Country Presentation in 8th ILO/IOE/CAPE High-Level Asia-Pacific Employers Conference
8th ILO/IOE/CAPE High-Level Asia-Pacific Employers Conference Kyoto-Japan, 3 December 2011
Country Presentation, by Iranian Confederation of Employers’ Associations (ICEA),
Tehran-Iran, I. R. of,
It is our pleasure to be present at this "Conference". Having the opportunity to share, some of our thoughts and concerns with this meeting is so special.
We thank the ILO, IOE and CAPE for organizing this meeting and also appreciate the government of Japan for its hosting.
Mr. Chairman, ladies and gentlemen,
The current global economic downturn impacted differently across countries and regions. In my own region of Asia, many countries confronted the crisis without banking failures, and with only minor and short term reversals in employment growth. However, many face the ongoing impact of downturns in their export markets and fluctuations in global demand.
For my country, the I. R. of Iran, the greatest shock was global "trade" turmoil, not the financial itself.
Considering the current situation, at international and national level, there are number of factors holding back the achievement of sustainability and viability of the Iranian private sector, which I would like to share with this gathering.
1) Although the I. R. of Iran has not felt the economic back lash to the same extent as other countries, but due to the heavily reliance on oil export, its economy has been affected by the reduced oil revenues The government faced with budget troubles, has been unable to entirely fulfill its remittance-related commitments, with respect to the state-owned infrastructure projects which are driving force for the private sector activities in the country.
This problem has been compelling the private sector to certain layoffs and inevitable delays, in some cases for months, in payments of wages. If this trend continues, it could be even harder for our employers to enforce fiscal discipline and sound labor management, in the future.
2) Through the execution of the "Target-Oriented Subsidies Plan", the government cut subsidies on major food and energy products, in a bid to annually shave, about billions of dollars, off the public expenses. The government deposits the cash subsidies in the peoples’ accounts. ICEA argues that the amount gained from the scraped subsidies must be transferred only to vulnerable and deprived households, and not to almost three fourth of the people that are now receiving the cash transfer, while the remaining should be channeled to the country’s developmental projects. This policy will lead to fostering and developing the private sector, result of which will be further and further job opportunities.
3) Politically-tainted west’s attitude towards Iran nuclear program led to imposed sanctions on the country. Due to the sanctions, international banks are hesitating to get involved with financing business with Iran. Sanctions-related banking restrictions have made it increasingly difficult, for the Iranian private sector, to access international banking services. This is a very challenging question that we are hoping to be dealt with by its depoliticizing, and be resolved through diplomatic channels.
4) In my country, the state-owned and run economy system has been prevailing for a long time. Existence of a public monopoly as compared with only 17/18 percent of private business has made it almost impossible to create a healthy competitive environment for desirable functioning of the private sector.
To remedy the situation, the policy of privatization has placed among the top priorities of the country’s economic program. However, the pace and scope of this reform is not very significant,
Additionally, shortage of adequately business training and education for young entrepreneurs with support for improving access to finance, and existence of a variety of difficulties in starting and improving business has resulted in the expansion of informal economy in the country. Formalization of the informal economy in my country is an absolute necessity.
Given the situation, my organization, ICEA, has been trying to play its role in fostering public-private partnership in dealing with barriers facing the business community. It needs, however, to further knowledge and capacity development, if it is to effectively influence policy discussions and decisions.
My organization has been requesting the Office, in many occasions, to launch an inclusive technical cooperative program helping to enhance its capacity and capability in performing required lobbying and advocacy, while providing better services to its member associations.
We are hoping that the very recently mission, to Tehran, of the ILO New-Delhi based Regional Office senior expert, Mr. Gotabaya, will lead to development of a comprehensive technical assistance with ICEA.
Mr. Chairman, ladies and gentlemen,
I conclude my remarks by stressing that the ILO needs to:
Firstly, develop "contingency plans" to help SMEs improve productivity and sustain their business during the crisis.
Secondly, help constituents meet the demands for strengthening the capacity of the social partners and labor administration.
Mr. Chairman, distinguished delegates, I appreciate your attention.