Reducing oil-dependence by strengthening the private sector and production improvement as a resistance economy strategy

hamdi asadi¹

1) Ms.c of Economic Sciences (corresponding author)

Publication : 1ST International Conference on Researches in Accounting, Economics, Management & Humanities (meaconf.com/1st)
Abstract :
In all societies economic growth and development is an outcome of production. The increase in production both quantitatively and qualitatively means economic growth and improvement of the economic status. Therefore, special and urgent attentions should be paid to production. Increased production and economic growth in every society means creating more opportunities and better economic prosperity and entry into new areas, in turn paves the way to more creativity in the community. One of the main issues for developing oil exporting countries especially Iran s is to fund development projects and their development through oil revenues and most often, in many of these countries the oil sector compared to other sectors, has higher value added in GDP. But a glance on oil-related economic developments in past events indicates that sharp increase in oil revenues, while seen as a natural wealth but at the same time served as an economic disaster. Therefore, in respect to discussions, the research question in this study given decline in oil prices in recent years coupled with sanctions issues that necessitates more production and investment protection in private sector, is whether dependence on oil revenues can be reduced by strengthening the private sector and increased production and reliance on domestic labor under resistance economy? And which approach should be adopted to replace oil revenues to increase production. For this, annual time series data 1972-2014 and error correction factor was used. The model estimation results indicate that there is a negative correlation between the ratio of private investment to total public investment, private investment and the ratio of exports to imports as GDP prerequisites. Taking the signs of variables GDP to GDP ratio also as relying on domestic labor as well as labor productivity, an emphasis on the long-term labor it can be concluded that reliance on the educated work force in terms of sanctions and resistance economy may helped to increase the country s GDP.
Keywords : private investment GDP labor productivity resistance economy