Korean home appliance companies should be punished for non-compliance / Support for home appliances does not lead to monopoly

According to the economic correspondent of Fars News Agency, supporting the home appliance industry has become one of the hot topics in the country’s economic environment these days. Many experts see this support as a condition that the government and producers must meet.

Reza Tanhaei Moghaddam, an expert on Iran’s economic issues, believes in the need to support the home appliance industry: The problem in the home appliance industry is that there is domestic competition. There is no such thing as a car monopoly in this industry. It is also wrong to compare home appliances with cars. The problem with the car is that it is state-owned before it is monopolized. If we have 100 carmakers and run like these current carmakers, these are the same problems. So the car must first solve the problem of government management, then go to the monopoly. We do not have this problem with home appliances. Monopoly in that sense is not monopoly. Nor is it governmental. It is private. The following is Fars’s interview with Reza Tanhayi Moghaddam:

Fars: As the first question, what is your opinion about the ban on the import of Korean home appliances?

Alone front: In discussing the protection of industries, two issues must be considered. One is the ban on the import of home appliances. One is the ban on butter. I think that regardless of the ban from Korea, the demand of the home appliance industry is to have an import ban altogether; Whether it is Korea, Germany, Japan or any other country. In the case of Korea, this logic is clear. In 1997, when the country was under the influence of illegal US sanctions, the Koreans abandoned us and left. The country was challenged at that time. In any case, they must be punished for violating their obligations. I am talking about these two Korean companies in particular. LG and Samsung. Because the situation in our country is such that there are these risks of sanctions anyway. Every company learns whenever it wants to come and go, and in these circumstances, no stone is left unturned. This non-import of the final product from these two companies is fully justified and should be prohibited.

* Support for domestic appliances does not cause a monopoly

Fars: So the import of Korean home appliances should have been banned? Or was there another solution to this issue?

Alone front: We could work with these two companies on different terms, and we could work with other manufacturers of home appliance products from other countries as well. But working does not mean opening the customs so that they can import the final product. Even if we were not sanctioned and in this sense our domestic production was not in such a condition that it had a good growth in these three years and now that it wants to flourish, to create a competitor for them, importing final products from other countries does not make sense and should not be closed. Let’s open. First, many have learned and think that monopoly is always bad and that competition promotes growth. These are general propositions. I think many have learned general propositions and make general statements in this regard without examining the experiences of countries in the field of economics and studying the knowledge of economics. Who says home appliances are monopolized in the country? ‌ When they say monopoly, minds go to the car and then attach it to home appliances. First of all, we have at least about 500 companies, of which about 200 and a few of them are noteworthy; That is, they are big. So there is competition here.

* Automotive is fundamentally different from home appliances

Fars: Why is the home appliance industry compared to the automotive industry?

Alone front: The problem in the home appliance industry is domestic competition. There is no such thing as a car monopoly in this industry. Secondly, comparing home appliances with cars is wrong. The problem with the car is that it is state-owned before it is monopolized. If we have 100 carmakers and run like these current carmakers, these are the same problems. So the car must first solve the problem of government management, then go to the monopoly. We do not have this problem with home appliances. Monopoly in that sense is not monopoly. Nor is it governmental. It is private. But if we close the borders, technology will not enter the country. The problem with our appliances is the technology. However, in these three years, the manufacturing companies have made good progress in terms of technology. How did we introduce this technology? Instead of importing the final product, we have to import technology from other countries where technology is probably advanced. That is, they can operate in the country, provided that technology enters and connects to our companies. In other words, we bet that our product must be exported. Do not enter the market inside the market. We can do it now. Because the home appliance class says give us three or four years to form our puberty. They say they have grown well in these three years and we should give them three or four years to reach maturity and then open the borders until the final product comes. We say this is not logical and true. Right now we can invite foreign companies and join our companies, provided that they have to produce together. Start the production line and do not just assemble. Then this product should be exported and not enter the domestic market, so that the market concerns of domestic companies can be solved. In this case, technology has entered the country and domestic companies are progressing and do not stand still. This is how the concern of becoming competitive, as many say, occurs. It is no longer just domestic competition. That means we have to compete with foreign countries as well. Let our domestic companies compete abroad. If they are going to compete with non-Korean companies, this competition must be done abroad. They also produce domestically. For example, Daewoo should produce with our SNOWA and find a market for themselves in the markets of Iraq and Afghanistan and compete with other products in the world.

* Competition advances technology

Fars: With this method of competition, can we hope that the country will grow in the home appliance industry?

Alone front: This competition causes growth in technology to reach the world level and be updated, and we can allow the final product to enter the country. We can do the same for other industries. To fine LG and Samsung, there is no problem for them to come, but they do not have the right to import the final product and they only have to bring parts and technology. I want them to be punished, to join our companies and bring technology, provided that the products that are produced are exported. In this way, it brings to the country and technology enters the country and we have exports and currency enters the country.

Fars: For this development model, can we name the countries that have used this method?

Alone front: Many countries have done this. China has done it. Many developed countries have used this model. He used in his time the general propositions that growth and development are in competition or that monopoly is bad. But who says our home appliances are monopolized? On the other hand, closing the doors and considering an 80 million market for our home appliances is also bad. Whether technology is imported or not, the government must manage the subsidies and subsidies it gives to domestic companies. This is rent support when these companies can not adapt to the latest technology in the world. In the name of imposing tariffs on foreign products or banning the import of foreign products, these companies must do something in return for the government’s service to the domestic company, which supports the country’s policies. The government subsidizes and he must give rain to the country. For example, if the government says that two years later, I will reduce the tariff so much or release the import with this tariff, provided that 20% of your product is exported two years later. This has requirements that the government must meet. If he wants to export, first of all, what are his problems in the field of export, and the government must provide him with some problems. I looked at the issue at the micro level. I just looked at this home appliance industry.

* With the change of conditions in the country, producers will suffer

Fars: These conversations were on a micro level. What should be done at the macro level?

Alone front: At the macro level, these are not our problems at all in the country. All those who say that it should be imported, that is, from other companies, and those that say that it should not be imported, both argue that the quality should increase or that the industry should be established. One says that if it is not imported, this industry is a baby and it will start and after 4 years it can compete. One says that if there is no competition, a monopoly is created and this causes rents to rise and not grow. Both have a purpose; But I want to say that regardless of this view, our country’s economy is firstly unstable and secondly rent-seeking, and this instability causes us not to grow at all, regardless of this particular industry. No industry in the country can grow seriously in the country with these conditions. For example, suppose we tell home appliance manufacturers that we will not allow imports for four years, and after four years we will open the country’s doors. You have to reach this level in these four years. They also say we are coming and this should be one of the demands of home appliance companies. We came and now the dollar is 28 thousand tomans. Two years later, something happened and the dollar became 50,000 tomans. The company is miserable again. Its costs increase. It says here that you gave me 4 years in a stable situation, now this is how things went. It is because of the policies of the government and now these conditions have changed and they must be supported again.

Fars: How should we manage the issue of changing conditions that arise?

Alone front: The conditions of governing the country may change due to the change of governments, or suppose the sanctions are intensified at once due to the policy of the country. Suppose there is a negotiation and two or three months later the United States returns to the UN Security Council and there is a relative opening and the home appliances come up with a two or three year agreement strategy and suddenly a year later we are sanctioned. Suppose we are boycotted again on other issues. What to do then? These are, after all, the policies of the system. True or false, which in my opinion is true that the country does not want to pay a ransom. But it has consequences. If, due to the system’s policies, the producers incur costs, the system must come to the aid of SNOWA and provide subsidies. In foreign relations and foreign trade, we usually do not subsidize our companies, we even stop them and bring them down. Suppose a company commits itself to a strategic commodity in the food industry, and one year, two years, three years, it sets foot in the Iraqi market and builds a market, and suddenly in the country, due to wrong government policies and the existence of rents and hoarding. Many other issues, the price will go up and we will issue a directive that exports will be banned from tomorrow. The markets of other countries do not wait for us to export goods to them whenever we want. Competitors take over that market and you can not export at all. At the micro level, it is said that home appliances are not competitive. At the macro level of the economy, regardless of price and quality, your policy does not allow you to compete abroad. For this issue, we must also think. Unless we fix this and fix foreign relations, these protectionist policies will not get the job done. I do not mean to build foreign relations without sanctions. In the current situation and the period of 1998-1400, which is the peak of sanctions and maximum pressure, we could facilitate exports and not give a directive every day on what to do with the currency and the government does not oppose exports so that they can market and export for themselves. . The government must do this. You see, less than a month ago, the speaker of the parliament went to Syria. How many private companies were with him? Or 6-7 months ago, there was an exhibition of commercial products in Syria, as our backyard should be. . This means that other people from other countries will participate in this exhibition and take over our market. If the government does not help the private sector abroad, this competition, as they say, will practically never take shape and grow.

End of message / b

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