The pattern of declining oil prices in the global market, and its far reaching effect on the Iranian economy, has again alerted “us to our reliance on oil revenues, and the futility of this endeavor; it is time, once and for all, to turn a blind eye on income from oil” according to economist, Amir Nikruyan, writing for the Persian daily Donya-e Eqtesad.
Despite many senior officials, economic and political experts supporting this view, it has never been implemented. As soon as fluctuations appear in the oil market and foreign exchange earnings become unstable, the question arises as to what should be done, although these fluctuations are nothing new and eventually stabilize.
From this vantage point, oil resources can no longer be deemed the privilege of the country, and are not a guarantee. On the other hand, with the water scarcity crisis and new environmental concerns, the agricultural sector’s prominence in the five-year development plans has diminished. Farmers are not interested in the sector, and thus agriculture is losing its shine in the country’s economy.
Agriculture accounts for about 15% of the GDP, but it enjoys less than 5% of the country’s investments. Officials should pay particular attention to this sector, for it is in need of massive financial support to survive future crises.
Industry as a whole is not faring too well either; neither within the country or internationally. Lower production costs, due to low-cost labor and low cost of finished goods in other countries does not give Iran a competitive edge in the global market. Here again, there does not appear to be an advantage to be gained toward improving the economy.
Untapped Resource Gathering Dust
In 2013, 1.2 billion tourists traveled across the globe, spending a hefty $250 billion internationally, head of Iran’s Cultural Heritage, Handicrafts and Tourism Organization (ICHHTO) Masud Soltanifar said, referring to the statistics provided by the United Nations World Tourism Organization (UNWTO). Iran’s contribution in its GDP from travel and tourism during 2013 was in the region of $13 million (at market rate) and in 2014 it received approximately $22 million.
A glance at the figures makes it clear that Iran has a high potential to attract tourists, while other countries are far ahead. Take Lebanon for instance: it has constantly been suffering wars and unrest, but in 2010, 37.6% of its GDP was earned through tourism; while Iran’s share was a mere 3.9%.
Iran’s competitive advantage in tourism continues to be ignored. No considerable measure has been taken to take advantage of touristic potentials. Concrete decisions to prioritize tourism are postponed, rapt in endless, inconclusive negotiations. The friendly approach of President Rouhani and the 11th Government toward the leading countries brought about a surge in tourists. Even though 2015 has been named the “year to visit Iran”; it is far from enough. Tourism needs more support to flourish.
Attracting tourists, is the single most essential solution to delivering the economy out of the current regression, and hence should be of major concern for tourism patrons and officials alike. Since tourism can boost the economy and improve political and cultural interactions with other countries, a multilateral approach should be taken, and officials from all political factions should take part in the development of the country’s tourism.
According to the UNESCO, Iran is among the top 10 countries with regards touristic attractions and cultural heritage. Taking advantage of this capacity requires an expert working group in the cabinet, responsible for devising plans and programs on tourism, in consultation with relevant domestic and international experts, under ICHHTO supervision.
The president’s emphasis on tourism development and related industries during most of his provincial trips is a strong indication of the government’s awareness of the sectors great significance. However, unless a special working group is introduced, under the president’s own authority, initiatives will result in the same inconclusive ends seen in the past. Such a working group can create jobs, boost foreign exchange earnings, and improve international cultural and political interactions to a great extent. The group can improve tourism infrastructures, such as provincial lodgings, and thus step beyond words and mottos.
The work group can magnify ICHHTO’s solitary voice, and can share blame and responsibility of the beleaguered organization. The tourism industry must without a shadow of a doubt receive the support of all relevant organizations, and by its very nature cannot flourish in isolation.
