Iran must be ready to listen to foreign experts who can help it lower inflation down - expert
Azerbaijan, Baku, Nov. 23 /Trend S.Isayev/
Iran has to be ready to listen to foreign experts that can offer valuable advice on how the country could stabilize its currency rate and lower inflation, but it should be ready to heed the councel, U.S. Northeastern University Professor Kamran Dadkhah told Trend.
Dadkhah was commenting on the possible options for Iran to deal with high inflation rate, and unstable foreign currency rate.
Official Iranian sources have said the inflation rate in the country is 24.9 percent, and the International Monetary fund said in its report that the country will be able to lower down that rate to some 21 percent.
Many experts believe that if the situation in the country stays the same, the inflation will continue to grow.
"First, we should note that Iran's official inflation figures do not reflect the true extent of inflation in the country," Dadkhah said. "The runaway inflation and the severe depreciation of the Iranian currency have their roots in the mismanagement of the economy in the past 34 years, and the isolation of Iran in the international community and sanctions."
Dadkhah said that Iran's government has constantly spent more than its revenues and financed the deficit by printing money and increasing the liquidity in the economy.
"In addition, banks have extended credit for dubious activities and especially to those close to the center of power," he said. "These activities have resulted in corruption on unprecedented scale".
Dadkhah believes Iran can bring its inflation under control, and stabilize its exchange rate, yet it would require specialists to handle the issue.
"Other countries which have faced similar problems have showed the way. First, there has to be a political will to bring inflation under control," Dadkhah said. "Second, there has to be recognition that only experts in economics and financial affairs could carry out the task".
"There are many competent economists inside Iran, but usually the positions are given to yes-men and yes-women who pretend to be devout and faithful to the regime," he said.
Professor noted that on the other hand, sanctions have made it difficult for Iran to benefit from foreign direct investment, and what's worse - it has been cut off from the international financial system.
"As a result there has been a reduction in the import of many goods. In many cases Iran has been forced to resort to barter trade and to accept low quality products in return for oil export," Dadkhah said.