Economy, Domestic Economy

Plans to Reform Function of Funds

Plans to Reform  Function of FundsPlans to Reform  Function of Funds

Minister of Cooperatives, Labor and Social Welfare Ali Rabiee called on Sunday for a reform on the overall function of the country’s existing funds, saying that they have great potential to be driving force behind development projects.

“We need to make necessary reforms of the funds and such reforms are already underway. Moreover, the view that tries to describe the funds as private and at the same time governmental entities has to be changed,” he said speaking at the First International Conference on Bitumen in Tehran.

He further said that the funds are making use of the public assets to peruse just privatization, adding, “Making reform on function of funds will help increase investment security and decrease risk of investment.”

“The funds will be more productive, should they expand their activity at the international level,” he said. “Pension Fund has signed very important international agreements including those signed with Georgia, the Republic of Belarus and some African countries.”

He also said, “pension fund’s other program is to attract foreign investors. We can be a good partner for foreign investors in our country’s programs.”

Pension Fund is an independent legal entity under the governance of the ministry of welfare and social security, and runs as an insurance company. This organization is responsible for the affairs related to the retirement of Iran civil servants. Beneficiaries of the fund include civil servants, government employees and the self-employed.

Pointing to a 7 percent growth in employment market Rabiee said, “We hope that the country will achieve its target growth of three percent by the end of the year (March 2015). To achieve the set goals we need to make structural reforms on a daily basis. In that way government-driven development will be of no use.”

The government needs “intermediary institutions” to achieve its goals, he said. “The existing funds, which hold public assets will play a significant role.”

The Iranian government has crafted different development programs. One such program was the establishment of the National Development Fund of Iran (NDFI) which is Iran’s sovereign wealth fund.

The NDFI was founded in 2011 to supplement the Oil Stabilization Fund. Based on Article 84 of the Fifth Five-Year Economic Development Plan (2010–2015), the fund is to transform oil and gas revenues to productive investment for future generation.

Accordingly, 20% of oil income is to be transferred to the fund and this percentage would increase 3% annually until the end of the fifth development plan. The NDFI is to extend 50% of its financial facilities to private, cooperative and non-governmental sectors and 20% to promote foreign investment in the country.