EghtesadOnline: The head of Iran's Chamber of Commerce, Industries, Mines and Agriculture Gholamhossein Shafei outlined 12 solutions to the ongoing currency and economic problems.
Private sector officials made the proposals in a letter sent to First Vice-President Eshagh Jahangiri, the official website of the chamber reported on Monday.
In his letter to Jahangiri, Shafei expressed the chamber’s readiness, as representative of the private sector, to elaborate and provide details on practical solutions to the government.
ICCIMA believes if proper action is not taken sooner to reform the fundamental policies, the economy will face bigger problems. According to Financial Tribune, some of the chamber’s proposals are as follows:
- Allocation of subsidized currency (USD1 = 42,000 rials) for all commodities and services be stopped
- providing currency for real needs, including imports, such as basic goods, be assigned to the secondary market (governed by market rates)
- control over currency rates and forced interventions in the secondary market be strongly prevented and let supply and demand mechanisms determine currency rates in the market
- small and medium-sized industries sell 80% and large enterprises 90% of their export earnings to the secondary market. The rest of their earnings be spent on repayment of foreign currency loans, costs of overseas offices, transport costs and the likes
- the government, like other sectors, sell its tradable currency in the secondary market and deposit the currency remaining from currency sales in a separate fund with the Central Bank of Iran
- a rationing mechanism be set up for fuels that are prone to smuggling (gasoline and diesel fuel) and the surplus be sold at market rates and the earnings be stored in the aforementioned fund,
- at least 50% of the income of the fund be given to low-income deciles (5 to 7 lowest deciles) in the form of cash subsidy,
- the government compensate deficit of working capital in SMEs from the surplus of earnings from currency sales.