In criticizing the car lottery; Did you see that the problem was not with the systems?

Economy Online-Poya Dadjo; Since 2017, Iran’s economy has entered a new phase of inflation; From 1358 to the beginning of 2017, the country’s average point-to-point inflation was about 20%, and this figure increased to about 36% from April 1397 to the end of August this year. In other words, although high inflation has always been a problem of Iran’s economy, this problem has intensified over the past four years.

At the same time, economic policy makers have not only been unable to solve the problem of inflation over the past few decades, and it can be said that the solution to controlling inflation is one of the most specific problems of economics, and it is nothing but controlling the growth of liquidity in accordance with the macroeconomic environment and the growth of the gross domestic product; In other words, if in an economy, liquidity growth is disproportionate to economic growth, the definite result will be inflation.

But in Iran, due to several reasons, the growth of liquidity has never been controlled; Perhaps one of the most fundamental reasons for this issue can be found in the political approach of governments. Governments usually compensate for their political inefficiency by printing money. In fact, money printing and liquidity growth are the price of wrong economic policies. In the meantime, other factors such as the imbalance of the banking system have added to the dimensions of the liquidity growth crisis in the country.

But instead of choosing the right way to control inflation, governments choose the easy way, which is mandated pricing. In other words, they do not allow the producer to raise the price of his product in proportion to the increase in production costs caused by inflation. Governments, which are the main cause of inflation, come in as a savior to support households with mandated pricing policy and approved pricing. Although the policy carries the beautiful name of consumer protection, it is actually the policy of destroying production and consumers.

Suppose you are a manufacturer and you are allowed to sell your product at a price that does not even cover the cost of your production; What will you do in this situation? The answer is clear: either you stop your production, or if you have to continue production, you try to continue production with the minimum possible capacity to reduce your losses. This means a decrease in supply and investment, and as a result, inflation increases.

Now suppose that this issue in the industry car be; An industry that, in addition to these problems, has an inefficient structure with low productivity. A structure that is again the result of the wrong policies of the past few decades. A look at the financial statements of car manufacturers shows that almost two of the largest car manufacturers in the country sell car products for less than the cost of production. So, it is not surprising to see a decrease in the circulation of production and the accumulation of losses of several tens of billions.

In this situation, the economic policymaker chose the easy way, and that was to determine the approved price. In a situation where, on the one hand, the difference between the free market price and the approved price reached several tens of millions, and the production was reduced, and on the other hand, millions of people were trying to buy cars to earn a sweet profit without any trouble, yet again the policy maker instead of correcting His flawed process surprised everyone with a strange policy; Car lottery.

June 1399, Car lottery It started and millions of people competed to buy a limited number of cars at an approved price. The lucky ones whose names came out of the lottery would win several million rents. A policy that continued until May this year.

In order to understand the dimensions of this car lottery, the statistics of the last stage Iran Khodro lottery Let’s review together. The thirty-eighth stage Immediate sale of Iran Khodro Meanwhile, it was held in May 1401 with the release of 20,000 cars, and more than 6 million people participated in this stage.

After that, the lottery was canceled by car manufacturers. But this ban did not mean to correct the flawed process of mandatory pricing policy, and the Ministry of Privacy followed the same sweet belief of the past few years.

In fact, the Ministry of Security considered the problem in the way the lottery was held, and not in the mandatory pricing policy. In this situation, the officials of the Ministry of Security believed that if a new system is implemented, firstly, all car manufacturers will offer their products at the same time, and secondly, if transparency is high, the problems of car lottery will be solved.

It was based on the idea that Integrated car allocation system It started operating at the end of June this year. In the first stage, all car manufacturers of the country (private and government) offered 177 thousand cars and about 4 million and 175 thousand people registered to buy them. It was here that the officials of the Ministry of Security considered the reduction of the number of applicants to buy all cars to 4 million as their victory and said that the problem was with the system.

But the statistics of the third stage Integrated system, it was a testimony of the policy makers’ usual wrong belief; In the third stage, which was held on the fourth week of September, more than 6,680,000 people registered to buy 60,000 cars. The interesting point is that more than 97% of people applied for Iran Khodro products. The products that firstly have the biggest difference between the approved price and the market, and secondly, they are still subject to lottery, and by the way, their production is associated with the biggest loss.

Now, you should ask the officials of the Ministry of Privacy again, did you see that the problem was not with the systems? Iran’s economy has not seen many of these systems. systems that all had a single fate; Break.

Of course, it is emphasized again that the problem of the automobile industry is far beyond these topics; Extensive rent, monopoly, import ban, several tens of percent tariffs under the pretext of supporting domestic production, low productivity, inefficient management structure, etc. But whatever the problem is, the solution is not prescriptive systems and pricing.