Criticizing the Country's Industrial Development Strategies by Experts and Officials

The third quarterly conference of the Council of Scientific Associations of Iran entitled "Industrial Development Strategies (with an emphasis on the implementation of the general policies of the system)" with the presence of the board members of the country's scientific associations and several officials of the country's industry sector in the fields of legislation and implementation was held by Khatam University in Tehran.

According to the public relations and website of Khatam University, the third quarterly conference of the Council of Scientific Associations of Iran titled "Industrial Development Strategies (with an emphasis on the implementation of the general policies of the system)" was held on Saturday, January 6, 2024, with the presence of the board members of the scientific associations of the country and several more people. The ceremony was hosted by Khatam University in Tehran with the presence of the officials of the country's industry sector in the fields of legislation and implementation.

We do not have a coherent strategy for the country's industrial development

Dr. Majid Ghasemi, the president of Khatam University and the president of the Council of Scientific Associations of the country, welcomed the attendees and gave a speech on the topic of "Industrial development strategies of the country; challenges and solutions" and said: “The existence of strategies for industrial development in our country is inevitable for various reasons. Especially, when we see that different countries have a coherent and expressive industrial strategy, the importance of such a strategy is more prominent.”

At the same time, he regretted that a coherent strategy for the industrial development of the country has not been presented so far, and further, by examining the upstream documents in this field, he pointed to the various clauses of the general policies of the resistance economy in this regard.

The CEO of Pasargad Bank believed that the participation of members of the society in economic activities, the leadership of the knowledge-based economy, the growth of productivity in the economy, the production of strategic products and services, the comprehensive strengthening of the financial system, comprehensive and targeted support for the export of goods and services, the need to match the added value with net positive exchange rate, completing the value chain of the oil and gas industry and strengthening the jihadi culture are among the highlighted issues in the general policies of the resistance economy concerning the industry.

Dr. Ghasemi also addressed similar issues in the general policies of Article 44 of the Constitution, the Law of the Sixth Development Plan, the Seventh Plan Bill, and the National Land Development Document and further emphasized: “Today, neglecting to explain the country's industrial development strategic plan policy is a neglect that harms the economy. As the Council of Scientific Associations of the country, we carefully emphasize the existence of this strategy in the country.”

We have no other way but to use the capacity of the private sector

In the following, Dr. Ezzatollah Akbari Talarpashti, the Chairman of the Industries and Mines Commission of the Islamic Council, in a speech related to the country's industrial development strategies, pointed out the issues surrounding the formulation of the seventh development program bill in the government and its submission to the parliament and said: “When this bill was given to the parliament, we saw that it did not have a heading for industry and mining at all and we conveyed our opinions in this regard to the government.”

He added: “In addition, it was expected that in the first budget bill after the submission of the 7th plan bill, based on which 8.5% growth was predicted for industry, 13.5% growth for mining, and 23% growth for trade, it would be specified that in the first year, how much of this growth is supposed to be realized for mining and trade sectors, which was neglected in the budget bill.”

The Chairman of the Industries and Mines Commission of the Islamic Council continued: “The problem is that we expect the country's development planning to be carried out by the Program and Budget Organization, but this organization has its problems and does not know how to direct resources at a macro level.”

Dr. Akbari emphasized: “For the industrial development of the country, we have no other way but to use the capacity of the private sector. Additionally, those in the parliament and the government should have the power to solve major issues. The fact is that in many cases, the problem is related to cumbersome regulations and lack of coordination between the government and the parliament, which of course is not unique to this government and we have had this problem in different governments.”

The degree of realization of the general policies of the system in the industry sector

The next speaker of the conference "Strategies of Industrial Development with Emphasis on the Implementation of General Policies of the System", Dr. Morteza Khalesi, Head of Industry, Mining, Commerce, and Communications of the Program and Budget Organization, presented a report on the evaluation of the implementation of the general policies of the system in the industry sector. He said: "According to this report, our performance in the added value sector of the industry has been almost constant and has not grown from 2011 to 2022. In the field of gross fixed capital formation in the industrial sector, we have had a downward growth since 2013. Besides, the share of our non-oil exports has remained almost constant and has not grown.”

Dr. Khalesi added: “Our industrial competitiveness index in 2020 was 55, which is lower than the global average. Of course, we have grown in the field of improving the level of technology and achieving advanced technologies.”

The supervisor of industry, mining, commerce and communications affairs of the Program and Budget Organization added: “In general, it must be said that unfortunately we have performed poorly in the implementation of the general policies of the industry sector, which, of course, is not the problem of the government alone, but heavy sanctions have had a significant role in this issue.”

Non-oil exports of 65 billion dollars for 2024 are not far away

In the following, Mehdi Zeighami, the Deputy Minister of Industry, Mining and Trade and the General Director of the Iran Trade Development Organization, in a speech with the essence of Iran's non-oil export development strategies, said: “We have challenges in the field of exports, part of which is related to the introversion of manufacturing industries. This field of joining the Eurasian markets was a difficult and big task that was well completed.”

He added: “Further to that, the variety of our export product portfolio is limited and mainly includes raw and semi-raw goods, and on the other hand, the destinations of these export products are limited to China, Iraq, Turkey, United Arab Emirates, and India”

The head of the Iran Trade Development Organization added: “Currently, we have planned the optimal management of import and export in order to increase commercial competitiveness, increase the variety and complexity of exports, increase the sustainability of exports, and increase the capacity of the private sector.”

According to the deputy minister of industry, mining, and trade, the quantitative targeting of non-oil exports for the next year is 65 billion dollars and 75 billion dollars for 2025, which "are not far from reach and can be achieved at least in the next year."

Zeighami also listed a list of Iran's non-oil products export destination countries, which are at the top of the list, such as China, Turkey, United Arab Emirates, Iraq, India, Russia and Pakistan.

In addition, according to the head of the trade development organization, Iran's export potential in the Indian market is 28 billion dollars in total, and this number is about 26 billion dollars in the Chinese market.

Production as a goal and axis in the country's development programs and budget bills has been missing

Following the lectures of the conference "Industrial Development Strategies (with emphasis on the implementation of the general policies of the system)", Seyed Alireza Shojaei, a member of the board of directors of the Iranian Industrial Engineering Association and the secretary of this conference, gave a speech entitled "Strategies for the development of human capital and scientific developments; Innovation and technology in the field of production and trade" by raising the question: Why are the country's development plans generally not realized?

He said: “The fact is that, even though the slogans of the year have been related to the discussion of production for at least the last 10 years, this goal and this axis have been missing in the country's development plans and budget bills, and on the other hand, the quantitative goals and metrics functions in different sectors are not compatible with each other and our regulations are not rule-based.”

Dr. Shojaei also pointed out the scientific weakness of most of the development programs and stated that there is no support for scientific associations in the upstream documents and laws and regulations, and gave his suggestions to the Ministry of Science and said: “The specialization of universities in accordance with the scientific and industrial issues of the day as well as the capacity of each university, the withdrawal of the Ministry of Science from entrepreneurship and decentralization, especially for the success in the employment of graduates, increasing the freedom of action of universities in adapting the courses to the needs of the industry, influencing the market, conducting post-doctorate opportunities, technology assistant with the management and leadership of scientific associations, the necessity of interaction of student scientific associations with the parent scientific association are amongst the highlighted features.”

The policy of controlling the growth of banks' balance sheets is being implemented

In the following, Dr. Seyed Ali Rohani, the deputy of economic policy of the Ministry of Economic Affairs and Finance, in his remarks about the financing strategies of the industry, emphasized: “It has been about two years since the policy of controlling the growth of banks' balance sheets was implemented with seriousness and specific targeting, which of course limiting the funding is a consequence of this policy.”

He added: “When you increase the growth of liquidity to 24, 25 and 30 percent, financing will be disrupted. In the field of the capital market, it has been said for years that the share of the capital market in financing production is very low, and solutions have been taken in this field as well.”

According to the Deputy Minister of Economic Policy of the Ministry of Economic Affairs and Finance, several actions are being taken in the issue of productive credit certificates, and in this regard, the possibility of offering "productive credit certificates" bonds in the market is limited.

There is no maximum view of the private sector

In the following, Dr. Mohammad Majid Fouladgar, the Vice President of Coordination and Business Environment of the Ministry of Industry, Mining and Trade, gave a speech entitled "Industrial Iran; Challenges, Future Scenarios and proposed approaches", while emphasizing that on paper, the priority in our country is production and curbing inflation should serve the growth of production, said: "In practice, our production has contracted and inflation has not been controlled”

He mentioned issues such as restrictions on granting bank facilities, restrictions on currency supply, problems in gas, electricity and fuel supply, restrictions on water resources, reduction of domestic and foreign investment, export barriers and the challenge of currency return and return rate among the challenges that the production sector faces.

Dr. Fouladgar added: “Mandatory pricing and market control approaches, differences between sectors and conflicts, unbalanced distribution of opportunities in the country, lack of a land acquisition document and continuous changes in laws are among other issues facing the production sector in our country and with this situation and while there is no maximum view of the private sector, it is impossible to imagine a future for the industry in the country.”

Our exports do not have a high added value and are not affected by the exchange rate

Furthermore, Dr. Mohammad Shirijian, the economic vice president of the Central Bank, in a speech focusing on "Export Development Strategies", said: “In 2010, the value of our exports was equal to 33.8 billion dollars, which increased to 51 billion dollars in 2011. Additionally, in 2011, the weight of our exports was equal to 66.4 million tons, which reached 121.8 million tons in 2022.”

At the same time, the economic vice president of the Central Bank rejected the impact of the exchange rate changes on exports and said: “Considering the type of products, our exports do not have a high added value and are not affected by the exchange rate.”

Dr. Shirijian emphasized: “As long as we have pricing in the production chain, investment is not justified and less investment (both domestic and foreign) will be engaged.”

We need a kind of national consensus in formulating programs

Then Dr. Mohammad Hadi Zahedi Vafa, the Advisor to the President and Head of the Higher Institute of Education and Research, Management and Planning, in a theoretical discussion about the differences between different development and production policies, said: “Despite the fact that the country had macroeconomic policies in 1982, 1989, 1992 and 1997, the subject of the understanding of the stakeholders has been neglected; That is, we need some kind of national consensus.”

According to Zahedi Vafa, this is part of the rational framework of the industrial strategic plan of the country, and since the country's presence in the regional and global commercial chain is a priority for us, serious attention should be paid to this issue at the top of which lies the attention to the preservation of human capital and its promotion.

At this conference, some of the audience presented their views and raised questions.

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