NCRI Staff

NCRI - According to the Head of the Iran’s Chamber of Commerce, South Korea with 10 production units produces cement multiple times higher than Iran with 165 units. He said that the situation is the same in other sectors, and a “fundamental change” is necessary to make an upheaval.

Perhaps it's a joke to say that the number of car manufacturing units in Iran is higher than the total number of automakers in the leading countries in this industry. But this is the statement of the head of the Chamber of Commerce, Industries, Mines and Agriculture of Iran, who with his position is well familiar with the realities of this field.

Gholam Hussein Shafei, in the 42nd meeting of the Committee on Industry and Mines of the Parliamentary Assembly and the Council of Governmental Dialogue and Private Sector of Khorasan Razavi, held on Friday September 8 in Mashhad, highlighted the realities that revealed the inefficiency and low productivity of Iran's industries.

“In the automotive industry, we have 49 licensees and 32 licensed vehicles under construction, and a total of 81 units of automobile production in our country," said the head of the Chamber of Commerce. “The number of units in the automotive industry in Germany is 12, in U.S. 29, in France 8, in Japan 11 and in South Korea 5 units.”

Thus Japan with 11 automotive companies produces about 10 million vehicles every year most of which are exported to other countries. In return, Iran with several times higher automotive companies produces less than a million cars, almost all of them entering the domestic market.

The head of the Chamber of Commerce referred to another similar case and said: “In the field of cement, there are 73 licenses and 92 permits under construction, which makes it a total of 165 units. However, South Korea with 10 units produces much more cement than us.”

The dilemma of private-governmental enterprises

A number of Iranian industries are units that belong to the government and executive agencies and apparently transferred to the private sector. The formality of these transfers and the continued governmental support of these industries are such that some senior government officials also call these units “productive private-governmental units.”

Mohammad Shariatmadari, Minister of Industry, Mining and Trade of Hassan Rouhani Government, said on August 29 at his inauguration ceremony: “One of the problems we face is private-governmental transfer and the major firms in the country are faced with management and governance challenges, and I consider it my responsibility and mission to make transfers to the private sector. But in this way, those who are not responsible, in the exercise of ownership create crisis in the administration of the large enterprises of the country.”

Shariatmadari admitted that the owners of these productive firms “are our colleagues beside us at the government desk.” He says that these people "are either the Minister of Defense, or the Minister of Welfare, or are responsible for the Martyrs Foundation and the Relief Committee, and may even have responsibility for another unit and today they have become the owner of some industrial and mineral areas in the name of privatization.”

“In the production of motorcycles, 177 licenses and 33 units are under construction and we have a total of 110 units,” the head of the Chamber of Commerce said with reference to another manufacturing sector in Iran. “The total number of motorcycle units in the countries of Indonesia, Taiwan, Turkey, Saudi Arabia, Pakistan, Vietnam, Thailand, China, Malaysia, India, Bangladesh, the Philippines, Japan and South Korea is 82 units. "

One of the problems created by productive firms is that this sector does not need to increase productivity, quality and efficiency using rents and government facilities.

On the other hand, the real private sector has been supplanted by these firms.

Tahmaseb Mazaheri, the former head of the Central Bank of Iran in October 2015, told Tejarat Emrouz (Today’s Trade) daily that “the government has a large share of the country's production. The feeble private sector cannot compete with the coarse and strong private-governmental sector.”

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