As Iran gets ready for a period of normalcy after the lifting of international sanctions later this week, the key private sector Tehran Chamber of Commerce is busy holding a series of meetings to chart out the proper course of action and find solutions to the economic problems. The debates also aim to crystallize the economy’s potentials and the private sector role in tapping its potential.
In the TCC’s third meeting held Sunday, Djavad Salehi-Isfahani, an economist with the Virginia Tech University and Mahmood Sariolghalam, a professor of international relations at Shahid Beheshti University in Tehran, faced each other on key developmental issues and took stock of the reach of the private enterprise as opposed to the clout of the government on the road to sustainable development.
Masoud Khansari, TCC chairman told the conferees that “lack of transparency and mismanagement” are the key constraints private business face and which took on added burden during the harsh years of economic sanctions when the country’s interaction with the outside world was at the bare minimum.
He referred to the shortage of capital, the small size of most private businesses and outdated technology as other hurdles. “The private sector also suffers from a small target market for its exports, limited to a cluster of unstable regional countries.”
Local vs. Universal
As the main debate opened, “Sariolghalam focused on normal and “sustainable international relations” as a central need, while Salehi-Isfahani zeroed in on the role of “human development” as primary drivers of growth.
While Sariolghalam called for a broad vision by emphasizing the need for “consensus on definitions” and a “national dialogue,” Salehi-Isfahani stressed the need for more groundbreaking research and less cliché statements from experts. This, in turn, was echoed in Sariolghalam’s talk where he upheld the need for and belief in a “quantitative approach” to economic policy.
“The main principles of development are in essence universal, but can be tuned to local realities.... It’s like a country is interlocked with other nations to be able to develop” and move forward, the university instructor told the conferees.
Salehi-Isfahani confirmed that to achieve developmental goals, Iran simply cannot afford to blindly follow the example of other countries.
“For instance, increasing international trade based on cheap labour that was the case with East Asia is not suitable for Iran,” he said.
He criticized Iran’s education system for attaching too much importance on tests and failing to prepare students for the much-needed job skills and entrepreneurship.
“However, there are graduates with higher reservation wages because of their levels of education. Hence there is a need to think about ways that can increase the return on education,” he said.
To achieve human development goals, Salehi-Isfahani advocated reforming the labour law to augment motivation, promoting on-the-job-training and enhancing job security.
He underscored the role of private enterprise in a knowledge- based economy and called for independent institutions and academia to analyze public policy. “This, in turn, will increase private sector participation in national policymaking.”
Sariolghalam called for a national dialogue on political-economic issues to be able to forge an agreement on the basic definitions that would eventually help put an end to the unwanted philosophical tussles detrimental to growth.
The session was well attended, thanks to the name and fame of the speakers. Keynote speakers at previous events were all prominent economists, namely Mohammad Hashem Pesaran a Cambridge University Scholar, Mohammad Satarifar former head of the Management &Planning Organization of Iran, Saeed Leyaz a well-known pro-reform economist, Farhad Nili Iran’s former envoy to the World Bank, Mohammad Tabibian and Mousa Ghaninejad .
