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Iran Business Expecting Overhaul

More than two and half years have passed since the “Law for the Continuous Improvement of Business Environment” was enacted by the Islamic Consultative Assembly of Iran, but it has not been enforced yet. Now, Rouhani’s Government considers this law to end the state of stagflation in the country. Iran’s economic policies toward improvement of the business environment confirm that decreasing government intervention to regulate prices is necessary and this matter is on top of the agenda set by the government.

Translated by: Nazanin Ehsani Tabatabaee
More than two and half years have passed since the "Law for the Continuous Improvement of Business Environment" was enacted by the Islamic Consultative Assembly of Iran, but it has not been enforced yet. Now, Rouhani's Government considers this law to end the state of stagflation in the country.
Iran's economic policies toward improvement of the business environment confirm that decreasing government intervention to regulate prices is necessary and this matter is on top of the agenda set by the government. In current situation the government seriously follows the strategy of keeping inflation down and if the government does not intervene to regulate the prices (excluding specific goods), it may activate the supply and it also can affect the welfare of consumers in a positive way. Even as, pricing some goods excluding staples caused some criticism by participants of private sector during recent months. Moreover, to keep in contact with economy participants and monitoring the environment of business are among the other important concerns of the government for overhauling the business environment. One problem is that some of the economy officials were not present in government and private sector dialogue council and this led to some criticism. Extending the validity of commercial cards, attempts to mechanizing the customs in the country and developing some plans to decrease tariff classification until 1396 (2017) are among the actions taken by the government to overhaul business in Iran. The Industries, Mines and Trade Minister, Mohammadreza Nematzadeh has recently talked about finalizing the executive bylaws of continuous improvement in Business Environment.

Welcoming posterior articles
According to a report by Islamic Parliament Research Center (cited from World Bank), Iran's indicator of "starting a business" shows a rank of ۱۰۷ among ۱۸۹ countries and it also indicates a position of ۱۶ for Iran among the countries with ۲۰-Year Perspective Documents.
According to this report, starting a business in Iran should include 8 stages taking 16 days to complete and it costs 1.3 percent of per capita income. Currently, such business requires at least capital equal to 4.0 percent of the country per capita income. Iran's doing business index is 152 among 189 countries according to World Bank 2014 announcement. Iran's ranking has been declined constantly during the recent years. Regarding the indicator of "starting a business" in Iran and also considering the legal, regulatory and executive facts inside the country, one may find 6 steps to start a business which takes 11 days and it costs 0.6 percent of per capita income. This review had been done in April 2014.
There are some other stages which can affect Iran indexes in World Bank ۲۰۱۴ announcement. An electronic system for registering company establishment has recently been launched in Iran and it is expected that such system may promote Iran's ranking to ۶۵ among ۱۸۹ countries. It can also raise Iran's position to ۱۰ among the countries with ۲۰-Year Perspective Documents. To promote Iran's ranking, new conditions and developments have to be considered while measuring the indexes of countries.
"Business environment is a comprehensive concept and the government decides to replace the production protection act by the package for ending the state of stagflation. Improvement of business environment has been emphasized in this package and if it enters the executive phase in best time, then business environment can be improved and it may even be a complementary for the Law of the Continuous Improvement in Business Environment. The point is that, no new policies were needed if the mentioned law was enforced two years ago. Many of articles mentioned in new government's package could have been implemented long times ago and not being repeated. However, we always welcome posterior articles." Said the chairman of business environment, entrepreneurship and regulations commission in Tehran chamber of commerce in an interview with Donyaye Eghtesad daily. He also added: "while making policies related to economic participants, it's better to invite the delegates of associations, chambers of commerce and cooperation and guilds to consult with them. But the issue is that not are all the economy officials and ministers present in government and private sector dialogue council. Besides, Tehran mayor participated in the meetings only two times. Government officials must consider participating in the meetings of the government and private sector dialogue council as a legal responsibility. Hopefully this matter will receive more attention during the second six months of activities by the council." Pourfallah believes that nowadays, 50 percent of responsibilities are up to private sector and it will not be activated unless the challenges are presented in meetings held by participants of both government and private sector delegates.

Missing Executive Plans
Chairman of social affairs and associations commission of Tehran Chamber of commerce, Mohamad Mehdi Rasekh believes that economic policies of the government are not responsive alone and operating programs have to be announced and put into practice soon. He also added: "Necessity of fading government intervention in pricing was emphasized in the package, but what is the real meaning of such fading? Hence, all strategies and executive plans have to be introduced". Rasekh also talked about the competitions among enterprises in countries and pointed: "Government pricing should not continue even to the end of this year. It's a waste of time to follow the method which leads to a predictable result. When the government gets involved in pricing, then no competition takes place. While, competition requires the quality incensement and it takes times. We should not miss the time. He also said that the government interactions with private sector participants must not be confined to the dialogue council, because this is a restricted council with special conditions. In current situation of Iran, the government should improve its communications with associations in a meaningful way. In fact, the government should consider such associations as opportunities. Tehran chamber of commerce also focused on "Private sector expectations from government" including economic liberalization and streamline the business. According to Rasekh, ۲۰ representatives of the government do not participate regularly in the meetings held by the commissions in Tehran chamber of commerce, whereas they are useful meetings and the delegates may give good advices about economic problems to the government. Conclusion of comments by Rasekh shows that organizing the business environment is a time taking plan and it may help end stagflation along with other policies. Such plan needs an operational planning with a good method for implementation.

Economic liberties
In recent meeting of industry and mines commission in Tehran chamber of commerce, Chairman Mohsen Khalili Araghi also pointed to new package introduced by the government and said: "Economic liberties are recommended. In every country, GDP growth is in direct proportion to economic liberties. Studying the economy of different countries reveals the fact that economic growth raises in countries with economic liberties."
"Government intervention in pricing was blamed in the package for ending the state of stagflation, yet such intervention runs its course in currency market. The government must exit currency market and let the currency rate be defined by economic rules.", said the second deputy chairman of industry and mines commission, Mehdi Pourghazi in a report published by public relations department of Tehran chamber of commerce.

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