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July 2013, No. 67


Economy

Major Challenges
Facing the New President


The new president should answer what mechanisms he would employ for the reform of such a structure; a structure which turns such wealth into dissatisfaction in the society.


Mahmoud Eslamian

According to a simple management rule, 20 percent of the defects cause 80 percent of the problems. It would be better if the 11th president offered his plans for passing through the problems the country is facing.

The major critical challenges are currently as follows:

1- If you speak to the people in the street you will find out that they are generally concerned about two issues and seek their solutions.

a) Inflation: In recent years inflation has always been two digits and according to a report released by the Central Bank of Iran inflation in the calendar year 1391 (ended March 20, 2013) the inflation soared to 31.5%. The report however has its own critics!

b) Unemployment: A report published by the Islamic Republic of Iran Broadcasting (IRIB) referred to creation of job opportunities last year as meager. The government however rejects the report. What is important is the need for jobs and the concern of millions of the youth looking for employment opportunities. Jobs can build confidence in the society and unemployment is the source of numerous cultural abnormalities.

2- Government Bureaucracy

During the past eight years, over 700 billion dollars have been earned through oil. About 1000 thousand billion rials of the units under Article 44 of the Constitution have been sold and a similar figure has been fetched through saving bonds. Such revenues have been unprecedented in the history of the country. The output of this wealth has been nothing other than inflation and stagnation in the society. The new president should answer what mechanisms he would employ for the reform of such a structure; a structure which turns such wealth into dissatisfaction in the society.

3- Business Environment

Economic growth is in need of constant improvement and business environment. Despite the presence of immense God-given resources, intelligent and initiative manpower, standing in the 144th place among 183 countries in business environment is not acceptable. Until such an atmosphere is not reformed in terms of structure, it is unlikely for economic growth to be observed. This issue and its reform is a prerequisite for growth. What are the next president's plans to solve this issue and improve Iran's ranking at international level?

4- Budget

During recent years we have been witness to the heavy growth of current budgets and half-finished development projects. In the calendar year 1391 (March 2012 March 2013), some 970,000 billion rials of the budget were realized of which 110,000 billion rials were allocated to development projects. Many of the development projects are non-economical. Even if they are economical they could not be justified with an annual allocation of 5 to 10 percent. In the meantime, many of the important plans of the country are in a state of uncertainty. How such a situation could be organized?

5- Government Debts

Figures released on government debts to the banking system, contractors and, the Social Security Organization are a source of concern. Increase in liquidity from 680 thousand billion rials in 2004-2005 to 4,440 thousand rials in 1391 is also important.

What would be the new president's program for controlling liquidity which is the root cause for inflation and for coping with debt management?

6- Statistics and Information

The people have a right to know. The people of Iran in the past 34 years have shown that they would defend the Islamic Revolution by all means. With such a people honesty is a principle. Contradiction between government statistics and other centers would cause some sort of mistrust. On the other hand, not knowing the truth not only would not help solving the problems but would make them more complicated. It would be better if the new president expressed his views on the power and authority of official statistics centers.

Precise and fair expression of problems and presentation of practical mechanisms in addition to conveying more information to the society would also keep people's expectation at the level of realities and thus maximum advantage could be taken of people's participation. Dealing with topics such as increasing the amount of subsidies with regard to the issues mentioned is somehow escapism and deepening of the problems. Iran is a country with infinite material and moral capital and has experience in going through important crises. Sound understanding of the issues and benefiting from public participation is a basis for leaving behind the problems.

 

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  July 2013
No. 67