The Forum for Partners in Iran's Marketplace
 
 
 
 
 
 
 
 
 
 
 
     

March 2004 / No. 28


Industry

First Finance, Then Renovation

Abbas Taleghani; Wood Industries Expert

At present, the utmost need of the country’s industries as the main driving force behind job creation and economic prosperity is shortage of liquidity. As long as the need of the industrial sector has not been met through various methods, some of which would be explained below, nobody could be optimistic about large-scale development projects for the sector.

During recent years that liquidity has accumulated in such fields as commercial and brokerage activities for various reasons, the industrial sector is in dire straights and legal and systematic expectations of governmental organs from the sector have added to its misery. Various pressures for exacting insurance fees, taxes and duties from the sector as well as obliging industrialists to repay loans extended by banks to promote their production activities, has brought the industry to the brink of a full-blown crisis. On the other hand, under conditions prevailing immediately after the end of the Iraqi imposed war, the industrial sector was spared the much needed support that it was badly in need of.

Experiences gained in post-war Japan proved how the industrial sector in war-torn Japan was boosted to the position of an important industrial country through perseverance and hard work of the Japanese industrialists, on the one hand, and by considering various kinds of exemptions as well as governmental finance, on the other hand. Our industrial sector was also in need of similar supports. Now a new plan has been considered for the renovation of the Iranian industrial sector. It should be noted that only when an all-out liquidity shortage crisis engulfs the sector that one can talk about renovation or similar projects.

The industrial sector is founded on four main pillars, that is, machinery, manpower, raw materials and capital. Shortage in any of the above factors would lead to stagnation of the industrial activities. At present, the industrial sector is facing severe liquidity shortage. Therefore, while attending to this problem, other problems of the industrial sector should be rapidly addressed. For example, mechanisms should be thought for repayment of the industrial sector’s liabilities in return for various duties, taxes, insurance and bank facilities; so that, the sector would be invigorated and capable of organizing its payments in addition to contributing to the country’s prosperity. The fact that bank facilities including loans have not been used correctly in some instances and there have been profiteering, need adequate study; so that, honest producers that can account for a large part of the country’s non-oil exports would not come to harm.

In short, in view of the dilapidated machinery and the old systems governing the industrial sector, industrial renovation is a must in our country. However, the first priority would be to solve the problem of liquidity shortage in the sector because no renovation plan would work for an industrial sector that is short of money.

 

Subscribe to
IRAN INTERNATIONAL

CURRENT ISSUE
   
  March  2004 / No. 28