Laws, rents, banking and tax system, challenges of fulfilling the slogan of the year

Laws, rents, banking and tax system, challenges of fulfilling the slogan of the year
  • 2021-04-13
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Amending the laws, eliminating cumbersome regulations and rents, resolving currency problems, trying to invest, reforming the banking and tax system, and linking the domestic economy to the global economy are among the things that a number of Isfahan economists believe in fulfilling this year's slogan of "production." "Supports, obstacles" are essential.

According to the International Iranian Stone Exhibition, the realization of this year's strategy of "production, support and disengagement" and the leap of production and its full realization, according to experts, requires the unity of all forces and the necessary support from the production sector.

Comprehensive attention to the issue of production, the main pillar of development and job creation has led to the solution of economic problems and subsequently the prosperity of the country's economy, which in several consecutive years named the Supreme Leader of the Revolution the slogan of the year with a focus on production.

The Leader of the Islamic Revolution since 2016 has been chanting the slogans of the year with the themes of "Resistance Economy, Action and Action", "Resistance Economy, Production and Employment", "Support for Iranian Goods", "Production Prosperity", "Production Leap" and this year, respectively. Named "Production, Support, Barriers", which shows the importance of this issue.

According to the Deputy Minister of Economic Affairs Coordination of the Ministry of Interior, there are currently one thousand and five approved towns and industrial zones in the country, of which 823 towns and industrial zones have been activated with the actions and approvals of the production facilitation and removal of production barriers. There are 46,500 industrial units located in these industrial areas, of which 37,000 are active units (up to 80%) and 743,000 people are employed in these units, and 9,200 industrial units are located in towns and industrial areas. (Equivalent to 20%) are inactive and according to initial estimates, if these units are activated and revived, 192,000 new jobs will be created.

Isfahan province with a population of more than five million people, more than 9,000 small and large production units with a capital of 221,000 billion rials and employment of 263,000 people, about 840 mines in operation with an investment of more than 10,000 billion rials and about It has 180,000 guild units.

Accordingly, many economists believe that in order to fulfill this year's slogan, the needs and necessities of the production sector must be taken into account, and gradually, by solving the problems facing it, more fundamental steps must be taken for the development and progress of the country.

Transparency of laws, efficiency of institutions and elimination of rents

A member of the faculty of the Faculty of Economics, University of Isfahan, said that transparency in property rights, agility and efficiency of government agencies, transparency of laws and elimination of rents from the national economy are necessary for the realization of the slogan of the year.

Mohammad Vaez added: "Iran's economy has had low growth in the last three decades, despite its many achievements in the fields of technology and public welfare and other sectors."

The professor of Isfahan University added: "In other words, regardless of the years such as 1397 and 1398, when Iran's economic growth was negative due to the imposition of oppressive sanctions, the average growth in other years when the economy was not directly affected by sanctions was positive." Low rated.

He said that the average annual economic growth rate of Iran in the last three decades was about 2.5 percent, he said: it should be emphasized on the factors that affect the trend of Iran's economic growth rate.

The economist added: "The factors that affect the short-term behavior of Iran's economic growth rate, such as economic sanctions in 1397 and 1398 and the decline in world oil prices in 1365 and 1367, are clear and indisputable."

Iran's economy under the influence of structural and fundamental factors

According to him, Iran's economic growth rate in the course of its trend is influenced by a set of structural or fundamental factors, some of which include institutional and environmental constraints in converting the knowledge reserve in the Iranian economy into knowledge-based goods.

"Comparing the statistics of stored knowledge in Iran's economy with other economies on an international scale shows the high position of Iran's economy, which does not mean that Iran is the main center of knowledge production in the world, but it means that Iran's economy in The region of Southwest Asia has probably acquired the highest stored knowledge, which on a global scale, Iran's rank in knowledge production is around 15, which is different in different areas of knowledge.

Asked why the Iranian economy could not produce knowledge-based goods in proportion to the stored knowledge, he said: "This is due to the set of shortcomings and limitations that exist in the business cycle in the Iranian economy."

The professor of economics at the University of Isfahan added: "For example, property rights are not well defined or are not observed where they are defined, and the tax authorities do not perform their duties in a transparent and predictable manner, or there are serious shortcomings in this regard."

Pointing out that ambiguities in property rights are a serious obstacle to group economic activities, he said: "A large part of our national economic capital in the form of small and personal activities such as shopkeeping or agricultural production in small fields and other jobs." goes.

The preacher cited another limiting factor as the ambiguity and length of the operation process in the relevant bureaucracies: In short, the private sector in the Iranian economy conducts its operations easily on matters pertaining to the private sector itself, but as soon as Deal with governance issues such as document transfers, tax settlements, legal disputes, and other ambiguities, slowness, and various transaction costs.

The need to facilitate the activities of the private sector

He reminded: in other words, government departments do not have the necessary agility and efficiency to facilitate the activities of the private sector, such as the possibility of changing the register of a deceased and preparing legal documents related to the register or the possibility of obtaining a municipal permit to build a building in a week or It is not possible to resolve a legal dispute between a set of partners in a company regarding the determination of a share fee in one month.

The economist cited a lack of agility on the part of the governing apparatus as a brake on private-sector activities, saying: "Another difference is the existence of institutionalized rents due to the exchange rate being double-priced or the two-rate cost of banking facilities being a stimulus for the sector's rent-seeking." Has been privatized.

He added: "The existence of such rents has led to bargaining to achieve, instead of stimulating the private sector in economic activities, gaining profit through the expansion of the activity market, innovation and innovation, raising production levels, improving productivity and the like." The rent becomes more.

Professor of Economics, University of Isfahan, pointed to the exchange rate of 4,200 tomans per dollar in 1997 and said: "In this regard, a number of livestock and livestock farms instead of trying to produce more and better livestock and poultry To take low-priced quota inputs and sell them on the open market.

The need to eliminate rents

The preacher stated: "According to this, the design of rent-seeking grounds in the national economy is a rational condition for the tendency of economic actors to productive and innovative activities."

According to him, in general, the most important examples of rent-seeking in our national economy are rents due to the double pricing system, such as the double exchange rate or the double banking facility rate.

The economist added: "Rents due to land and rents due to money creation, which are more or less paid in the economic literature taught in Iran and the first type of rent, but unfortunately the second and third types of rents are almost not paid."

He continued: "This is while the second and third type rents, in their place, divert economic activities from productive activities to rent-seeking activities."

Economic growth indicates the rate of increase in production and the factors affecting it

A member of the faculty of the Faculty of Administrative Sciences and Economics of the University of Isfahan said: "In economics, economic growth is a word that we use primarily to increase production and it means how much production increases in total and what factors affect it." it is affect.

Shahram Moeini added: "Before we say what factors increase production, it is necessary to remember two points. First, any increase in production does not mean an increase in welfare."

He pointed to an example in this regard and said: "For example, now in Iran we can produce more cement and bricks or in some countries a lot of expensive cars, but the reason why this is not done is related to a key issue of demand."

The economist added: "With more production or increased construction, the welfare of society will not be provided because only certain people are in demand for some products."

He reminded: "In this regard, the most important point is to examine in each area what is a rare element that can lead to increased production."

Professor of Economics, University of Isfahan, pointed to the agricultural sector as an example and added: In this sector, given that increasing production is good, but the key issue in this area is water, because we have enough land and labor, but in water supply We are facing a problem.

He pointed out: "In this regard, technology must be improved to use it to improve the need for water to a very economical level so that we can produce more products with a small amount of water."

According to Moeini, according to growth theories, in order to increase production and economic growth, only encouraging people will not remove obstacles, and in addition to the issue of demand, any effective increase in production will not lead to prosperity.

The faculty member of the Faculty of Administrative Sciences and Economics of the University of Isfahan reminded: In some products, there are rare elements as barriers to production.

Accumulation of physical capital and technology, necessary to increase production

He emphasized: the need to increase production is to pay attention to the two issues of physical capital accumulation and technology.

Moeini continued by mentioning an example: for example, in petrochemical products that there are enough customers in the world, and even if more than 2 are produced for the current amount, there is still demand, but it should be noted that in some countries there are special products for There is a market, demand and customer, and based on that, something must be done to attract customers in that sector as well.

He pointed out: "In this regard, physical capital should be provided, including equipment and machinery, in order to strengthen and increase the country's export capacity and currency, despite having food and raw materials that the government now provides to producers at world prices."

"Although we do not have a problem with land and labor, in addition to physical capital and equipment, we need the relevant technical knowledge to produce some products, because other products may be produced in the world that are more cost-effective and attract more customers and applicants," he said. To have that we have to enter the knowledge of it.

He added: "In this regard, we have to provide and purchase part of the knowledge through research and development and another part using the knowledge of foreign experts."

Providing equipment and technical knowledge requires foreign exchange earnings

Professor of Economics, University of Isfahan added: In order to increase production and to provide physical capital and equipment, we need foreign exchange earnings for the import of parts and technology.

According to him, these two key factors do not allow production to grow rapidly in any country in the world, because increasing production requires the accumulation of physical capital by importing machinery and equipment, which requires the supply of dollars and currency.

Moeini pointed out: The need for technical knowledge and technology to import and use factory machinery and equipment in order to produce the best product at the lowest production cost.

He added: "We are facing difficulties in supplying these two positive elements as obstacles that need support and support, because the cessation of importing parts began when the country had problems in foreign exchange earnings from oil."

The economist emphasized: without these two key elements, encouragement and persuasion can not remove obstacles because modern technology and currency in Iran is scarce and without it, it is not possible to increase production and everything is limited to these two elements.

Reform of the banking and tax system Elimination of cumbersome regulations necessary to fulfill the slogan of the year

The director of the International Economics Center of the University of Isfahan said: "Efforts to invest, attract public deposits, reform the asset market, banking and tax system, the relationship between the domestic economy and the global economy and eliminate cumbersome regulations in the production system are necessary to fulfill this year's slogan."

Sayyed Kamil Taybi, stating that in a situation where people are suffering from problems caused by inflation, unemployment and recession, the role of the people will be less, added: guiding and directing small and medium-sized investments belonging to the people and supporting these activities can Highlight share in the economy to help improve production conditions.

He stressed: "Accordingly, these small and medium-sized activities of the people should not be affected by bureaucracy and paperwork, and aspects of reasonable profitability for small investments of the people, which can be in the form of bank deposits or financial assets, should be considered in order to help production."

Competitiveness is an important principle of the production system

According to Taybi, there is an important principle in this organization and production system, and that is competitiveness, which is very important for quality improvement because it can turn an industry and goods into a brand, and therefore the most important factor or incentive to use Domestic goods are the quality of goods that can be competitive and a kind of reassurance and consumer satisfaction can be achieved in these conditions.

He added: "Supporting production and removing barriers to fulfill this year's slogan requires attention to internal and external factors, and more importantly, new production capacities must be created for the economy."

The economist added: "Internal factors, ie the production system, should find better conditions, because inflation within the production system is always anti-production, and on the other hand, encouragement for investment is necessary to expand production and economic indicators."

He added: "In this regard, efficient and effective management of production resources is recognized as an intra-organizational factor in the production organization."

The need to eliminate factors that slow down the production process

Professor of Economics, University of Isfahan added: "On the other hand, external factors such as political tensions or cumbersome regulations in the banking and tax system, is a factor slowing down the production process that must be corrected in order to remove obstacles to production."

According to him, in this connection, the role of experts and policy makers can be highlighted so that they can put expert actions on the agenda to fulfill the slogan of the year.

Strengthening production requires the creation of new capacities

Taybi reminded: "In general, if we want to realize the slogan of the year and strengthen production as the main goal, according to last year's slogan, which was a leap in production, new production capacities must be created for the economy."

He continued: "In this regard, we should talk about the production organization, because in this organization, the relations between the product and the factors of production are linked and the so-called correlation is created between them."

The faculty member of the Department of Economics, University of Isfahan, added: "Reforming relations and not wasting resources will help the production organization to become more dynamic and agile for capacity building and economic growth, which is the main goal."

Taybi pointed out: Production in the economy is an endogenous variable and therefore the system should be correct and the relations between indicators and economic variables should be corrected and a balanced relationship should be established so that it can increase production capacities, for example, the consumption pattern should be modified. And investments grow because production is affected by other factors.

Emphasizing that there should be regulations that reduce barriers, he said: "In this regard, business indicators should be addressed because Iran does not have a good ranking in terms of business indicators, ie to perform a contract that wants an economic activity." It takes a long time to form, or the form and process of trade in the foreign trade sector is as time-consuming as the long process of customs clearance.

The director of the International Economics Center of the University of Isfahan said: "On the other hand, considering that the role of the government in the economy is high and it holds positions in many places, the nature of the bureaucracy and paperwork system also governs the production conditions."

He added: "Therefore, one of the obstacles is the bureaucratic situation in which the paperwork and facilitation system in matters related to production, as well as matters related to facilities and financing, must be adjusted."

Emphasizing that the opportunity cost of financing such as taking out a loan or production facility should not be costly, Taybi said: "In this regard, when time loses its main role and may lead to the closure of a production and economic unit." .

Referring to the impact of improving this trend on the people, he said: "When production increases, the welfare of the community and the people will be achieved, and the existence of more goods and the provision of quality services will help the welfare of the people."

The economist added: "Improving the consumption pattern in society and in creating culture is one of the external factors, and in this regard, the role of the government in creating a suitable platform for macro-direction so that people can cooperate to provide or improve production capacity."

There are more than 9,000 production and industrial units in Isfahan province.