News ID: 154666
Published: 0802 GMT July 09, 2016

Remedies for economic woes

Remedies for economic woes

By Ali Qanbari

Iran's economy is encountered major challenges, including deep recession in housing and capital markets as well as the unemployment crisis.

The government of President Hassan Rouhani has adopted comprehensive economic plans to tackle these challenges.  In line with such plans, the government has set up a headquarters to pursue the policies of 'resistance economy' outlined by Leader of the Islamic Revolution Ayatollah Seyyed Ali Khamenei.

The Leader says resolving problems of recession, low domestic production, and unemployment fall within the purview of the resistance economy.

The headquarters realized that low productivity has resulted in recession and devised approaches to overcome this economic woe.

Nonetheless, such approaches pertain to long-term economic plans and will not impact economic variables in less than five years. Besides such approaches are not related to current global economic problems which affect our domestic economy.

In other words, economic variables such as foreign exchange rate, oil prices, the policies adopted by regional countries and major economies such as China and the US pose challenges to Iran's economy.

The government should prioritize financing the production sector to serve as a cushion to the blows of such external factors. Hence, plans should be drawn up to check the outflow of foreign exchange and provide manufacturers with credit facilities.

Likewise, Iran needs to play a leading role in setting global oil prices.

The direct impact of such variables indicates that the national economy suffers from dependency on oil revenues and low productivity. This indicates that no efforts should be spared to wean the economy off oil-based revenues.

Since our economy is still dependent on petrodollars, both long-term and short-term plans must be placed on the economic agenda. Consequently, apart from infrastructural reforms, the production sector must also be primarily funded.

Furthermore, Iran's economy is a part of the global economic puzzle. As a result, the sole focus on domestic economic woes will hinder efforts to achieve the policies of resistance economy.

Nowadays, the global economy is deeply influenced by gold, oil and bond markets, as well as policies adopted by major economies.

Undoubtedly, stability in Iran's economic growth is inextricably tied to entering the global economy as well as interpreting and mending the country's role in it.

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