Democratic Republic of Iran جمهوری دموکراتیک ایران

The Only Way Forward

Midsize Enterprises at Peril in Iran

Iranlaborreport – The unrestrained import policy of the Ahmadinejad administration as a means to curb inflation has hit the mid-size enterprises in Iran hard.  Traditional industries, such as textiles, sugar cane refineries, tea, leather manufacturing, shoes, home appliances, etc., which once employed hundreds of thousands of workers, have been closing down one after the other in recent years. Domestic production has been unable to keep up with higher quality, cheap imports.

The textile industry is a case in point. While in the year 2000 textile mills employed 400,000 workers, many mills are currently in a dire situation.  Iran Termeh in Qom is one example. On April 17, Taghi Nassiri, a worker at Iran Termeh and former spokesperson for the High Labor Council at the plant, told Iranian Labour News Agency (ILNA), “One feels pity that a plant once employing 3,000 directly and 20,000 indirectly is on the verge of collapse. Currently, only 200 workers remain, and they have not received wages and benefits for 26 months. If the authorities pay attention to the assets buried in this factory, even today, 1,500 could be working here.”

As reported by ILNA on April 21, about 70 to 90 percent of the needed materials for the textile industry are imported illegally, so adjusting import quotas will have no effect. Unofficial statistics show that last year, 23 billion dollars worth of illegal imports entered the country. Forty to 50 percent of these were textile and ready-to-wear products. The imports have had a crippling effect on the local production of such goods. Price-wise, domestically produced products have no way of competing with cheap products imported from China.

Even though production level in the textile and clothing industries varies dramatically, the situation in the area of blanket production is especially noteworthy, due to the uncontrolled level of imports. Of 83 facilities, only three are currently actively producing goods. In the production of  weaving sector, the situation is worse. Ready-to-wear factories face an even gloomier outlook.Compared to last year, they are operating at 60 percent capacity. In the area of machine-made rug production, the situation is not as drastic.

Currency exchange rate control schemes have benefitted the imports to the detriment of domestic production. With the policy of “targeted social assistance” or the cut in subsidies soon to be implemented, production costs locally should rise drastically and, with the foreign currency exchange rate held constant, local production should fall to even further disadvantage.

In the north, at Rasht Khavar in Gilan province, protest action by textile workers was reported on April 27. Workers who had not been paid for three months prevented management consultants from entering the factory. On April 25 in Qazin, 700 to 800 Farnakh textile workers, seeking seven months back wages and yearly bonuses, protested at the Ministry of Industries. On the morning of April 26 in Qazvin, 540 Mahnakh workers gathered to protest four months of back wages and bonuses. Mahnakh, Sarnakh, and Farnakh textile factories in Qazvin have been hit hard with many layoffs

Filed under: iran election, Iran News, Iranian protests, Iranian workers protest, revolution, ایران iran

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