We Need to Make Up Our Mind
If we want to think of other economic capacities instead of oil, we
have to make all the necessary preparations, and if the sanctions
cannot be thwarted domestically at least there will be no new
problem for producers so that we can pass through this difficult
In the calendar year 1397 (2018/19), a number of major shocks hit the
Iranian economy: The US withdrawal from the Iran Nuclear Agreement (formally
known as the Joint Comprehensive Plan of Action) led to new sanctions and
the governmentís decision to multiply the forex rate led to a state of
security over the foreign exchange market; on the other hand, the
contradictory and problematic circulars and directives also created a state
of confusion in the market and made economic decision making a difficult
The new conditions led to the empowerment of the brokers and speculators so
that personal interests of certain individuals along with some wrong
economic decisions by the government imposed heavy costs on the economy.
Putting all this together, it is clear what a crisis and big problems the
Iranian economy wrestled with and the pressure that was put on the people
came out of these factors.
The problem of sanctions has remained in place over the past months, but
significant changes were made in other influential factors the results of
which are obvious today. After last yearís mistakes, the government has
managed to fix the foreign exchange rate at a stable level with no shocks
and security approaches. On the other hand, contradictory and problematic
guidelines have also been significantly reduced. Although some decisions
still hurt exporters and cause them problems, in a macro point of view many
of these decisions have been cut and the stability that the Iranian economy
is facing today comes from changes in these factors.
It should be noted, however, that despite some problems being resolved, many
indicators still face problems that require macro planning. Inflation in the
Iranian economy is still at the 40% range which means commodity prices
continue to put serious pressure on people. To control the foreign currency,
the contractionary policy of imports is projected to be one of the options
available during the sanctions, but perhaps a little change in this area
will help the economy. The government should use the views and capabilities
of experts and make the best decision by taking into considerations all the
On the other hand, for the past 40 years, Iran, for various reasons led by
the sanctions, has been facing severe problems in inflationary recession,
and each time has been trying to find a coherent solution to overcome them.
In addition, the experience of foreign countries that have faced
inflationary stagnation in the past decades can also help us to find new
ways to cope with the conditions. There is no doubt that going through the
inflationary recession is a serious matter, but using the expertise and
opinions of academic circles will help the government.
For example, the foreign exchange which faced serious problems since months
ago, eventually led to relative market stability through consultations made
with experts and economic activists. We must also note that the United
States and others who have sanctioned Iran are becoming smarter and more
assertive, and any decision we make can be countered by their decision.
Therefore, it would be best to use specialized committees and workgroups
that work seriously in this area and provide the best solutions. We have to
admit that employment creation is important; we need to make the most of
todayís capacity to generate employment.
Although at times of recession one cannot expect new investment, under the
status quo measures can be taken to increase employment. Unemployment can be
reduced by supporting existing manufacturing units and providing them with
productive plans. Managing subsidy resources and moving in a direction that
the government subsidies would go to real needy is also crucial in this
juncture of time. Because on the one hand, the government has less financial
resources and on the other hand, the pressure that has reduced the
purchasing power of different classes of people has increased. So how to
manage the subsidy resources and allocate them to the target population is a
key issue in managing the current situation in the country.
In spite of the efforts we have made in recent years, we have overlooked
many capacities. One of these options is the capability of Iranians abroad.
Today we have Iranians in many countries around the world who have great
capital and are passionate about their country. If their presence in the
country were to be met and their investment capacity and technical know-how
were to be utilized, there could be a great deal of hope to create huge
capacity in Iranís economy. Some developing countries have pursued such
programs in previous years, and a similar strategy can be pursued in Iran
In recent years, investments have been made in some sectors to show what
capacity exists in the Iranian economy. One of these areas was mining. We
were importers of many minerals in the early 2010s, but with the investment
made in this sector today we are exporting many of these minerals. However,
sanctions and some wrong decisions, especially in 1397 (2018/19), created
problems in the production and export process that eventually led to
pressure on economic activists.
We need to make up our mind: If we want to think of other economic
capacities instead of oil, we have to make all the necessary preparations,
and if the sanctions cannot be thwarted domestically at least there will be
no new problem for producers so that we can pass through this difficult