology and they can benefit from the low cost of manufactured goods in Iran. These ties can also help reopen international markets to Iranian products."