Elimination of pricing of products of private sector by government

Project


: Tehran Chamber of Commerce, Industries, Mines and Agriculture

Elimination of pricing of products of private sector by government
The Significance of the Issue
Administrations in Iran have mainly resorted to pricing in various sectors historically to react to disturbances caused by their own erroneous policies.
Over time, the administrations' failure to generate stable revenues and efficient expenditure has ended up in a chronic budget deficit, which has put pressure on the country's monetary and banking system that caused more inflation and less economic stability, harming different economic markets.
Yet instead of responding to the disorders in various markets, governments paid attention to the aftermath or price hike instead of resolving causes of inflation and budget deficits.
Actually, most actions made by governments were ended up in pricing. Bank interest rates in the banking system have been set and resources have been allocated in an arranged approach, which has created a super challenge in the banking system together with government debt to banks.
Stabilization of the exchange rate and reduction of competitiveness in Iran's foreign exchange market have paved the ground for foreign exchange jumps at the time of declining foreign exchange earnings.
The governments have also created environmental challenges in the country by pricing energy and water. They have overshadowed the labor market, reduced employment or hurt production capacity by determining wages. They have reduced the competitiveness of the economy and shattered long-term economic growth by pursuing the policy of pricing products.
Such an intervention has created a lot of negative impacts on the business environment, including unemployment, and has led to reduced growth and economic stability along with chronic inflation.
Besides, the mechanism of the intervention has been to the extent that it has made it difficult to accomplish important objectives such as promoting justice and even in some occasions, rather than supporting the underprivileged, it has also enhanced injustice and disparity.
The combination of such interventions has made businesses one of the main victims of the government policy. The aftermath of government pricing for enterprises has been heavy for the businesses, and because of trying to gain momentum instead of profitability, downsizing and shifting to the informal economy.
Additionally, ignoring the issue of pricing has had a direct impact on the failure of Iran's macroeconomic policies, including privatization.
The plan here will suggest alternatives to the current imperfect laws that have created the legal pricing infrastructure. Moreover, part of the policy interactions will cover the usage of the proposals.

The purpose of the plan
The project will be implemented aimed at helping the Tehran Chamber of Commerce, Industries, Mines and Agriculture to provide offers for amending the basic regulations leading to pricing in Iran.
These suggestions will comprise of amendments to the Consumer Protection Law, the Law of the Trade Union System and the general policies of Article 44 of the Constitution.
The process of policy exchanges to put into practice the suggestions via parliamentary reform plans will also be followed up in line with the project.

Sub-objectives
Creation of scientific literature and general policy in pricing and its consequences in Iran's economy
Promotion of the status of Tehran Chamber of Commerce, Industries, Mines and Agriculture as one of the main sources of presenting policy content on pricing