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State Coordination Vital for Economic Upswing
Economy, Domestic Economy

State Coordination Vital for Economic Upswing

Two months have elapsed since the nuclear agreement between Iran and the P5+1 countries, and much has been written and said about the necessity of restructuring Iran’s trade regime to accommodate the post-sanctions prospective requirements.

However, what has to be done to promote the status of Iran’s foreign trade in the new atmosphere opening after the Vienna agreement?

One of the most important aspects that should be addressed is the large number of players, both in the public and private sectors, and the necessity of forging coordination between them to create synergy and expedite the pace of change in the trade arena.

In the public sector alone, various ministries and bodies have a say in this respect, such as the Ministry of Industries, Mining and Trade and its affiliates, including Trade Promotion Organization of Iran, Ministry of Economy and its affiliates such as the Organization for Foreign Investments, Central Bank of Iran, Oil Ministry, Energy Ministry, Ministry of Roads and Urban Development and the Committee for Economic Coordination.

Within the private sector, the main stakeholders are the Iran Chamber of Commerce, Industries, Mines and Agriculture as well as Tehran chamber of commerce, besides various industry-specific associations and NGOs, as well as large influential enterprises.

However, a lack of alignment between these diversified stakeholders in the public and private sectors in the past has led to inefficient use of resources, loss of precious time and eventually diminishing competitiveness, in addition to raising the cost of transaction. Therefore, regular coordination between these stakeholders at the national level is a must.

On a different note, according to the policies underlying Article 44 of the Iranian Constitution notified by the Leader of Islamic Revolution Ayatollah Seyyed Ali Khamenei, the share of the private sector in the economy must increase. However, in recent years, due to tough sanctions, troubled state of the economy and flawed state policies, this share did not materialize and, in some sectors, it was even reversed.

As a result of the Vienna agreement, the clock can be set back and the private sector should be allowed the space upfront in the economy. This can be done by devising policies and setting priorities that accommodate the concerns and needs of the private sector, and offers them facilities, such as consultation, feedback and a level playing field.

Facilitation of trade and simplification of procedures, which would considerably enhance the competitive advantage of Iran’s private sector in the international business arena, fall into this category.

An important prerequisite for the smooth and sound flow of business activities is the availability of up-to-date information on rules, regulations and future plans of the host government. Therefore, there is a crucial need for having a government official tasked with clarifying economic and trade issues in the post-sanctions era to all domestic and foreign businesses and facilitating optimum and free trade.

Due to the sensitivity and complexity of the above tasks, and their trans-sectoral nature, they can effectively be addressed only under the auspices of the president as the highest ranking authority. Therefore, President Hassan Rouhani should take prompt action on this issue to avoid further loss of opportunities and initiate the much-talked about reforms in Iran’s foreign trade in the post-sanctions era.

Without his direct support and state coordination, scattered actions will be ineffective and economic prospects will be lost in the labyrinth of bureaucracy.

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