Business environment

Fateh Barayee a member of Central Council for Industry interviewed SHATA news agency and mentioned assistance to fiscal markets for financing industry as the main objective of establishing Industry Confederation.



When was the Industry Confederation established and how many unions are its members?
It was established in early 2001 and includes 80 unions as well as some large companies as its members. The Industry Confederation aims at assisting decision-makers in their attempts to facilitate the business environment in the country so that this facilitation helps provision of grounds for investment and, consequently, increases the contribution of industry to GDP. In fact, such bodies will make industrial and scientific cooperation possible. As article 104 of the Fifth Development Plan Law stipulates, "in order to enhance the contribution of firms and increase the share of unions, networks, export management companies and companies with diversified products in industry, the government is allowed to assist them in non-oil export areas." The Confederation comments on the situation of the entire industry and all issues which its members from public and private sector encounter. Whether or not these objectives have been actualized is a matter to be discussed and pursued by related bodies.

What role has the Industry Confederation played in economic decision-making processes of the country for the last decade?
Having gained the assistance of unions and management associations, the Industry Confederation has performed an extensive set of activities which were of interest to the parliament, the government and the expediency council. It contributed to some major economic events such as the enactment and enforcement of direct tax code in early 2002. The main materials of that code were prepared by the confederation. It also extended its helping hand to government during the transition of the economic system and targeted subsidy reform plan. It provided both the government and the parliament with research findings in the form of booklets. Moreover, it offered its consultation services to the economic commission of the parliament with regard to improvement of business environment. Prior to economic transition and targeted subsidy reform plans, it conducted some research into subsidy policies about energy carriers and conveyed the results to related authorities.

Could you elaborate on your methodology in your researches and the way you transfer them to the government?
We investigate various components of business environment in case studies or via continuous or seasonal surveys with members. For instance, all rules and regulations such as foreign trade code, foreign currency rates, labour and social security laws, customs rules and standards are investigated based on surveys with industrial unions and owners of industries. The condition of each component is then assessed and the results are sent to the parliament research centre.

What is your view on stagflation and current economic conditions of the country?
Our economy has been grappling with stagflation for years. Employment rate is at its lowest record level. High unemployment, low trades, and meager investment have joined hands to impose their negative impacts on economic growth and push it towards negative figures. Stagnation combined with an inflation rate of 10% or higher lead to stagflation which in turn, makes planning for business and investment hard and tough. Ambiguities and uncertainties make investors think twice and be hesitant while investing. Stagnation and inflation are two opposite extreme points and, unfortunately, our country has been grappling with both for 5 years. The price levels of goods and services soared up while economic growth suffered from slowness. At the moment, we intend to co-think with industrialists and find a solution to exit stagflation and assist the decision-makers in both legislative and administration.