Economy
Mon, Oct 22, 2007
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Overseas Workers Remit Over $2b
Ministry Mulls
New Employment Policies
Fresh Warning Against Inflation
Saffron Price Hike Harmful
By Sadeq Dehqan
IMIDRO Privatization In the Pipeline
Nat’l Export Day Observed
Security Vital in Internet Use

Overseas Workers Remit Over $2b
Migrant Iranian workers abroad remitted over two billion dollars home in 2006, according to a study released by the International Fund for Agricultural Development (IFAD) and the Inter-American Development Bank (IDB).
The report by the United Nations specialized agency indicated that the $2.3 billion remitted to Iran last year by oversea workers accounted for one percent of gross domestic product (GDP), IFAD reported.
Figures in the new study differ with those released by the World Bank.
The official news agency IRNA earlier quoted the top UN body as reporting that remittances sent home by overseas Iranian workers exceeded one billion dollars in 2006.
According to the IFAD study entitled ’Sending Money Home: Worldwide Remittances to Developing Countries’, migrants working in industrialized countries sent more than $300 billion to developing nations. Remittances are generated by 150 million workers.
Asian workers sent more money--$114 billion--to the continent last year than any other region. Latin America and the Caribbean were next, together receiving $68 billion.
Taking nations individually, India was the top destination, receiving ($24.5 billion), followed by Mexico ($24.2 billion), China ($21 billion), the Philippines ($14.6 billion) and Russia ($13.7 billion).
Established as an international financial institution in 1977, IFAD is dedicated to eradicating rural poverty in developing countries.
In a related development, director of Ministry of Labor and Social Affairs’ Department for Employment of Foreign Nationals put the number of foreign migrants working in Iran at over 11,000.
“More than 11,000 foreigners are engaged in various industrial, energy, aviation services sectors, trade, export and import, giant oil factories…,“ said Mohammad Hussein Salehi-Maram on Sunday.
Talking to ISNA, he elaborated that these workers are professional and usually work in units in which employers need their skills.
Iran has to employ foreign specialists for short period to install new equipment imported for industrial projects, the official added.
Salehi-Maram noted that the number of foreign workers has declined this year compared to the figure for the year to March 2007, adding that this is because they train Iranian workforce.
Turning to illegal workers, the official said, the department announced a decision to issue six-month work permits for 300,000 foreign nationals.
Charges for work permits would be between 500,000 ($53.4) and 700,000 rials ($75), he concluded.

Ministry Mulls
New Employment Policies
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A handicraft shop in a self-employment marketplace in Tehran's Laleh Park
Receivers of self-employment loans have now turned into unemployed debtors, observed deputy labor minister, Hamid Haji Abdolvahhab, adding that Ministry of Labor and Social Affairs plans to change its job creation policies, reported ISNA.
“Since self-employment loans were extended to individuals without thorough evaluation of market needs, these people have become jobless debtors,“ explained the official. This process occurred repeatedly in the past as well, he stressed.
Haji Abdolvahhab underlined that the ministry does not currently expand self-employment units without assessing the markets.
Since the markets were not identified to assess the demand for their products, they mushroomed in a short period. These factories had to compete with many rivals and their products and services had no customers, he elaborated. “As a result, they could not repay their loans and became debtors.“
The ministry, the official said, plans to refrain from supporting saturated units and would focus on identifying market needs to inject new ideas into this field.
He added that the ministry would also pay more attention to large- and medium-scale institutions and less heed to self-employed units.
Underlining that the new decision is not a trial and error policy, Haji Abdolvahhab said, “Why should we extend loans to units producing goods and services whose markets are saturated? We want to target repayments of loans.“
The official underscored that new job opportunities should be created on the basis of development and need of market.
Unemployment rate reached single-digit figure in summer, according to a report by Statistics Center. The center put the rate at 9.9 percent.
Concerned about high unemployment rate and having young population, officials are pursuing plans to create new jobs.

Fresh Warning Against Inflation
Unless the government adopts proper strategies, inflation rate would rise above 19 percent in the near future, an economist observed.
Jamshid Pajouyan, a university professor, told IRNA on Sunday that expansionary policies, increase in state expenditures and liquidity contribute to inflation rate.
“I have warned the government about inflation in the past seven-eight months and still believe the rate would rise again in the future,“ the expert underlined.
On the government’s policies to control inflation, Pajouyan explained that it brings down the rate through imports.
He warned that the rate would rise further if consumer goods did not include a large number of imported commodities.
International Monetary Fund (IMF), in its latest report, predicted 19-percent inflation and six-percent economic growth rates for October.
Pajouyan explained that the figures are provided to it by the Central Bank of Iran (CBI). But the top international body, in addition to announcing the figures, provides economic interpretations for them.
The main problem facing the economy is micro-economic issues, the academician stressed.
“Although macro-economic indicators such as inflation are important, the national economy is mainly plagued by micro-economic issues including allocation of fund and relative costs.“
A CBI report on October 9 put the inflation rate at 15.8 percent during September 20, 2006-September 20, 2007.
According to data released by CBI’s Economic Statistics Bureau, price indices for goods and consumer services in Iran’s urban areas increased by 2.5 percent in September against the figure for the previous month and 17.9 percent compared to the level for September 2006.
Inflation rate was 12.8 percent in April, 13.6 percent in May, 14.2 percent in June, 14.8 percent in July and 15.4 percent in August.
The rate is calculated on the basis of the prices of 359 goods and services in the urban areas of Iran.

Saffron Price Hike Harmful
By Sadeq Dehqan
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Domestic producers do not use quality and attractive packages to lower production costs.
Increase in price of domestic saffron has endangered Iran’s presence in global markets. The price hike, which began in the year to March 2007, has caused Iran to lose the market.
Experts caution that if the upward trend continues, competitors such as Afghanistan would increase production and attract the customers.
According to them, hoarding of the precious spice by profiteers and export in bulk quantities (in a bid to earn more) are responsible for the price hike.
Although Iran produces the top-quality saffron, poor packaging and improper export policies have led to the market being dominated by other countries.
Currently, Iran produces 165 tons of saffron per year. However, even United Nations’ Food and Agriculture Organization lists Spain, Greece and Kashmir--with a total production of less than 10 tons per year--as saffron producers.
Head of Tehran Herbal Medicine Dealers Association Majid Tootoonchian told Iran Daily that the price of saffron has quadrupled in the past 18 months. He said that currently, top-quality saffron is valued at between 16.5-17.5 million rials per kilogram.
The official explained that saffron output was lower in the year from March 2007. He attributed the price hike to the bulk purchase and export to other countries, particularly Spain.
Tootoonchian elaborated that Spain puts Iranian saffron in good packing and reexports it as Spanish brand.
Although about 80 percent of global saffron is produced in Iran, Spain has become a leading saffron exporter, he regretted.
To lower production costs, he said domestic producers do not use quality and attractive packages for their products. However, global customers attach great importance to packing, he said.
Therefore, producers lose a huge volume of value-added, he noted.
The official said that Iran’s saffron is of better quality than those of its rivals. Due to climatic conditions, Iranian saffron has better color and aroma, he concluded.

IMIDRO Privatization In the Pipeline
Over 41 billion rials worth of shares of Iran Mining Industries Development and Renovation Organization (IMIDRO) will be floated in the stock market by March.
Announcing this, IMIDRO chief, Ahmad Ali Haratinik said that the stocks would be either put on sale in the steel, copper, mine and cement group or distributed as ’Justice Share’.
According to the official, the current capital of the organization stands at over 32 trillion rials.
Until March 2007, IMIDRO had an above 50-percent share in 32 companies and below-50-percent share in 29 firms involved in steel, copper, aluminum and mining production, MNA reported Sunday.
Among the country’s 100 top companies, the organization ranked ninth in assets, third in sales and net profits (before tax), fourth in the number of staff and second in exports, the official said.
Haratinik stated that over 93,500 billion rials of products produced by IMIDRO were sold last year, showing a 84-percent growth compared to the figures for the year to March 2006.
According to the official, steel products accounted for 61 percent of the sale, copper comprised eight percent, aluminum six percent, cement two percent and other products four percent.
Haratinik, also a deputy minister of industries and mine, said that some $2,457 million worth of IMIDRO output were exported in the year to March 2007.
Some 91 projects with an investment of $11.3 billion and 90,000 billion rials are being implemented by the organization, he said, adding that the plans would become operational by 2010.
Majority of operations conducted by IMIDRO is in the field of mining explorations.
He noted that the organization is the leading state institutions in terms of transferring affiliate companies to the private sector.
By March 2008, some 51 percent of Khuzestan Steel Company, worth 5,000 billion rials, would be sold in the bourse. Transfer of 20 percent of stocks of Mobarakeh Steel Complex, valued about 10,000 billion rials, are on the agenda.
Shares of state-owned companies and organization are transferred to the private sector in line with Article 44 of the Constitution. The article seeks large-scale privatization in key economic areas and downsizing the government.

Nat’l Export Day Observed
The eleventh National Export Day was marked on Sunday in a ceremony attended by First Vice President Parviz Davoudi, Commerce Minister Masoud Mirkazemi and Deputy Commerce Minister Mehdi Ghazanfari.
Speaking at the gathering, Ghazanfari put the volume of Iran’s non-oil exports at $7 billion during the first half of the year to March 2008, IRNA reported.
He noted that 3,000 kind of goods were exported to 142 countries during the same period.
Ghazanfari, who is also the head of Trade Promotion Organization, named UAE and Iraq as Iran’s top two trade partners respectively.
“Iranian companies have signed contracts worth $709 million with different countries,“ he stated.
Concurrent with the event, the first commerce radio was officially inaugurated by Davoudi and Mirkazemi.
Referring to the importance of Iran’s presence in international markets, Mirkazemi remarked that the radio provides a good opportunity for informing the world about the latest in the commerce sector and maintaining a suitable interaction between economic activists and those involved in different business.
According to the report, the radio is on the air for four hours daily from 0630 hrs GMT on the frequency of 102.5 MHz FM.
The ceremony was also attended by members of parliament and officials in the export sector.

Security Vital in Internet Use
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Security and expansion of information technology should be developed in parallel.
Statistics indicate that about 89 percent of Iranian Internet surfers use Yahoo email address which is detrimental to security, deputy minister of information and communication technology (ICT) said.
Speaking at a conference on the security infrastructure of Internet network, Abdolmajid Riazi further said that both security and expansion of information technology should be developed in parallel, adding both should promote each other, ISNA reported.
He explained that there is a general guideline on IT development which includes surfers, functions and infrastructures.
The official added that security is important in all three cases.
Riazi proposed that planning should be made to ensure the security of information exchanges. He also called for international collaboration since Internet network is not a local and restricted area, he said.
The deputy minister pointed out that school goers, university students, professors, teachers and employees constitute the majority of domestic surfers.
Turning to the national Internet network, he said this unified network which attaches great importance to security, should be launched by the end of Fourth Five-Year Development Plan (2005-2010).
Minister of Communications and Information Technology Mohammad Soleimani said last May that the cabinet had approved a plan to set up a national Internet network.
He noted that the cabinet authorized Iranian Telecommunications Company (ITC) to spend 5,660 billion rials on launching the network within three years, IRNA reported.
“Efforts aimed at designing the national Internet network have proven to be useful and components of the plan are in place,“ he said.