Dr. Masoud Nili, Senior Economist

Policies delineated in Iran’s industrial development strategy are totally based on research results related to various parts of the country’s industries and mines sector. The goals set by that document are compatible with industrial needs of the country, on the one side, while showing how developed countries have reached their current advanced stage. What is understood from experiences of advanced countries is that they considered industrialization as a first step toward economic development and while availing of the growing globalization trend and preparing needed infrastructures, they also paved the way for more investments to be made by the private sector. Those countries not only took long strides toward industrialization, but set their goals first and targeted a predefined industrial growth rate for every year. In most cases, they even surpassed that target goal.

In Iran, however, the opposite has occurred. The industrial development strategy aims to create more jobs and the types of jobs that should be created have been specified, so that, industrial development should match presence of educated manpower in the labor market with a bigger share considered for women. However, it should be noted that in view of the sheer size of Iran industries and mines sector, there is no way but to move along policies considered by the industrial development strategy.

The document has clearly noted that in order to achieve a per capita income in 20 years which would equal to the current per capita income in South Korea, an annual economic growth rate of 8 percent should be realized. The trend should consider a major share for the industries and mines sector and during all those 20 years, a double-digit growth figure for the sector should be achieved. Therefore, industrial development of the country will continue based on the principle of externalism and centered on development of the private sector. However, most of those targets have been ignored right now with the main reason being the Dutch disease with which the Iranian economy is now grappling. Therefore, the private sector is currently under pressures due to excessive imports of consumer goods which are not matched by a parallel rise in the import of technology and machinery and is weakened more than before.