Alphabet of the year's slogan

According to Ashura News, citing a Mehr reporter, the Supreme Leader of the Revolution chose this year's slogan to focus on the economy, as in the past two decades, and named this year the year of "Investment for Production."

Experts believe that the slogan "Investment for Production" provides a clear roadmap for all members of society, from the government to the private sector, because this slogan is the key to solving many economic problems, reducing dependence on foreign resources, and promoting national production. On the other hand, in the current conditions of the country, the most important factor that can move the production cycle in a sustainable and dynamic way is attracting and directing capital towards production. This policy should be considered not only for large capital, but also for small capital.

Accordingly, investment policy should strengthen the attraction of domestic and foreign investment by creating a suitable environment and providing incentives. Due to the existing uncertainties, the Iranian economy has faced a significant decrease in investment in recent years, with the average growth of net capital stock between 1397 and 1402 being only 0.3 percent per year, indicating a severe recession in investment, and an increase in the rate of capital depreciation means a decrease in production capacity.

Statistics show that the share of investment in industry has decreased in recent years, while investment in real estate and services has increased. In fact, parallel markets in the manufacturing sectors, with two characteristics of higher returns and lower risk, are more attractive in our economy. This is while one of the important factors in the rapid growth of East Asian economies, such as South Korea, Taiwan, and China, is attributed to the high investment rates in these countries, which have been able to provide the basis for capital accumulation and boosting production by adopting supportive policies. P

These experiences show that the average growth of 8 percent targeted in the Seventh Development Plan is not possible without increasing investment in the economy.

The need to reduce uncertainties

Ali Chagrovand, a member of the Iranian Chamber of Commerce, said in this regard: One of the most fundamental challenges for businesses in these years has been securing capital and increasing production capacity, which has been very intelligently addressed in this year's slogan, "Investment for Production." The main prerequisite for production is attracting capital. If we want to decipher the placement of these two words together in the year's slogan, we must say that this year's slogan refers to the entire story of a country's economic growth and development.

He emphasized: Reducing political uncertainties and trying to reduce barriers to communication with the world should be the forefront of all policymaking. We cannot claim to support production at home and not make efforts to maintain markets for the supply of services and manufactured goods abroad. Production should be seen with the aim of exporting and increasing competitiveness and joining global supply chains and value chains. Another important issue is maintaining the stability of the macroeconomic environment and avoiding policies that, by fueling economic uncertainties, cause exchange rate fluctuations and increase production risks and capital flight. Unfortunately, one of the challenges of our economy is the high rate of capital outflow from the country, which, according to Central Bank statistics, has intensified over the past few years; such that the capital account deficit in 1402 increased to 20 billion and 457 million dollars.

Chagvand continued: Other measures to encourage production and investment should be sought in eliminating golden signatures, increasing transparency in the business environment, reducing administrative corruption, reducing bureaucratic complexities in issuing business licenses, reducing the production of open-ended regulations, and avoiding the adoption of prescriptive policies.

He added: In terms of strengthening production infrastructure, it is also necessary to plan for a sustainable supply of energy for businesses, improve transportation infrastructure, and enhance the prerequisites of the digital economy. Reducing the tax burden on production units and reducing interest rates for producers can help reduce production costs for industrialists and manufacturers. Currently, the cost of production in our country is very high, and many producers in these conditions cannot compete with imported goods that enter the country at a lower cost and sometimes with lower quality.

Corruption and rent-seeking are the result of the expansion of unproductive activities

On the other hand, production requires structural reforms and conditions that make it a cost-effective activity for economic operators; not a cost-intensive activity in a maze of regulations, permits, and decisions of the people. Unfortunately, in recent years, we have witnessed that as the business environment has become more difficult and production has become more deserted, unproductive activities have become more attractive than in the past, which has resulted in nothing but increased corruption, rent-seeking, and a decrease in the motivation for productive activities.

Mohammad Irani, head of the Qom Chamber of Commerce, said in this regard: The government should adopt intelligent policies and facilitate conditions to direct the people's small capital into production and prevent these capitals from becoming players in artificial shocks in markets such as gold, the dollar, and housing. Directing these capitals into the production path can strengthen the country's economy, create jobs, and provide a platform for industrial prosperity.

He added: "The most important task of the government in this direction is to reduce administrative and legal barriers and bureaucracy; unfortunately, the government disappoints many investors at the stage of issuing licenses and starting activities. Facilitating the licensing process and clarifying the relevant laws can increase the motivation of investors and accelerate their activities. Also, by formulating and presenting attractive incentive packages such as tax reduction, granting low-interest bank facilities, and removing barriers to importing new technologies, the government can push investment into the field of production.

According to Irani, the government must equip the infrastructure of industrial estates and resolve problems related to the provision of sustainable energy, transportation, and industrial land. These issues are the foundation for attracting and retaining investors, and the government has the duty to provide these platforms with careful planning and decisive action.

The need for structural reforms

Accordingly, according to experts, in order to strengthen production, policymakers must provide the necessary platforms for production by carrying out structural reforms. Creating attractiveness in the production sector will automatically tip the investment balance in favor of productive activities, and many of the capital that today in our economy is wandering and speculatively creating turbulence in a market every time will be directed to the production cycle in favor of improving the economy and the welfare of the people.

Economic expert Sasan Shahveisi said in this regard: Over the past decade and a half, the formation of fixed capital in the country has been on a downward trend, and in some cases it has even decreased by 50 percent. In addition, the capacity building that has been carried out has not been able to lead to the formation of capital commensurate with the GDP, so a large gap has been created between the country's gross and net fixed capital.

He stated that if the situation is to improve, we must focus on production in policymaking and reform national incentives in favor of production. If this issue becomes dominant in the national discourse, many economic problems will be manageable, adding: The first solution is to financially support the flow of capital formation in the production sectors. The second proposed axis is to form a network at the intermediate level of industry and production. Instead of trying to develop integratedly, the clustering process can be activated.

Shah Veisi continued: Supply bottlenecks in the production sector must also be covered and risks minimized. Also, the financing conditions of production enterprises must be facilitated, including through effective credit assessment, increasing the ceiling of bank facilities, using securities for government debt, and accelerating access to financial resources from the capital market.

He stated: Entering into international economic agreements can play a fundamental role in marketing the country's manufactured products and improving the production situation internationally. We should also use the market mechanism and market pricing system to improve competition in the economy. Mandatory pricing and price suppression may solve some problems in the short term, but in the long term, it will lead to more problems.

We need a roadmap

According to Mehr, another point is that, as mentioned, over the past decade, the slogan has been centered on the economy for many years, but why, despite the continuous emphasis of the revolutionary leadership on economic discussions and concepts and the obligation of the country's senior officials and agents to fully and completely implement economic slogans, have we still not been able to achieve the minimum indicators of a dynamic economy?

Hossein Pirmozan, Vice President of the Iran Chamber, said in this regard: Not all of our problems are sanctions and external problems, but many of these problems are internal. As long as the government and policymakers do not pay attention to solving these current problems, these problems will become more institutionalized.

He added: "One of the main drivers of economic progress and development is increased investment, which can ensure the correct and desirable allocation of resources between different sectors of the country's economy in order to strengthen the domestic production base. Therefore, it is appropriate and important that government officials, legislators, and other decision-making institutions move towards comprehensive studies as soon as possible, away from a sectoral approach, and the cause and effect of investment in production and industry should be analyzed by reputable research institutions in the country." Pirmoezan emphasized: "Without an explanation of the appropriate strategy, investment in production will not happen. Although executives and government officials may announce some of their programs and activities throughout the year as part of the measures designated for that year, the vicious cycle of contradictory and short-term policymaking will lead the country's economy and production to destruction." In this regard, the government, as a policymaker, should pave the way for the private sector, rather than the government, as a competitor of the private sector, reducing production and making the path of the private sector uneven by incorrectly implementing laws and unscientific policymaking.

He emphasized: In the field of production and in a larger approach, namely the development path, until we reach an appropriate strategy, we will unfortunately be condemned to walk on an uneven and rocky path. In the current situation, the Iranian economy needs fundamental axes to be able to overcome the upcoming bottlenecks. These axes include: national consensus and determination and avoiding political tensions; formulating an industrial development strategy and creating developmental institutions and organizations; trusting young managers and eliminating inefficient managers who are not aligned with the policies of each ruling government. In fact, as long as contradictory and conflicting directives, night-time and moody policymaking and decisions, monetary and banking policies that disrupt production, inefficient and uncreative managers, old age, and annoying bureaucracy in social security and taxes are not eliminated from the economy and economic policymaking, the country's economic image will remain poor and ugly and unattractive for any domestic or foreign investment.

Accordingly, if investors can be assured of investment security, both domestically and internationally, the capital needed for production can be attracted, which is hoped to be achieved in practice this year by strengthening social capital and utilizing the capacities of the private sector.