Economy, Domestic Economy

Job Market Not Benefiting From Loans

Job Market Not Benefiting From LoansJob Market Not Benefiting From Loans

The job market has not much benefited from the loans granted by commercial banks, Minister of Cooperatives, Labor and Social Welfare Ali Rabiee said.

According to available data, 2,360 billion rials ($87.7 million at official exchange rate) were supplied into the market last year in the form of banking loans, the minister said, addressing a meeting with CEOs of commercial banks in Tehran. “But it had not such a big impact on the job market,” he added.

“So far this year, the situation has been almost the same,” IRNA quoted Rabiee as saying.

He complained about the inefficient use of banking resources, saying that “240,000 industrial jobs” are now in jeopardy as a result of mismanagement in allocation of the loans. He warned that if the jobs are lost they could hardly be replaced as job creation is a very costly endeavor everywhere in the world.  Some 2,000 million rials in the budget is said to be needed for every single job to be created in Iran. In oil and petrochemical sectors, the amount goes even higher to about 20 billion rials.

The government should create nearly one million jobs per annum if it is to tackle the rising unemployment rate, which according to the Central Bank of Iran is hovering now around 10%.

The government is expected to allocate almost 20 trillion rials next year, which accounts for a considerable part of the government’s annual revenues, to tackle unemployment. The government revenues for the next year’s budget is estimated at 2,673 trillion rials.