Page 14 - IRANRptJun19

4.1 Industrial production
Iranian president tasks officials with creating a “production boom” in face of US sanctions
Iranian government offers industrial facilities IRR200tn to help with economic downturn
Iranian President Hassan Rouhani has tasked ministries and state bodies to pursue measures that will create a production boom and has ordered the removal of barriers to foreign investment that could be delivered by expatriate Iranians, Mehr News reported on May 20.
Iran’s economy is reeling from the unprecedented US sanctions regime aimed at everything from the automotive sector to oil, gas, petrochemicals, metals, banking and nuclear technology , among many other areas. Foreign investment has plummeted with large players like Total and PSA Group exiting the country. The Islamic Republic finds itself sinking into a deeper and deeper recession. In April, the IMF predicted its economy would contract 6% this year—but that forecast was put together before the US, from May, started a campaign to drive Iran’s lifeline oil exports to zero. The road ahead could therefore be that much more torrid.
The president wants the scrapping of unnecessary and redundant regulations and the relaxation of rules for inward investment where possible.
Iran‘s Cultural Heritage, Handicrafts and Tourism Organisation (CHHTO) has been tasked with attracting more inbound visitors by whatever means are necessary and feasible.
Rouhani also called on agriculture officials to make the country more self-sufficient in the production of vegetables and meat. However, where imports are necessary to protect the population from shortages, they must be continued with, he added.
Iran’s Rouhani administration has created a special emergency fund with capital of IRR200tn (€1.29bn) to assist industrial enterprises struggling to cope amid the country’s recession, IRNA reported on February 27.
Iranian industry in Iran has been ravaged in recent months by the collapse in the value of the Iranian rial (IRR) and consequent increases in raw materials prices, a situation sparked by the reimposition of heavy sanctions against Tehran by the US last year. Several thousand companies have either cut their workforce or shut down completely due to supply chain failures and clients that proved unable to pay invoices.
According to Minister of Industry, Mining and Commerce Reza Rahmani some “10 trillion tomans [IRR100 trillion] have been allocated from the resources of the banks and 10 trillion tomans from the resources of the National Development Fund [NDF]”.
The funds will be offered in the form of five-year loans with interest rates below the rate of inflation. Two applicable rates will be 14% for enterprises in large cities and 12% for industries seen as facing particular hardship.
Twelve repayments on the loans will be expected annually, with a six-month grace period allowed at the beginning of the loan period
The programme will be operated with the website www.behinyab.ir .
The government has been forced to dip into the NDF in recent months
14 IRAN Country Report June 2019 www.intellinews.com