Economy, Domestic Economy

Falling Oil Prices: An Opportunity to Seize

Falling Oil Prices: An Opportunity to SeizeFalling Oil Prices: An Opportunity to Seize

The fall in oil prices should be seized as a good opportunity for the government to modify its administrative structure and reduce its dependence on oil revenues, said Yahya Al-e Es’Haq, the chairman of Tehran chamber of commerce, industries, mines, and agriculture (TCCIM).

Al-e Es’Haq reiterated that the management system in running a country should not be easily affected by price fluctuations of one commodity, saying the administrative resources and expenditures have been negatively affected during the past decades as a result of changes in oil prices.

The government, based on the 44th Constitutional Article, should stick to its four basic responsibilities namely policy-making, management, supervision, and support, according to Al-e Es’Haq who added “if the administration can efficiently perform these four duties in the Iranian calendar year 1394 (to start March 21), the private sector will be able to take over major responsibilities and the country will not be easily challenged by fluctuations in oil prices”.

The TCCIM deputy chairman also criticized the government for tending to reduce the country’s capital projects budget as soon as it faces budget deficit, ISNA reported on Saturday.

Ala’ Mirmohammad-Sadeqi criticized the different administrations throughout the years for seeing the capital projects budget as a source to cover the budget deficits in other sectors, saying if the lawmakers increase the capital projects budget and cover the deficits from other sources, economic activities will increase across the country.

He said the private sector will not be willing to invest in the construction sector if the capital projects are left unfinished, which will in turn lead to an increase in the unemployment rate.

Meanwhile, the TCCIM deputy acknowledged that the budget plan presented to the parliament for the next Iranian year (to start March 21) cannot be much helpful under the current circumstances when the oil prices have significantly dropped.

Mirmohammad-Sadeqi said a good source to compensate for the budget deficit is the value-added tax (VAT) which has rapidly grown during the past two years, while the tax revenues have also substantially increased.