Make the economy competitive

We were welcomed warmly, with cold hands but a warm heart. It made us so delighted when we heard that he reads "TEJARAT-E FRADA" every week. Our first series of questions were about politics and his answers were carefully thought out. As we moved on to economic issues we found him much more genuine. While talking about economy he finally ordered tea. Let me put it in this way he talked about economy more frankly, with no circumlocution. We expected him to be critical of the nuclear talks as the former Iranian Secretary of the Supreme National Security Council and top negotiator but he was optimistic. Head of Iran's Legislative Wing supports competitive economy and private sector's active presence.



Our questions will be focused on politics, economy and diplomacy. You are an influential figure in Iran's politics. We would like you to let us be frank. We will try to ask forward-looking questions .We want to know about the impact of political changes and policies on the economy, so it might be a different kind of interview. The economic actors would like to know about the outcome of the current relation of some extremists with newly established government of Dr. Rouhani?
The parliament in general, believes that Mr. Rouhani's economic policies are acceptable and positive and supports the government particularly when those policies are compatible with the Constitution of the Islamic Republic of Iran. In Iran's current situation the cooperation between the Legislative, the Judicial, and the administrative wings is crucial. In total we find the economic policies of the government well-chosen and reasonable. Ministers are well- experienced and we are hopeful and positive. The disagreements in the parliament are pretty normal and of course positive but as I said we support the government. Iran has a great potential and valuable human resources and even western countries admit that we rank first in the region. There are many universities and many of the graduates are entrepreneurs. We need to empower our internal economic structure.
Some members of the parliament have witnessed flaws in the policies and believe that it is their national responsibility to intervene. I have no doubt that the Parliament and the judicial wing and the government all look for economic security and stimulation in the economy and are ready to utilize all the resources that we have.

What is your personal view on Geneva talks and its impact on our economy?
I think Geneva agreement is useful. The west had no other option and they were obliged to sit and talk with Iran and it was really good. Of course there are some considerations. In my assumption our negotiating team must be fully focused on the final agreement, initial steps were important but the final step would be determinant. What currently is going on may not remain permanent. The first six months will soon be over and the final comprehensive agreement really matters. Some western experts had mentioned that there was still much to do on commercializing the interim agreement. It means that they intend to take financial advantages of the agreement and they have encountered challenges. This tells us to be more cautious. We need more talks on the mechanisms of commercializing the Geneva agreement in the country and I hope to have more focused and more comprehensive talks in future with p5+1.

What is your message for the economic activists and investors?
I think it is the right time to invest. The supreme leader proposed the "Economy of Resistance" policies and plans which were followed by several meeting with officials and authorities. There is a strong determination to realize those goals and the President is well aware of that. As you might remember, we already had such plans In Parliament in development plans for the country and the Majlis (Islamic Assembly) passed a bill entitled "Improvement of Business Climate" which of course should not have been ignored at that time. I wonder if the government feels there is lack of laws and regulations in this field. I believe that the current law must be enforced to improve the situation and we are open to suggestions by investors and others. I think it is the right time to start activities in Iran's market which has great potentials. There are good signals in both inside and outside the society. Private sector plays the key role and the government should not replace them and, of course, it will not be able to do so. I think the current government does not intend to meddle in the economy.

In your opinion, is getting out of recession prior to controlling the inflation?
Definitely, economic boom results in inflation control. But it would not work to tackle the inflation first, since the economy and domestic production will not be stimulated.

It seems that the government is trying to control the inflation with some policies….
No. As far as I'm concerned mixed policies are applied by the government. The bank should step in and help.

Due to certain circumstances, banks are not capable of granting facilities …
We suggested that the banking capital base must be increased. We passed the law for investment of The National Development Fund of Iran (NDFI) in domestic banks. This could help the banks grant facilities and services and will increase Return on Assets of the banks. I firmly believe that the Banking Power Base must be increased. Banks should feel the responsibility to support industries and plants. The problem in our money market is the role of the banks today; they have stepped in production and commercial activities through offshore companies and holdings. It is absolutely wrong for banks to provide such services and facilities. Such activities might have short-term benefits for the banks but it is not right. In the past we witnessed orders to the banks … and as you can see there are now consequences.

These days, foreign trade delegations are queuing to visit Iran and explore grounds for investment opportunities. But no contract has been made yet. This is unprecedented, what is your assessment as the Head of Iranian Parliament?
As you mentioned they are only here to study the investment opportunities and it is fishy that no contract has been signed yet. There have been delays in implementation of the Geneva agreement and it is to their loss. According to the agreement, doors must be open to do business in Iran for international companies, so we should pay more attention to diplomacy to tackle these issues. The most important thing is our national interests and we should not be distorted by internal disputes. Of course, there is political and economic stability in Iran. Today there is a consensus among the government and the Parliament and the judiciary that security of investment is a priority and the Supreme Leader also supports us. So diplomacy should play its role.
At present, domestic production is our priority and there is an urge for internal investments. Many affluent Iranians still prefer to invest out of Iran. Their concerns must be addressed. Foreigners have different concerns and expectations, many of them like our country and come here and invest.
The engine of domestic production must be fired by Iranians, both the government and the Parliament should take necessary measures to overcome the difficulties. We need competition in the market and also with the outside world. Tariffs must be set reasonably. We should not waste our foreign currency resources to import products such as luxury cars and so on.

It is estimated that Iranians residing in other countries own 700 to 800 billion dollars in assets. Mr. Rouhani has recently invited Iranian investors, what do you think? Is it an appropriate time?
It certainly is. There are a lot of Iranians residing in neighboring and western countries. They are interested in investing in their home country, the process must be facilitated though. There is a strong will in the government and the Parliament.
Iranians must be sure that they can have secure and profitable investments in Iran. Many of the Iranians outside the country are not politically in trouble, for example: a group of investors thought that fluctuations in the exchange rates is a great risk to the value of their assets, as a result, they fled the country and invested in other markets.
The stability that we now have in Iran is an opportunity for Iranians to come back to their home land and set up companies and invest in various projects. Currently both Tehran and Iran Chamber of Commerce are busy travelling to foreign countries, I think they must be directly involved in providing the ground for the return of Iranians.
As I mentioned earlier, both the government and the Parliament are determined to create competition in the economy and some reforms have been made. The government tries to empower the private sector and has no intention of replacing them with state-owned entities.