By Mahnaz Abdi

Offering basic goods at IME for regulated market, flourished production

June 24, 2019

Supplying basic goods is one of the major issues on the Iranian government’s agenda in the current Iranian calendar year (started on March 21) and it is one of the focal pillars in the national budget bill for this year.

In this due, the government is taking numerous strategies for the supply of these goods. One of them is allocating foreign currency for the imports of basic goods through domestic Forex Management Integrated System (locally known as NIMA) which allows importers to supply their required foreign currency without specific problems.

Also, following a directive by President Hassan Rouhani, Islamic Republic of Iran Customs Administration (IRICA) is providing new facilities for importers of basic goods which makes them able to clear their commodities in less than an hour, as last month announced by IRICA Deputy Director Mehrdad Jamal Orounaqi.

The official said that for basic goods such as meat, system formalities and clearance procedures will be carried out in less than an hour and importers can transport their goods soon after.

All such measures are taking for the supply of basic goods, while some actions are also required for a regulated market for these goods.

Many capital market experts believe that offering basic goods at Iran Mercantile Exchange (IME) can help the government regulate and control the market in a better way.

In an interview recently conducted by IRNA, Hossein Khezli Kharazi, a capital market expert, said, “Mercantile exchange was set up in our economy with the aim of fair price discovery. The best way for discovery of the fair prices of basic goods is relying on a supply-demand mechanism and IME is the only transparent market for this purpose.”

Through transparent statistics obtained via IME, the government can even allocate subsidies for the basic goods, he added.

Setting prices for the basic goods makes the markets face two rates (official and free market), it is why the experts suggest the government offer the commodities at stock exchange to discover the real prices.

Offering basic goods at IME is also a strategy to realize the motto of “Flourishing Production” given that the current Iranian calendar year of 1398 is named as the year of "Pickup in Production" by Leader of the Islamic Revolution Ayatollah Seyed Ali Khamenei.

Mohammad Hassan-Nejad, a member of the Economic Committee of Iranian parliament (Majlis), believes that the Year of Pickup in Production requires combatting and removing rent-seeking and one of the ways to such goal, which can be materialized through cooperation of Majlis and government, is offering basic goods totally at IME.

He says, “If we want flourishment of production, there is no doubt that we should lay the ground for transparency and competition in the market. So, I recommend that the government offers basic goods and raw materials completely at the IME so that there will be no place for rent-seeking.”

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