Economy, Domestic Economy

Small Businesses Can Ease Unemployment

Small Businesses Can Ease Unemployment Small Businesses Can Ease Unemployment

At least 50,000 new jobs can be created through low interest loans provided by Omid Entrepreneurship Fund (formerly, Imam Reza Compassion Fund), ISNA quoted the fund's deputy for organizing and empowerment, Ali As'habi, as saying on Monday.

"The loans will be offered at 4% interest rate to entrepreneurs for establishing small businesses in the areas of handicraft, precious stones, educational toys, robotics and clothing," said As'habi, noting that the move is aimed at generating employment and increasing economic self-sufficiency, in line with the policies of resistance economy.

Development of small businesses across the country has been repeatedly promoted by the ministry of cooperatives, labor and social welfare over the past year.

“Attempts have to be made for the expansion of small businesses and sustainable employment at the time when the country is grappling with unemployment,” said deputy labor minister, Koroush Parand, noting that university graduates account for 3.5% of the total unemployed population, IRNA reported.

The next ten years are expected to be very important for the Iranian economy and its job market in particular. 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 will join the already saturated job market in the coming years. The government needs to create nearly one million jobs per annum to be able to tackle the rising unemployment rate.

Calling for what he described as a “market-based training model”, the deputy minister said: “It is a major step in supporting national production. Such a model can help improve the business environment.”   

 “If supported by the private sector, the model has the potential to create sustainable employment,” he added.   

Job creation is a very expensive business in Iran. “Some 2,000 million rials is said to be needed for every single job to be created in Iran. The amount reaches higher to about 20 billion rials in oil and petrochemical sectors,” Minister of Cooperatives, Labor and Social Welfare, Ali Rabie, said recently. The government is expected to allocate about 20 trillion rials next year, which accounts for a considerable part of the government’s annual revenues, to tackle unemployment.

However, many experts believe that the government plans for job creation would unlikely bear fruit in the absence of sustainable economic recovery.