Jahangiri opined that the important issue in future policies was taking advantage of advanced industries and cutting-edge technology.

Due to the presence of the Minister of Industries and Mines, the fourth conference of industries and mines research and development centers was fruitful for reporters who had come to grill Esshaq Jahangiri in such a way that it might not have been so for the participants of the R&D conference.

Jahangiri, who had just came back from a trip to Austria—to take part in a meeting of the United Nations Industrial Development Organization (UNIDO)—said, "Competitiveness, constructive interaction with the world and expanding the country’s economy to create a competitive industry should be considered as characteristics of the domestic industrial sector. For this reason, improving prices, quality and technology of produced products would require serious movements. During the past 20 years, the country’s total non-oil exports have increased from $600 million to $6 billion. Although the growth period has been long, the figure is desirable. Share of industrial exports also is favorable and related figure is currently 15%."

"Countries that started their privatization drive simultaneous with us have attained a figure of about 70-90 percent for share of non-oil exports, while we are far from such a figure. Of course, the Fourth Economic Development Plan has paid special attention to developing non-oil exports as the main policy of the government and we expect non-oil exports to reach $15 billion by the end of the Fourth Economic Development Plan, $12 billion of which would pertain to industrial exports. If we manage to increase non-oil exports to $4 billion during the current Iranian calendar year (started March 21, 2003), realization of the $12-billion figure (by the end of the Fourth Plan) would be a great achievement. Of course, 65-70 percent of the country’s industrial exports would be dependent on raw materials without processing," he added.

The minister noted that based on the classification made by the industrial development strategy, in the sector of medium industries with medium technology, 29-30 percent of the country’s industrial exports were to be allocated to this issue, of which about 1% would be allocated to advanced industries while the global trend for advanced industries is on the opposite of our country and supply of such products to the global markets was rapidly increasing.

"It is a difficult job. For an economy whose annual growth has been 2-3 percent during the past 20 years, achieving an 8% growth figure should be accompanied with annual amassment," he noted.

The minister proposed two methods for the realization of the growth figure.

"The first method is creating new capital like developing factories, while the second one is increasing productivity of production factors by taking advantage of physical and human resources. We are facing shortage of resources with regard to capital amassment. Clear policies for empowering the private sector should be the focus of government’s attention. The private sector, on the other hand, must provide grounds for empowerment, so that, it could put potentials into action. On the other hand, we would need considerable foreign investment to realize the growth figure. If the industrial sector intended to achieve this growth, those conditions should be provided. Another important sphere that should change is productivity of the production sector. During the past 30 years, based on figures released by the Central Bank of Iran as well as the Management and Planning Organization, share of production factors in economic growth has not been positive and it has been even negative in some instances," he said.

Jahangiri proposed two important scenarios for increasing productivity of production sector. He said, "Advanced countries believe that up to 50% of the economic growth could be attributed to production factors. The figure has even reached 30% in East Asian countries. We must certainly project a new mechanism and make it part of our economic system. For this reason, an increase in revenues would not be sustainable without a corresponding growth in productivity factors and the industrial units must pay attention to this point."

Competitiveness, constructive interaction with the world and expanding the country’s economy to create a competitive industry should be considered as a characteristic of the domestic industrial sector

The minister referred to the declining trend of the industrial indexes and said, "We have reminded rapid decrease of the industrial indexes in the industrial development strategy. If this trend continued, we would be facing crisis soon. For this reason, improving production lines, streamlining the production process, reducing wastes, consumption of raw materials, reduction of energy, uplifting quality of produced goods, manufacturing products to satisfy customers’ tastes and introducing competitive prices are other factors that would expand domestic and foreign markets of our goods. We have proposed that research and education should take place in the above fields." Referring to close relation between university and industry, the minister added that the issue had been on his mind for a long time.

He said, "Industrial corporations need serious reforms. Many of our industrial corporations have not yet come to the conclusion that establishing research and development centers is a necessity. University, industry and a center that could link them is a main challenge for the ministry now. Research and development centers can work as think tanks for corporations and increase their productivity. We have taken good steps in this regard. At present, we have issued permits for 1,000 research centers and there are 60,000 corporations in the industrial and mines sector, but the figure is still low. If we encouraged these centers or, at least, spent 2% of export profits on research and development, we would rapidly progress."

"Although research and development centers are foci of guidance, a corporation which is faced with myriads of exogenous problems cannot be expected to move ahead. For this reason, selection of directors, taking advantage of specialized manpower, as well as attention to research and development has been stressed by the country’s industrial development strategy. Such issues are connected to consumer industries, long-lasting and short-lived industries as well as intermediate and capital industries," he noted.

Jahangiri opined that the important issue in future policies was taking advantage of advanced industries and cutting-edge technology.

"Iran can progress in this field because other countries do not have long records in this regard either. We enjoy capable manpower. Therefore, advanced industries must be given enough attention. Another important issue is small and medium industries and research and development centers must work on this issue. Establishing research and development is a serious necessity and should be used as a center for creating thought. Of course, direct and indirect government support is important for the establishment of research and development centers in industrial units, but establishment of laboratories, educational centers and technology parks are among direct governmental supports while exemptions are kind of indirect supports that have been given priority," he noted.

After the conference, minister of industries and mines was grilled by reporters. In response to their questions he referred to the following points.

If we manage to increase non-oil exports to $4 billion during the current Iranian year realization of the $12-billion figure by the Fourth Plan's end would be a great achievement.

Asked if it were not better for the ministry to oblige industrial centers to establish research and development centers so as to keep pace with the international market, Jahangiri said it was a necessity and every corporation without a research and development center would be doomed to failure in the long run.

A reporter asked, "You mean you are completely in favor of automobile imports?"

The minister responded by saying, "I am not against it."

"The plan has considered an 8% growth figure for economy and a 14% figure for the industrial sector. I, however, think that the figure must be reviewed because we have considered a 10% growth rate in the country’s industrial development strategy. Anyway, a general consensus among all major bodies including management and Planning Organization, Central Bank of Iran and Ministry of Industries and Mines is necessary in this regard that the growth rate of the industrial sector must not be ahead of overall growth of the economy. Regarding qualitative and quantitative increase in the industrial production during the Fourth Plan, he said, "The Fourth Economic Development Plan is supposed to cause a rapid growth in the economy. All officials have braced for continuous growth during the next 20 years. Talking about an 8% economic growth rate is easy, but its realization would be a hard task. There are few countries that have attained such a sustainable growth. First the tools must be provided. For example, the government has to export $12 billion non-oil products in (the Iranian calendar year) 1388 (2009-2010). Those products should enjoy up-to-date technology. Therefore, we have said that the approach to the industrial sector must be competitive. We have to interact with the world and take advantage of modern technologies to be capable of presenting our goods at a competitive price. Many regional contracts have been signed without considering tariffs. We practically are not members to any regional pact, except the Economic Cooperation Organization (ECO). We have problems for joining such organizations. The industrial sector can contribute substantially to the realization of the 8% economic growth. A 14-percent figure has been considered for the industries and mines sector by the Fourth Economic Development Plan and we are negotiating to decrease it. Out of the 8% economic growth rate, 5.1% would be realized through growth in productivity of production factors. That growth was not positive in preceding years and something must happen within economic corporations to bring about a positive growth."

He said, "We announced to corporations last year that they should engage in free competition and trade with other countries. Therefore, we completely removed non-tariff obstacles. Now those corporations are complaining that foreign made goods are present in the Iranian market and they have to compete with them. If they failed inside the country, they would not be capable of competing abroad. For this reason, one of the serious measures that should be taken by those units is to develop markets. We must negotiate through Foreign Ministry to make this possible. We have conducted successful negotiations with authorities at Foreign Ministry and they established an economic department in the ministry. The Foreign Ministry is studying countries whose trade balance with Iran is negative. On the other hand, production units must get attuned with modern technology, produce high-quality products and reduce prices. We want to move toward an industry that would reflect the country’s hidden advantages. The brunt of the 8% growth would be born by the industrial sector. Of course, the service sector would play a substantial role. When we talk about services, some people think about brokerage. However, when a country becomes industrialized, technical and engineering as well as insurance and financial services are established.

One of the challenges for the next 20 years is the young population. Both women and the university graduates would be seeking jobs during next 20 years and the industrial sector must meet their needs. Given the country’s economic capabilities, this would be possible. The reason is that a strong will has been formed among high-ranking officials to push the country toward industrial development."