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Government call for collaboration

Consultation with Economists

Referendum on Subsidy Reform Plan on Facebook”; this grabbed the headlines in the last month of Iranian year of ۱۳۹۲. At that time Iran’s vice - president called on the Iranian people to share their ideas and solutions to the implementation of Subsidy Reform Plan by suggesting income levels for granting monthly cash payments by the government.

Ebrahim Alizadeh
"Referendum on Subsidy Reform Plan on Facebook"; this grabbed the headlines in the last month of Iranian year of 1392. At that time Iran's vice-president called on the Iranian people to share their ideas and solutions to the implementation of Subsidy Reform Plan by suggesting income levels for granting monthly cash payments by the government. Some believed that the government should consult with economists. At the beginning of this summer the cabinet finally invited economists and called for collaboration. Iran's vice-president, minister of Jihad-e-Agriculture, minister of Industry, the governor of Central Bank, president's adviser for Supervision and Strategic Affairs, Cabinet Secretary, chairman of National Development Fund of Iran (NDFI) and president's economic adviser attended the meeting. The four-hour meeting was moderated by Mohammadali Najafi and started with Mr. Jahangiri's speech followed by experts' solutions and criticisms.
The guests were mostly pro government policies therefore they were not the subject of criticism. According to one of the participants "stagflation" was the main topic. Ali Dini believes that government officials are determined to deal with recession. Couple of days later, Ishagh Jahangiri emphasized exit from recession as the main government priority.

Meetings; not merely a formality
Shortly after the meeting, Iran's vice-president announced that the government was determined to counter recession. According to government's official portal, Mr. Jahangiri said that "having targeted inflation, it's time to combat recession". Prior to these remarks, he had asked economists and experts for solutions. He explicitly called the meetings genuine and not mere formality, switching policies from combating inflation to stagnation is a proof to the above.
Such experience was not entirely satisfactory in the previous administration as the collaboration between the government and experts did not last and just after a three-hour meeting in Iranian year of 1387 with one hundred economic there were only letters and in the final years of Mr. Ahmadinejad's tenure even the correspondence was ceased. The new administration is determined to maintain contact with economists and experts. Quoting Mr. Jahangiri; Ali Dini said that the meetings with experts are not merely formalities and the president may attend the upcoming meetings.

The guest list
Two days before the 11th presidential elections, a list of pro Rouhani economists was published. Despite some critical views, they are mostly considered as pro government. Six of those experts attended the meeting, namely Houshang Shajari from Universirt of Isfahan, Abbas Shakeri from Allameh Tabataba'i University, Hossein Sadeghi from Tarbiat Modares University, Hassan Dargahi and Mohammad Sharifzadegan from Shahid Beheshti University and Ali Dini Torkamani from Institute For Trade Studies and Research. In addition, Kamran Nadri from Department of Economics, Imam Sadiq University, Majids Sameti from University of Isfahan, Hossein Abbasnejad, Teymour Rahamani, Ghassem Mahdavi and Mohsen Mehrara from University of Tehran and Morteza Ezzati from Tarbiat Modares University expressed their views.
According to one of the participants, other major figures in economy namely Hossein Raghfar from Al-Zahra University and Teymour Mohammdi from Allameh Tabataba'i University were also present at the meeting, while Mohsen Ranani and Abbas Arabmazar turned down the invitation. "Exit from recession" was the main topic and Mr. Jahangiri addressed the issues and obstacles. According to Mehr News Agency Mr. Jahangiri said: "11th administration faced tough challenges from the very first days namely currency exchange rate fluctuations, limitations to oil exports and problems with money transfer". After the meeting he reiterated the crucial importance of combating recession.

Recommendations
Economists expressed their views and solutions for combating recession. According to Tasnim News Agency, recommendations targeted issues such as monetary policies, political economy, enhancement of production and 6th Development Plan and budget.
As to monetary policies the main recommendations were: Reform of banking system and customs service, tax reforms, interest rate adjustment, stabilizing currency exchange rates in the long run, supporting the stock market and tackling tax evasion.
For political economy, commitment to fighting corruption, avoiding the presence of governmental and quasi-governmental entities in the economy, cutting red tape, improving decision making and proper orientation of financial resources of NDFI under close supervision were recommended.
The experts emphasized the crucial importance of enhancing domestic production, improving business environment, avoiding contractionary monetary policies, subsidizing production units in order to maximize production capacity, creating more jobs, increasing non-oil exports and supporting small and medium sized enterprises in creating jobs. They also called on the government to consult with the economists while drafting the 6th Development plan and to reform the 1393 budget in order to curb inflation surge and lastly implement practical budgeting process by the government.
They also requested the government to modify Subsidy Reform Plan executive process and cash handouts, prioritize development projects and assign them to the private sector, tackle social inequality by tax reforms and attract foreign investors. Ali Dini said that discussions revolved mainly around recession and some believed with inflation being over the hump (standing at 15%) it's now time to combat recession.

An unsatisfactory experience with the previous government
The economists attended the meeting at Shahid Beheshti Hall this year while bearing the burden of their bitter experience of collaboration with the previous government. When fifty economists had a six-hour meeting with Mahmoud Ahmadinejad in Iranian year of 1386(2007), it was hard to predict that their relation with the government would turn sour and their letters would remain unanswered. Their first meeting was held after the second complaint letter sent to the government (the first letter was sent in 1385 and the second one was sent one year after that). In the third letter sixty economists expressed their concerns over Iran's economy and its outlook which was followed by another letter to the Parliament representatives with the hope to grab their attention. The last letter was sent in Iranian year of 1391(2012) in which forty three economists expressed their concerns and offered ten solutions for a turnaround in the situation.
Most of Iranian economists were not satisfied with the 9th and 10th administration and despite previous bitter experience started cooperating with the new government while hoping for a better future ahead.

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