The need to reduce dependence on oil and increase exports

The need to reduce dependence on oil and increase exports
  • 2020-02-08
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"Reducing dependence on oil and export-driven production are two important ways to strengthen the economy," the head of the Iranian Confederation of Exports said, stating that development plans, horizons and the announcement of a resilient economy are policies far from its goals.

According to Iran's International Stone Exhibition, Mohammad Lahouti on ways to boost the economy in the current situation stated that the country's economic plans, including the country's development plan (from 1st to 6th), Horizon 1404 and Resistance Economics, are all pre-determined plans However, each of these programs has had its ups and downs in the run-up to its primary goals of moving away from the oil economy.

He said: "On the horizon of 1404, we are still far from achieving our goals and objectives. In the case of the resistive economy, when the year was called the resistive economy, it was more limited to slogans on billboards and billboards, but in practice Not much happened.

"After the imposed war, there are many plans for the economy and its development, but unfortunately we have a long distance with them and goals to be met, what is certain is the existence of specific policies aimed at distance," said a member of the Iranian Chamber of Commerce. Getting out of the oil economy. But one of our problems is that whenever oil prices went up, governments were far from the main goals of the economy because they saw themselves as a surplus of other incomes and were managing the nation's oil money.

The head of the Tehran Chamber of Commerce's Trade Facilitation and Export Promotion Commission pointed out that instead of using this god-given blessing when rising prices, the government tried to suppress the exchange rate on the one hand and facilitate low-cost imports on the other, spending foreign exchange resources on spending. Instead of investing in development and infrastructure projects, they said, the sanctions would have reduced the government's oil revenues, and provided conditions to increase non-oil exports and reduce dependence on the oil economy. Today, it can be said that foreign exchange earnings from oil sales in the budget are less than twenty percent.

One of the things to keep in mind is that about fifty-five to sixty-five percent of our export baskets are semi-manufactured and sometimes raw materials, so policies need to be tailored to the context, Lahouti emphasized. The goal is to encourage and support higher value-added export-oriented products, which cannot be achieved through slogans and haste.

He said: Achieving these goals requires sound investment and policy making, such as creating a proper transport fleet, lowering prices with regard to production efficiency, competing export product, and moving away from export restrictions and rationales. Lowering the import tariffs and lowering the rates on banking facilities and targeted incentives for export products, etc., which are related to domestic policy issues.

Lahouti emphasized that in addition to domestic issues there are some external issues that need to be addressed in order to improve the economy: WTO membership, FATF assignment focusing on national interests away from political excitement, reducing investment risk and also Problems in transportation should be addressed.

At the end, the head of the Iranian Confederation of Exports said that the sanctions have prevented the attraction of foreign investments. He said: "Given all the issues mentioned above, we should try to do both internal and external affairs in order to provide conditions to attract foreign investment." And reduce the risk of investing at home, both to boost the economy and prevent capital outflows.

* Tasnim