Regulations exist irrespective of your God, it seems, and Iran is hobbled by them. Alireza Ramezani on AL Monitor reports on the efforts of Iran’s administration to reduce its unemployment level from 12.6% – and one of its biggest obstacles:
Another issue of concern is the excessive red tape, which has been ignored in the government’s employment plan. Hamid Deihim, an economist at the University of Tehran, sees the red tape as a major obstacle that has made investors give up on enterprising. The World Bank’s Doing Business index for Iran got worse in 2017, dropping to 120 from 117 the year before. The index for Starting a Business also fell five units, reaching 102 in 2017. It takes Iranian applicants several weeks to have a company registered, disregarding the potential need for additional licenses from relevant organizations and ministries. This process takes only a few days in the United States and Europe, where applicants are free to have home offices. In Iran, applicants have to rent an office before starting their business, and therefore have to pay extra expenses for the establishment of a new enterprise.
Emad Azimi, the head of the Research Department at the Management and Planning Organization’s branch in Markazi province, in a May 28 op-ed in Donya-e Eqtesad urged the government to eliminate parallel and conflicting regulations when it comes to starting a new business. He said that employment can only be boosted if regulations are eased. However, measures to ease doing business in the country is a dream that can only become a reality in the distant future. As Rabiei has noted, single-digit unemployment rates require a “long-term” comprehensive solution that involves political and economic stability, elimination of red tape, eradication of economic rents and rent-seeking behavior, a skillful workforce and required investment. Thus, unemployment will in all probability continue to remain a source of concern for the authorities — until and unless the government provides a transparent competitive business environment for the real private sector to get the economy going.
Regulations are an important part of any modern economy – but they also are a portal for any old person to stick their hands in and gum up the works.
