News ID: 14613
Published: 0423 GMT October 29, 2014

Government urged to empower private sector

Government urged to empower private sector

The managing director of House of Cooperatives has called on the government to reduce its share in the national economy to prepare the ground for private sector empowerment.

 

“Currently more than 80 percent of the economy is controlled by the government whereas the share of the cooperative (sector) in the economy is just eight percent,” Mashallah Azimi told Iran Daily in an exclusive interview.

Azimi added that more than 180,000 companies which are active in the country seek to increase the share of the private sector in the economy.

The cooperative sector has been given greater authority based on a recent review of regulations by the government.

“The exit of the government from the economy will lead to more freedom in the economic sector and this will result in an increase in the number of foreign and domestic investors,” the official stressed.

Azimi said that Iran ranked 136th out of 177 economies on the Index of Economic Freedom in 2013.

Noting that Iran has fallen five notches in the Index of Economic Freedom in recent years, he said, “The government is trying to increase economic freedom to empower the private sector.”

“Unfortunately we have not followed up structural reforms to create a good government-market (model), therefore the situation is not good as far as economic freedom is concerned,” Azimi added.

He described Iran's economy as 'complicated' since it is suffering from excessive regulations in customs, banking, exports, imports and other fields.

The official further noted that the government has sent a bill to the Majlis which envisages more support for the cooperative sector.

“Unfortunately, 85 percent of the economic activities are bank-oriented and the banks have a powerful role in the economy. This has been detrimental to the national economy,” Azimi said.

A bank-oriented economy is wrong since the banks are the sole lenders to companies and economic units, he added.

He said that structural reforms of banks are necessary to boost the economy.

The private sector, which has only a 12-percent share in the national economy, is too weak and fragile compared to state-owned firms.

Some state-owned companies have been transferred to semi-state-owned companies in the past few years and this contradicts Article 44 of the Constitution which focuses on privatization.

   
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