Editorial

Recent visit of Masood Ahmed, the director of Middle East and Central Asia department of IMF, put a seal of approval on current understanding of Iranian officials and their approaches to combat malfunctions in banking system and in economy as a whole. As Iranian industries have long been dependent on cheap energy, re-pricing energy carriers should be translated into a redefinition of their corporate models. At the same time, large state-owned enterprises should leave the stage for the private sector which critically needs improvements in the business environment as well as their own competitive capabilities. The question of resistive economy regains its significance as the government roles change into an enabler which uses economic policies as instruments to predict and face future shocks. Both fiscal and monetary policies are supposed to reflect such transformations.
Macroeconomic stability is another main issue rightly understood by government. Stability of the exchange rate in recent months is the very result of this sound and prudential understanding. The other equally important element is the restoration of public confidence which can be realized via effective and fair application of the existing rules and providing people with a foreseeable future. Eventually, as the governor of the central bank admits, prioritization of projects and reallocation of resources without injecting new liquidity combined with steady recapitalization of banks can play a vital role in materializing objectives.