Eshaq Jahangiri, First Vice President of the Islamic Republic of Iran, provides a unique insight into the country’s economy, progress and potential for partnerships, particularly in connecting with companies in the EU.
How do you think the recent nuclear deal will go into Iran’s history and how does this change Iran’s role to protect peace and security within the region?
The nuclear deal was an important negotiation. Some countries created the unfounded excuse that Iran is moving towards nuclear military activities. These unfounded excuses put Iran under economic and political pressures, by imposing unjust sanctions on Iran. However Iran’s current government started new talks with the 5+1 countries, which were highly complex. We were following three important goals throughout these negotiations:
1. We must safeguard our nuclear achievements,
2. Our nuclear rights have to be recognized according to international laws,
3. Unjust sanctions must be lifted.
On the other hand, the world wanted to make sure that we are not moving toward nuclear weapons. I believe that we achieved mutual win-win goals defined prior to negotiations. Our nuclear achievements were safeguarded and our nuclear rights were recognized in the framework of international laws set by the UN Security Council, and sanctions have been lifted.
Naturally, even before nuclear issues, Iranians have always been civilized people that had good and proper relations with their neighboring countries. They had an important role in human civilization, and of course after lifting the sanctions we are renewing good relations with neighboring, regional and European countries, which will move towards peace and expanding economic relations.
The sixth development plan is targeting an annual growth rate of 8% and looking to reduce unemployment and inflation rates to a single digit. What are the current plans and strategies in place to improve the quality of life of Iranian people?
About 10 years ago an important document was ratified in Iran called “20 years Development Plan Perspective”. According to that document, at the time of speaking, in 10 years time, Iran must be the first economic and scientific power in the region. According to that document, we should have an annual growth rate of 8% but unfortunately in its first 10 years, due to different reasons like sanctions, and lack of proper policy making we couldn’t reach that 8% growth.
Right now we are facing two or three challenges. Our people’s welfare and their income have decreased. The unemployment rate and the number of jobless youth have been increasing in recent years, while Iran will have about 1 million university graduates each year. In previous years investment has had a negative trend. These are some of the challenges that we are facing.
Naturally we want to work out a plan to help us overcome these challenges. To achieve proper employment we need to create adequate investment. Our studies show that, at least 8% growth is needed to adhere to our plans. Supplying sources is our important limitation. Iran is a country that has a lot of internal potential. Combining oil and gas resources, Iranian will be first in the ranking. We have strategic coastlines in the south, on the Oman Sea and the Persian Gulf.
Iran itself has a population of 80 million people, with a highly educated youth. Iran reaches out to a population of 400 million people through its neighboring countries, and some of these countries are landlocked. Iran offers more than 60 different minerals. In the region, Iran is known for its infrastructure permitting industrial development. Our industrial blueprint and plans started at the same time as countries such as South Korea, from which we have prepared our industrial background in Iran. These challenges and these opportunities can get us to reach 8% growth. Lifting sanctions paved the way for Iran to move towards a suitable place for economic activities, while moving its own economy forward and it will help to pull the world economy out of recession.
Thus developed countries should think about Iran for direct investment and the financing of good production benefitting Iran’s market and the regional market as well. Iran could take advantage of these opportunities. On the other hand, Iran is the only safe country in the region. You know that one of the goals of Daesh and Al-Qaeda was to destabilize and create insecurity in Iran. Thank God, this did not happen, making Iran the safest country in the region, which, in fact, helps attract investors.
The doctrine of the “resistance economy” envisioned by the Supreme Leader is often misperceived and misunderstood outside Iran, even though it is a doctrine to protect the national economy against external shocks and to increase domestic production and attract foreign direct investment. How would you decode the positive impacts of the resistance economy doctrine?
You know, I am responsible for implementing the resistance economy doctrine in Iran. Two major goals have been envisioned for the resistance economy:
1. Protecting the economy against external shocks. With this I mean that when there is an economic downturn like the one we saw in East Asia or Europe, it should not have any immediate effect on Iran’s economy.
2. Strengthening Iran’s economy against sanctions. Those who stand against the Islamic Revolution have always tried and are trying to impose sanctions with different excuses against Iran and it is not farfetched to realize that they will continue these policies in the years to come, So it is better to strengthen our economy in such way that we can stand tall against such sanctions.
The resistance economy has five important approaches:
1. It must be an indigenous economy (indigenous growth economy), which means to use all the national capacities and capabilities like petrol, gas, and manpower. Also to safeguard the current investments inside or within the country.
2. It must be an outward-oriented economy and interact with the world. What we want from the world is technology, a market and financing. Our economy should be able to interact and relate with different countries and different economies.
3. It must be a public economy. The government retains back while people play the important role, as it is the people and private sector that should play the main role in Iran’s economy.
4. It must be a knowledge-based economy. This means for Iran’s economy to adopt modern and up-to-date technology. Thus developing science and technology is one of our main strategies in the resistance economy. According to reports done by international institutes, Iran is ranked first in science in the region.
5. It must be a justice-oriented economy. This means that it must pay attention to all people in society, while they shall benefit from those policies.
All these approaches must override the country’s economy. Different policies have been drafted and are in the process of finalization. We have defined different projects to accomplish this. For example, one of them is in the gas and petroleum sector. We have shared gas and oil fields. Extraction from these shared fields is our first priority. We should prevent exporting raw materials (staples) and we should create added value from them. Almost all economists in the country have reached a consensus on these policies. The most important capital of the resistance economy is that it has become a national solidarity factor. The Supreme Leader, the government, all thinkers and the parliament all support these policies.
What does Iran’s industry need to become more competitive and what is the government doing to overcome the obstacles to have a healthier business environment?
Iran’s economy is suffering from two problems. Oil revenue is an important income that was not used relatively to develop the country. Actually, when oil income had been high, the policies rested on solving the country’s issues by importing using those high incomes. At times when oil income was reduced, it caused some problems in the economy. On the other hand, Iran’s economy being centralized has a great impact on the limitations and the uncompetitiveness of the economy. After the Iran-Iraq war, different policies were ratified to reduce the government’s reliance on oil income. Also, different policies were ratified to privatize government-owned sectors. Until now I can’t tell you that these policies were successful. I mean, as mentioned before, the government and oil income play important roles in Iran’s economy. The most important job to do is that the government should not be in competition with the private sector anymore. This is the most important thing to be done. The government should have a smaller role focusing on making policies only and have an observatory role, while the private sector plays the main role.
Also the most important job to do is that government-owned companies need reforms. Defective structures can be found at times in their manpower, in their technological structure or in their capital structure. When I was the industry minister, I introduced a plan to modernize Iran’s industry. My goal was to have reforms in the macro economy and at the same time reform the government-owned companies. This time, I will monitor these reforms happening simultaneously. We are moving to join the WTO, whose membership we requested a long time ago. Right now we are an observer and expect to become a permanent member of the WTO soon. This will surely help us to reach a competitive environment in Iran economy, necessary for Iran’s economy.
Iran is making headlines in every continent, having received over 200 official visits in the last year, with around 60% of them coming from E5+1 and other EU countries. Why is Europe in pole position today to enter Iran?
Europeans have traveled more to Iran because in recent years they have excluded themselves from Iran’s economy. Chinese and Russians have been coming for many years now. Even Japanese and Koreans have been coming regularly to some extent. It is natural that when conditions change, Europeans should come too. At the time when I was the industry minister, some European countries like Germany or Italy, were industrial partners of Iran by themselves. In general, the European Union was the first industrial partner of Iran before the sanctions hit the export and import of goods, such as oil both on volume of trade and volume of import. Major Iranian industries have been built based on European technologies. In Iranian steel, copper, and car factories, gas, oil and petrochemical companies, Europeans have had some roles. After the West imposed sanctions on a great country like Iran, we worked on our own and worked hard. Right now it’s a new opportunity for Europeans. Iran has a long history of cooperation with European countries thus our experts based on this background like to work with Europe. We do not have any limitations for European companies to come to Iran and share investment with Iran’s private sector. In different industrial sectors, the mining sector and for infrastructure, we welcome European companies.
There is a clear difference between how the international mainstream media is portraying Iran and the real Iran. How important is it to effectively communicate the real face of Iran internationally and within the country?
Well, in recent years opposing powers had a couple of items in their agenda against Iran, and the media practically working hard on that. One of these agendas was Iranophobia. They have shown an image of Iran that has made people around the world, or at least in the West, frightened of Iran. Without even knowing where Iran is, people talk about the dangers that Iran might bring? Did you know that right now there is a US judge that condemned Iran because of what happened on September 11, 2001? This is ridiculous for everyone who has the least knowledge of Iran, which had nothing to do with and was not at all related to 9/11. All the people who were involved have been identified. No Iranians were even involved. Most of them were from Saudi Arabia or related to Saudi Arabia. They themselves have established Al Qaeda. There is no relationship between Iran and Al Qaeda.
When an unjustified court condemns Iran, it shows that the courts are working on a cultural-political project against Iran. They are working to influence people who have no idea about where Iran is. Earlier, they were working to generate Islamophobia as they diffuse negative propaganda against Islam. Recently, international media has been working to generate Shiaphobia to put Iran under pressure. They announced that Iran is supporting Daesh, but no member of Daesh or Al Qaeda is Shia. Iran is not supporting their acts, explosions and any of their measures. This is a cruel job that they are doing against Iranian. For years foreign media propagandized that Iran is working to develop the nuclear bomb. And it is through this negative propaganda that they imposed different sanctions, including sanctions on basic goods like medicine and food. It is clear that Iranians are hurt now, confronted to such a world and that they are suffering from being treated based on some inhumane goals. The main mission of this government is to end this situation and show the real face of Iran to the world. During Mr Khatami’s presidency, he proposed the initiative of “Dialogue among Civilization” at the UN. The UN General Assembly passed with a unanimous vote of 190 countries the bill and named the year to be the year of “Dialogue among Civilization” and the initiator was the Iranian president then. When President Rouhani entered the UN for the first time, he brought up the initiative of “A world free of violence and extremism”. These two subjects were most welcomed by people all around the world, and they were subjects proposed to the UN General Assembly by two Iranian presidents.
The media has created a situation against Iran and we should change this situation. Our people have expectations. They are cultured and civilized people. Iranians are interested in having relations with the world. Iranians are interested in trading with other countries. Iranians are interested in having cultural exchanges with the world. Today, in the US and Europe, among the most educated and successful minorities are Iranians. They have companies and trading businesses abroad. Such a people with known backgrounds, absolutely like to have links with the world, however they do oppose those oppressive sanctions, while working hard to diffuse all those allegations and try to project those truths to the world with the help of all media whose values are projecting realities… eventually giving the people of the world the real picture.