The Forum for Partners in Iran's Marketplace

January 2020, No. 93


“Ministry of Commerce”
a New Excuse to Re-establish

“We cannot blame all the current problems in the economy and provision of the people’s livelihood on the absence of the Ministry of Commerce.”

Creation of the Ministry of Commerce and its separation from the Ministry of Industry, Mine and Trade had sufficient opponents, with the government now firing the last shot and by defining a mission for the new ministry to maximize the criticisms against this decision.

The mission of the Ministry of Commerce is defined thus: “to regulate the market, control prices, allocate limited resources, and supply essential commodities to the people.” This is what Jamshid Ansari, Head of Iran’s Administrative and Recruitment Affairs Organization (ARO) uttered in the Parliament (Majlis) on the necessity of separation of the Ministry of Commerce. He said “a different mechanism, such as the Ministry of Commerce, should be devised to regulate the market.”

Earlier, President Hassan Rouhani had said: If the Ministry of Commerce is established, next week people’s lives and markets will be improved by timely controls on exports, imports and commodity prices.”

But is this structure and organization the solution to Iran’s economic problems? Mehdi Ghazanfari, Ahmadinejad’s minister of commerce and the former minister of industry, mine and trade called the promise of week-long deadline for market overhaul a “kind of scam” and said: “When advisers give the wrong address, the President will shoot at the wrong target.”

Former deputy minister of industry, mine and trade Mehdi Karbassian had also said: “We cannot blame all the current problems in the economy and provision of the people’s livelihood on the absence of the Ministry of Commerce. The problems of the market cannot be resolved overnight.”

But it seems the government has a hand in the hoax and has also a justification for its actions and endless promises. This even led to criticism from the Majlis. For example, MP Seyed Mohammad Hosseini said that if we cannot apply market-oriented policymaking we should not justify our inability by formation of a new organizational structure. Seyed Taqi Kabiri, a member of the Parliament’s Economic Commission, also said that the weakness of the management and the allocation of cheap foreign currency (42,000 rials per USD) had caused economic problems and this had nothing to do with the separation and integration of the ministry.

But the government seems to want to take a course that has already been taken. This is the second time the Ministry of Commerce has split up to regulate the market. Then it is the turn of the next government to find out that the problem will be resolved by reintegrating the ministry and the process of connecting the organizations and structures in the Iranian economy would be continued.

But instead of insisting on the separation of ministries and the formation of duplicate structures, the government had better answer the question that even if market control and pricing is the right policy, why have so many regulators failed to bring the market under control? What were the weaknesses of the previous structures and what advantage does the new ministry have over the others?

The new structure has been formed and it will probably take a few months for the government and the Parliament to appoint a minister and get a vote of confidence and changes, and the new ministry may not be able to function in the current government. But I wish now that the government has formed such an organization, it would at least assign it a good mission. Instead of controlling the domestic market, it should focus on opening foreign markets and expanding foreign trade rather than domestic trade. It’s a good mission that none of the wide and long institutions and organizations is involved with.


Subscribe to

  January 2020
No. 93