If we want to
maintain our national and regional authority we must make bold political,
social and economic decisions.
By Dr. Mehdi Karbasian
In 1969 I was admitted into the university and it was decided that I
should come to Tehran from Isfahan. At that time, my grandfather, the late
Afzal, a well-known businessman in Isfahan Bazaar gave me some pieces of
advice. One of these advices became an asset in my life. He told me if you go
to college and get highly literate and even become a professor, it still would
not take the place of experience, because experience in life is as significant
and as valuable as knowledge.
When I was in college and later during work
life, I always accepted the topic of experience a major factor for myself. In
the 1980s, after the victory of the 1979 Revolution, an anti-capitalist and
anti-private sector mood was created by leftist forces, including the
Communists, the Tudeh Party and the Peopleís Mujahedin Organization (MKO), as
well as young Muslim revolutionaries under the influence of Dr. Ali Shariati.
Part of this situation was because some of the capitalists were dependent on
the monarchy, before the revolution.
This trend was escalated
after the outset of the imposed Iraqi war (1980), and in fact the state and
centralized economy were shaped due to the war, which at that time was
inevitable. The couponing system, the government controls, and the
nationalizations made by the Revolutionary Council created an atmosphere that
was not so much in line with the private sector. I remember that in the 1980s,
the Chamber of Commerce, Industries, Mines and Agriculture did not play a
major role in the economy and they were not even invited to attend
decision-making meetings. This was largely due to the Iraqi war.
during the reconstruction and reform eras, this line of thinking was mainly
prevalent among government managers, and there was no discussion at all about
supporting and developing open economy and the private sector. At the same
time, large units were in the hands of government agencies. Since the early
1990s, a group of retirees of institutions more or less entered the economy
and they had become stronger. The Mostazafan (Underprivileged) Foundation, the
Martyr Foundation, the Executive Headquarters of Imam Khomeiniís Orders and
Astan Qods Razavi (Razavi Holy Shrine) gradually grew and played a role in the
countryís economy, but the private sector was not able to operate with that
We need to know that a strong, healthy private sector can
support the country and let the government gradually return to its policy
making and monitoring job and let the cycle of the peopleís economy to turn.
Quick decisions were made
due to foreign exchange shortages in 1372-73 (1993-94) and in 1374-76
(1995-97), instructions were issued that were more for controlling the economy
and this trend was further strengthened. Of course, the late Akbar Hashemi
Rafsanjani did not believe in the state control of the economy during his
first term as president, but in the second term, that is, from 1374 (1995)
onwards, the state economy gained more power and government intervention
increased and the private sector could not recover.
This trend continued until 2001 and between 1380
and 1384 (2001-05) was the best period for the economy which also set the
private sector in motion. During this time till 1383 (2004), some hard
currencies were transferred to Iran by Iranians residing abroad. Both the
stock market and housing sector were boosted. This left a big impact and
caused the prices to change and the stock market to boom. The private sector
was gradually standing on its feet but its status was weakened in the Ninth
and Tenth Governments. Of course, some grew up in these two governments, part
of which were the private rentier sector, namely those who were able to take
advantage of concessions by the government and institutions.
Clear that the government supported military
institutions and funds by donating property and bringing banks into grand
investment, which weakened the newly revived private sector. During this
period, the economy was largely out of the government hand and fell into the
hands of government linked corporations (GLCs), and some government units that
were transferred in the name of transfer and by granting 5 or 10 percent in
the stock market came out of the umbrella of regulatory agencies such as the
National Inspection Agency, Audit Court and the government itself and were
governed by commercial laws. It was said the stock exchange will oversee them
but the stock exchange was never able to deal with them nor had it the power
to dismiss managers, referring a case to the court, and so on, because it did
not have the power.
The GLCs were
involved in the contracts and took over the affairs in the contracting sector,
entered the realm of large corporations, and the situation of the private
sector and the economy became unfavorable, as corruption went high in some
GLCs. Naturally, when it is a state-owned company, the regulatory system can
control and monitor, but this is not possible in GLCs, while the stock
exchange too did not follow the rules. It is not doing it even today because
it canít intervene, and Iím skeptical that the stock market can be
Then we come to
the Eleventh Government, which focused on the private sector as a pivotal
policy. During this period, changes took place and the Chamber of Commerce,
Industries, Mines and Agriculture, especially the Tehran Chamber of Commerce,
entered the scene as a government consultant. Of course, in some cases the
government would naturally follow the advice of the private sector and in some
cases it would not, but in any case, a policy starts in 1392 (2013) and
continues until 1396 (2017), and the private sector is strengthened and the
Iran Nuclear Agreement (known as the Joint Comprehensive Plan of Action) also
helps the economy get tranquil. In the next stage ties with Europe are resumed
and exports get a boost. On the other hand, although banks are not very
active, it gets easier to move money, the price of money gets better, the
exchange rate and the commission rate ranges from 10-15% to 2.5-3%, the
country attains some calm and Investment gets moving.
after failure of the JCPOA economic problems occur and as of almost middle of
2018 when the US president withdrew from the JCPOA and imposed new sanctions,
the government too in an unprofessional decision, sets the US dollarís rate at
42,000 rials and thus foreign exchange becomes a security matter. This led to
qualified and unqualified applicants both register orders and this led to
widespread corruption. In this case, those who were involved in corruption are
not the only ones to blame, but those who decided to register the order,
because there was no control at that time. It is because of these directives
that the real private sector is less inclined to invest, since it is worried
that they will wake up in the morning and see that a new directive has been
issued. Such directives are consistent with the Ninth and Tenth Governments.
The Eleventh Government strongly criticized the actions of the Tenth
Government, but some of the work done in the Eleventh Government upset the
balance in the economy.
This trend has intensified since 1398 (2019),
and now with the outbreak of the coronavirus the economic situation has
worsened. The first point is that the budget the government has sent to the
Parliament for 1399 (2020/21) was unprofessional and the income figures were
not close to reality. At the same time, the European Union has treated Iran
unfairly for the third time. Once under Mr. Hashemi Rafsanjani, once under
George W. Bush, who called Iran the axis of evil, and once after the United
States withdrew from the JCPOA, Europe followed the US sanctions. All of this
has caused problems for the private sector, which had just started to move on.
But in the case of coronavirus, the virus has
caused some of the domestic consumer production, such as food to receive
support but many other products have had problems, especially those areas
where production does not match consumption.
Export prices are now more or less faced with
costs such as the cost of moving foreign currency and transportation. Here the
government must intervene and help exporters turn the wheel of production.
This is an important point that the government must accept. Unfortunately, the
government has failed to give the export awards it had promised.
The Islamic Republic of
Iran, which is currently facing the problem of coronavirus, liquidity and
foreign currency supply, must provide basic assistance to exporters because it
helps domestic production when it helps exporters, and this is in the interest
of the consumer, as the finished cost is reduced and the drop in foreign
exchange revenues of oil is compensated.
we have eliminated the factor of experience from our calculations and actions.
We have experienced some cases several times and we continue to make the same
mistake: Wrong experience!
Another issue is that we did not use the
experience of countries like Malaysia and Turkey, which are also Muslim
states. During the Ninth and Tenth Governments, it was decided to implement
the Chinese experience. That is, while companies are not state-owned, they are
controlled by the government. It is true that Chinese companies have been
created in the form of GLC but their behavior and management have a special
formula, but in this case we did some work and abandoned some other part.
In fact, the GLC
is now a competitor to the private sector, and they are not being monitored by
the public sector. I believe that some of their decisions would lead to
corruption and they do not serve the national interest. Now that the country
is faced with coronavirus, apart from the human toll and the economic crisis
that we hope will be resolved as soon as possible, given the decree the
Supreme Leader has issued to the heads of the three powers they are expected
to be more sympathetic and put aside their differences. Based on 40 years of
experience, they are expected to make bold decisions and know that in the
current juncture, the executive branch alone cannot solve the problems, and
some of our problems cannot be solved until our international interactions are
If we want to
maintain our national and regional authority we must make bold political,
social and economic decisions. We need to know that a strong, healthy private
sector can support the country and let the government gradually return to its
policy making and monitoring job and let the cycle of the peopleís economy to
turn. At the same time, the shadow of politics on the economy should be
diminished, and politics should return to its place. Meantime, the private
sector, in the form of the chamber of commerce, should reduce criticism,
speech, and statements, and offer bold practical solutions. The government,
the heads of the three powers and the ruling establishment must accept the
private sector as an honest advisor and give it responsibility.