TEHRAN, Iran, Nov.22
Trend:
Increase of gasoline price is aimed to reduce poverty of low-income class in Iran, said former deputy in ministry of labor and social welfare.
Economist and university professor Ali Sarzaeem discussed the increase of gasoline price and possible reduce of gasoline smuggling in an interview with Trend.
"While there is a difference in prices inside and outside the country, the gasoline is being smuggled; the difference is so huge that security measures do not prevent gasoline smuggling," said the economist.
"Since we can not reduce the world rates, we have to increase the price in the country. There has been price gap, especially when there is low purchasing power and income. The issue is that there should be economic growth in order to have high income; suppressing price can not create economic growth. The question is whether we can keep the gasoline price low, while the price has been down for many years," Sarzaeem said.
"We did not have capacity to produce gasoline in the past, so we had to import gasoline and diesel spending multimillion dollars for the purchase. It would be better, if the sources are used for reducing poverty, and building infrastructures," the economist added.
"People should understand difficult decisions are made for their own interests. For example, increase of agricultural price has led to increase of cultivation and counter immigration from city to villages, and profit in agriculture sector has increased. The increase of prices has led to increase of profit in companies that will improve employment and production and will lead to economic growth," Sarzaeem said.
"In terms of industries activities, half of industries have grown, while the other half reduced production. In general, Iran's industrial growth was negative since many industries depend on imports," he added.
"If there were not changes of prices, the country's economy would eventually get worse," Sarzaeem noted adding that the increase of gasoline price is a solution to reduce poverty.
"The first priority is to eliminate poverty; decrease of purchase power of low-income group can not be even compared with that of middle classes," the economist said.