THE
Introduction and Policy Recommendations
To learn more about MIEPA, click here
Several foreign born students living in California have completed a study of their home country governments' economic policies as compared to the MIEPA list of policies as outlined above. The study on Iran is shown below. The ratings herein are based on the following rating scale:
RATING SCALE
5.0 Perfect Facilitation of Wealth Creation
4.0 Midway between Perfect and Neutral
3.0 Neutral Effect on Wealth Creation
2.0 Midway between Neutral and Obstructionist
1.0 Perfectly Obstructionist to Wealth Creation
[Rating scale copyright Mike P. McKeever, 1996. Used herein with permission]
To read a disclaimer about the analysis in this file, scroll to the bottom of the file.
IRAN:
Comparison of Iran's economic policies to MIEPA criteria as prepared by native student of Iran, Mr. Hassan Kachal, studying in Berkeley in Spring, 2001.
RATING SUMMARY POLICY NUMBER RAW SCORE ADJUSTED SCORE POSSIBLE PERCENTAGE 1 1.0 3.0 15.0 20 % 2 0.0 0.0 15.0 00 3 1.4 4.2 15.0 28 4 2.6 7.8 15.0 52 5 4.8 14.0 15.0 96 6 4.1 12.3 15.0 82 7 3.3 9.9 15.0 66 8 1.0 3.0 15.0 20 9 1.5 4.5 15.0 30 10 1.5 4.5 15.0 30 11 3.0 9.0 15.0 60 12 2.8 8.4 15.0 56 13 3.2 6.4 10.0 64 14 0.3 0.6 10.0 06 15 0.9 1.8 10.0 18 16 0.8 1.6 10.0 16 17 1.1 2.2 10.0 22 18 1.0 2.0 10.0 20 19 1.0 2.0 10.0 20 20 1.6 3.2 10.0 32 21 4.2 8.4 10.0 84 22 2.2 4.4 10.0 44 23 2.8 5.6 10.0 56 24 2.4 4.8 10.0 48 25 1.2 2.4 10.0 24 26 3.0 6.0 10.0 60 27 2.0 4.0 10.0 40 28 3.0 6.0 10.0 60 29 2.0 4.0 10.0 40 30 1.0 1.0 5.0 20 31 3.0 3.0 5.0 60 32 1.0 1.0 5.0 20 33 2.0 2.0 5.0 40 34 4.0 4.0 5.0 80 TOTAL 70.7 157.0 375.0 41.9% ==== ===== ===== ====Return to MIEPA's Home Page
INDIVIDUAL POLICIES
1. Freedom From Internal Control: 1.0
Where you go in Iran you are never far from the clutches of the clergy. The government has made it its duty to interfere in every activity you engage in. The government has made it its affair to break up and dismantle intellectual gatherings, meetings, conferences, and physically punishing, and heavily fining the sponsors, regardless whether these meeting are official or private. Intellectual property falls in the domain of governmental control and the less it develops, the better off the government is. There are no set rules and codes of conduct to hold someone responsible for a certain action or, for myself, to have a clear idea as how I should behave. Sad to admit but it is becoming the land of lawlessness. Even among the same rank each has his own version of how laws should be enforced and to what extent and lets not forget the ever-present double standard.
From: Dr. M. V., professor emeritus in economics, (previously) Melli University, Tehran, (uncle). H. A., Business entrepreneur in finance and economics, Tehran, (uncle). These sources here on will be referred to as personal in this study.
2. Freedom of Speech: 0.0
Freedom of speech is non existent in Iran. Even among the government heads you can not find a dialogue of cooperation and unity such as the spiritual leader (SL) and the president, who is one of them. The power hungry SL refuses to relinquish power and renders the president of the country powerless in making any decisions. The new laws that are passed, by the senate and congress, and signed by the president are nullified by one speech from this person. All the little perks that were given to people were wiped out by the actions of SL. The vigilantes who enforce SL's orders are never caught and non are ever identified. In the course of last year thirty-some-odd newspaper and various publications have been shut down for voicing an opinion and criticizing the government on issues. Its editors and officers as well as some patrons have been jailed without due process at undisclosed locations with no access to attorneys or their families since their arrest. This is freedom of speech in Iran.
From: various publications, CNN, MSNBC, NetIran.com (Viewed daily), The 37th session of un congress on women's position. Vienna, march 18, irna - '93 Iran calls for an equal society for women (Viewed 4 29 2001)
3. Effective, Fair Police Force: 1.4
The word 'police' in Iran has lost its meaning. That uniform which used to stand as a symbol of pride and authority has lost its glitter. Amid the power struggle following the revolution, and other armed groups taking control of the city, uniformed police lost its edge in combating crime and keeping order. Its internal corruption due to lack of education did not help either. At the present time police has taken a back seat to armed militia groups controlled by the office of supreme leader.
From: various publications, CNN, MSNBC, NetIran.com (Viewed daily)
4. Currency: 2.6
The official currency of Iran is Rial. All official transactions (business, governmental, private), and every day interactions are conducted with this unit, although in different rates. And as always it is compared and rated against U.S. dollar. As of January 2000, all government transactions including import and export were conducted with: 1 U.S. dollar = 1,754.90 Rial. On the private side the U.S. dollar is traded on the black market, streets, for 1 U.S. dollar = 8,000 Rial or hovering somewhere near that.
(http://www.odci.gov/cia/publications/factbook/geos/ir.html) CIA world fact book (Viewed 4 12 2001)
5. Commercial Banks: 4.8
Commercial banks in Iran are all regulated and operate under the government controlled centralized bank similar to Federal Reserve in U.S. High inflation prevents people to have a sizable saving. To encourage savings banks provide high interest and though anyone can obtain a loan, provided you jump thru numerous qualifying loops, the interest rates are quite high and given the state of the economy, there is no guarantee the loan will be paid back. Banks lend for large scale residential as well as commercial projects but collateral is always the subject of debate.
(http://www.netiran.com/search/banks), Jameah (Morning & Afternoon Daily), May 9, 1998, Getting Out of Economic Crisis Needs Courage; We Do Not Have Much Time
6. Communication Systems: 4.1
In recent year through foreign contracts, Iran has improved wired communication and wireless communication in Iran. Unlike U.S. where you borrow the line from the service provider, in Iran you have to purchase the line. Though the country is advancing in methods of communication, there are pockets of areas without adequate means of communication. Numerous local radio stations are available, mainly on the AM dial, and 28 television station serves the country. The radio and television stations are government controlled and heavily censored. So the use of satellites are becoming widely popular. Numerous stations from all around the world could be received by these satellites therefore it is illegal to possess one. There is one internet service provider, though heavily censored, provides a link to the outside web.
(http://www.netiran.com/communication), various periodicals, Abrare Eqtesadi (Morning Daily), Sunday Nov. 13, 1999, No. 420, Tehran Tower, Fourth Tallest Tower in the World By: Pouyan Hashemi (Viewed 4 12 2001)
7. Transportation: 3.3
Iran is equipped with air, land and sea transportation. 2 airlines, Aaseman and Homa, serve the interior needs of the country and the elder provides international flights. They are equipped with rotary and fixed wing aircraft. Though the aircraft fleet is aging they fly continuously among the interior airports. Railroad transport has deteriorated and is making comeback in recent years. The majority of the cities and villages are accessible by roads, paved and unpaved. The road transport has been maintained through the years and is still growing. Iran is equipped with sea transport and has number of seaports in the southern and recently northern Iran. Some ports are located on interior waterways and are accessible through the southern border. The country is also in possession of number of seagoing vessels to transport goods from different ports to international destinations.
(http://www.odci.gov/cia/publications/factbook/geos/ir.html) CIA world fact book (Viewed 4 4 2001)
8. Education: 1.0
"The principle of education … being free of charge for all citizens at all levels, as stipulated in Article 3 of the Constitution of the Islamic Republic of Iran, …. as mentioned and stressed on in Article Two of the constitution, …" Education is free for all Iranian citizens from 1st through higher education levels in universities. For higher education there are public universities, which are free of charge, and private universities available. To be able to attend either universities you have to participate in one or both annual entrance exams administered at the same time and date all over the country. The score decides which university and what major you can participate in based on a pre-selected list of universities and majors each student has provided. Sounds simple, right? Wrong. The exam itself is not easy. But if you score high on religion studies and low on physics and your score is the same as someone with high physics score and low religion, the student with high religion score will be admitted first before the second student. And there is always double standard. Public universities are more in demand than the private ones. The private university exams are easier than the public ones. So more students are admitted in private universities.
Even though the education is free there is a persistent dropout rate among the students in all levels. The colossal rise of the cost of living, which, unfortunately, has not been accompanied by the rise of income is one of the strongest factors associated with this fact. The students are forced to drop out to help the family economically. Though the education is free, there are expenses associated to it such as housing, food, and transportation. Girls are the first in this group, not to help economically as to generating income, but to take a back seat to the boys in the family. This is not to help the family economically, as generating income, but as not exhaust the family resources. Falling allocation of the per capita budget for education, the question arises as to whether or not one can still talk about the free education.
(http://www.netiran.com/education) Goftegoo [Dialogue]; (Quarterly), Cultural & Social Magazine, Spring 1998, No 19, Pages: 67-75. Free Educational Expenses In Iran. By: Bijan Khajehpour Khoie. (Viewed 4 2 2001)
9. Social Mobility: 1.5
Since the revolution of '79, strict social reforms has been in effect which severely intervenes with the productivity of the masses. Women are virtually sidelined by the new regulations imposed which stems from the separation of males and females in every regard. For those who have managed to keep a position in the industry, being labeled and discredited and being barred from interaction with males undermines their productivity. Today, women number more than men in Iran, therefore the productivity of that part of society is non-existent. For the male population, those competent and capable are in short supply. The remainder are just getting by.
Personal
10. Freedom From Outside Control: 1.5
For the past century, Iran's governments have been 'installed' by foreign governments and despite the face value of the foreign affairs, an alternative motives are involved. In review of Iran's history for the past century, Pahlavi regime was brought to power by the British and U.S. governments for the sole purpose of the oil exploration and its profits. When Reza Shah, king of Iran at the time, got in the way of foreign governments taking advantage of Iran, he was removed from power and his son, Mohamad Reza, was installed in his place. He almost lost power, twice, and was restored by the U.S. to rule for a while longer. One of these occasions was to the prime minister of the time, Mosadegh, which in 1999 Madelane Albright stopped short of apologizing for intervening in removing Mosadegh from power. In 1979 he was removed from power and the present regime was installed and in addition to previous mentioned governments, now France is in the game also. Despite the face value of Iran and U.S. not having diplomatic relationship, that did not stop the Reagan admin. to sell arms to Iran to prolong the war so that oil and gas could now be taken for free. Casper Weinberger, Sec. of state, was pardoned. His testimony would have definitely implicated Reagan and the administration. Now we have to wait for another 20 years for the documents to become declassified. Freedom would have been nice.
New York Times:(http://www.cryptome.org/iran-cia/cia-iran-pdf.htm) (Rechecked 4 29 2001)
11. Foreign Currency Transactions: 3.0
Iran's official currency is called Rial. Rial has steadily lost its value in the international markets since the revolution. Compared with dollar pre revolution prices were $1 to 70 Rial. In today's market $1 is equal to 8,000+ Rial!!!!!!!! The government rate for trade is different. In the year 2000 commercial exchange rate was $1 to 1,760 Rials. This official rate is used for imports of essential goods and services and oil exports. For non essential goods and services and non oil related exchanges the rate is $1 to 3,000 Rials. All foreign currencies are converted to Rial before any transactions can take place. Foreign currencies saved in banks are converted to Rial and at the time of withdraw it can be converted to the foreign currency of choice with the current exchange rate. Since this is act a sure loss of capital, there is very little foreign capital kept in the banks.
(http://www.netiran.com/currency) Abrar, (Morning Daily), President of Iran's Association of Economists Saturday June 17, 1995, Stabilization of the Foreign Currency Rate and Its Impacts, By: Dr. Manuchehr Farhang, (Viewed 3 29 2001) Payam-e Emruz; Economic, Social, Cultural (Monthly), February 2001, No. 23, Iranian Economy in Six Snapshots, By: Ali Farahbakhsh
12. Border Control: 2.8
Iran is surrounded by six other countries not to mention those we share the bodies of water with. The countries directly on our border are Azerbaijan, Tajikistan, Afghanistan, Pakistan, Iraq, and Turkey. There are official border crossings on all these borders but people such as nomadic tribes freely cross these borders from one country to the next. However, recently political dialogue with neighboring countries has resulted in increased border patrol and law enforcement.
(http://www.netiran.com/borders) Aril 26, irna, Ahvaz (Khuzestan), Iran enjoys excellent state of security says information minister, (Viewed 3 28 2001)
13. Cultural, Language Homogeneity: 3.2
Iran, Persia as it was called in ancient times, is home to some of the worlds oldest cultures and traditions. The official language of Iran is Farsi and is taught and practiced in all schools from the first grade on. The country has, or had by now, the worlds most diverse ethnic and religious culture ever assembled in one country. The major ethnicities are Presian, Azari, Gilaki and Mazandarani, Kurd, arab, Lur, Baluch, and Turkaman in that order. There are many derivatives of these groups each with their own twist on the dialect. All these people, used to, worship their brand of religion. The population of these ethnic groups in descending order are sheii muslim, sunni muslim, Zorastrian, Jewish, Christian and Bahaii. Practicing any religion is no longer permitted in Iran. During the last regime, religious freedom prevented any religious clashes among people. This practice would have continued had the present government not created the present hostile religious atmosphere. Population: Since the war, the number of females in the population has surpassed that of males. Since the beginning of the revolution, literacy rate has dropped.
Personal
14 Political Effectiveness: 0.3
The governing political bodies of Iran are in a tug of war. Power hungry, greedy, shortsighted, selfish, dishonest (well all politicians are), thieves are only a few of their 'qualities.' At the present time, the legislative body of the government can not pass new laws and regulations because ultimately the religious figures, who refuse to see the need for change, over rule both the senate and the parliament. Granting people improved living conditions is what the law makers are appointed for however, keeping people in the dark and silenced is the religious way for, when people find out what other personal choices exists out there, they would not want the present government anymore. Although he is one of them, the president of the government is so powerless he is constantly fighting his own religious bodies on issues that are mostly social related. Personal freedom has become a hot issue recently and strict religious factions are strictly against it. Diplomacy should be the guiding light of any government. For this political religion, fear and shortsightedness prevents diplomacy and common sense. In politics common sense goes a long way. But it is amazing, how many people suffer by not having any.
Various daily news magazines: msnbc, cnn, netiran. (http://www.iranian.com/today.html) Pro-reform Party Campaign office Attacked and Burned (Viewed 5 29 2001)
15. Institutional Stability: 0.9
Almost all large institutions are government run. And the government run equates political upheavals rather than stability. Political instability leads to total breakdown of governmental authority which results in weakness of institutional agencies. Instability causes different institutions to adopt self rule which will result in loss of credibility. If you can not hold an agency to certain guidelines and rules and would have to bend to their change or double standards you will soon loose support of followers and would fall into disarray.
Persona
16. Honest Government: 0.8
The ruling party of Iran is the fanatic radical religious group. Their thirst for power and financial well being has developed into a rather large self complex for them. Since their installation during the revolution, they have drained the country financially and politically. The have benefited themselves financial and has learned of methods to dispose of those standing in their way. Since the leaders resort to such acts, the local government and agencies are following suite. Trust among people has diminished and loyalty has virtually non-existence. Not being able to keep one's word, or deliberately acting mischievous to worsen the situation has taken its toll on people.
Personal
17. Common Laws: 1.1
Wherever there are laws, there are people who want to disobey them. Iran is no exception. There are certain laws that the government strictly enforces, such as people's appearances, religious obligations. Then there are laws to be enforced by local authorities which can be easily influenced by 'gifts' , as locals put it, and it is widely used for business as well as governmental agencies. Masses closer to the religious organizations and governmental agencies naturally get better treatment and perks. Same law is interpreted different from one branch of the same institution to the next. Good luck to us all.
Personal
18. Central Bank: 1.0
All major financial institutions are directly influenced by the government, which controls the economic flow. Because of high inflation, the interest rates are high and likely to remain there for some time. Also, because of high inflation the rate of saving is low. Most of the incomes are spent on daily living expenses. So the banks can't lend out the money as freely. This slows the flow of economy.
Personal
19. Domestic Budget Management: 1.0
Due to budget mismanagement in the nineties, Iran is still recovering from financial difficulties. In the early 90's the net import was much larger than net export which lasted till 1992. As a result the short-term debt increased. With no income from exports to be injected into the economy, the country had balance the budget with the existing circulation of funds. At the same time, devaluation of the currency in the world market and constant rise in cost of living was directly passed on to the population. In '96 the economy hit rock bottom. Some progress has been made since then but the cost of living has not stabilized yet.
(http://www.iranian.com/iran-info/economy/index.html2000) (Viewed 3 18 2001)
20. Government Debt: 1.6
Iran still suffers from the results of the long war the Iraq. Aside from the physical damages, the country is still paying for the economic set backs of the war. The economy has not recovered to the status of adequacy because of lack of import and export of goods and commodities resulting from the embargo imposed. Lack of foreign investment reduces government and private sector income. In 1995 Iran was the recipient of $116.5 billion in foreign aid. In 1996 the foreign debt was $21.9 billion. In the 1996-97 period the revenues were $34.6 billion and the expenditures were $34.9 billion.
(http://www.odci.gov/cia/publications/fedbook/geos/ir.html2000) CIA world fact book, (Viewed 3 18 2001)
21. Private Property: 4.2
According to my businessman uncle, there are no restrictions on owning any property. At the beginning of the revolution, private industries and businesses were confiscated and released later to the previous owners. There are no restrictions on the quantity of properties owned by one person. If the property is a commercial real estate the government may interject and dictate some restrictions on doing business in that location. As far as residential properties are concerned, an old, or not so old, large property could be demolished and be replaced with multi-unit high-rise complex. The fee from these recent projects are the reason the cities have grown and improved in the last few years. The downside to this is the destruction of the old and traditional fabric of towns replaced with tall out of place buildings. Today, government's approach to private property is how it can squeeze the owner for fees, fines to generate income for the city. If the property is in dispute or in any uncertain circumstance, the city will either declare it public domain or will refer it to the courts.
Personal
22. Economic Statistics: 2.2
The economic status of Iran is compiles by the Plan & Budget Organization. Unfortunately the head of this organization has an executive job and also draws up the budget of the country. The result is an inaccurate measure of economic status of the country. According to this report per capita income of Iran is $700. By their calculation, the official statistics released by the United Nations and the World Bank, the per capita income of Afghanistan is 1,200 dollars and that of Bangladesh 1,800 dollars. How is it that per capita income in Iran is 700 dollars.
Our main problem is that the Plan and Budget Organization is unable to calculate per capita income in our country. The reason for this is that the country's oil revenues were supposed to be put at the disposal of this organization so as to establish the country's economic infrastructures. This is because whenever the government plans to establish the country's industrial infrastructures, the private sector shows eagerness to make investments. But if the government wants to set up industries with petro-dollars this will cause disputes in the process of privatization because various factions will try to take possession of the economic rent. So, the head of the Plan and Budget Organization should not have an executive job and draw up the budget of the country. Rather, a person with very high scientific standing should be at the helm of the organization, capable of attracting all his forces around himself so that the organization can make the planning and offer it to the government. In that case, the cabinet minister can do whatever it should and if it fails to implement part of the planning, it will know where its social and economic expenses are.
(http://www.netiran.com/economic-statistics) Tadbir; Scientific & Educational Magazine (Monthly) Oct. 1998, No. 87, Prospects of Iranian Macro Economic Variables in International Relations, By: Dr. Rahim Rahimzadeh Oskoie, (Viewed 3 18 2001)
23. Protection of Public Health: 2.8 Mimicking other more advanced countries, Iran is moving toward a centralized and regulated insurance and public health organization. Obstacles in achieving its goal consists of:
1- lack of professionals, only in quantity not quality,
2- up to date instrumentation consequently,
3- high cost of treatment.
Although well trained physicians are available in Iran their quantity is limited and those available are usually in urban areas. Medical facilities are utilizing outdated instruments. The funds are available for these equipment however, the embargo imposed prevents other countries to sell equipment to Iran. The limited equipment available and the volume of patients to be treated drives up the cost of medical expense. This fact prevents some to seek medical treatment. In March of 2001 sale of medical equipment to Iran has been restored and a number of shipments have been made to Iran.
(http://www.netiran.com/health) Various articles. ( Viewed 3 14 2001) (http://www.iranian.com) various articles ( Viewed 4 11 2001) Good old uncle.
24. High Wage Policies: 2.4
Newly installed constitution (1987) is geared toward the employee protection and benefits. There are no watchdog group or organization to look out for these employee rights. Although firing employees are respected by this act the living wage salaries and benefits are solely dependent on the mercy of the employer. Per capita indicators in Iran show that compared to 1976 or 20 years ago the people in Iran have become poorer by about 25 percent by 1996. In 1999, an urban family's net annual expenditure amounted to over 20,702,000 Rials (one U.S. dollar was equal to 8,000 Rials in November 2000), which in comparison with the 1998 figure, it indicated an increase of 24.2%. Of this amount 6,183,000 Rials (29.9%) was spent on foodstuffs and 14,519,000 Rials (70.1%) on non-foodstuff items, showing increases of 19.5% and 76.3% respectively comparing with the preceding year. The highest expenditure on foodstuff and non-foodstuff categories were on meats which accounted for 24%, and housing which accounted for 46% of each of the categories total expenditure, respectively.
(http://www.netiran.com/highwage) Sobhe Emrooz (Morning Daily), Nov. 20, 1999, No. 268, Per Capita Income Drops But Consumption Goes Up, By: Ahmad Reza Roshan (http://www.netiran.com/highwage) Ettela`at (Afternoon Daily), Nov 29, 2000, No. 22072, Summary of Findings of A Statistical Project on Iranian Families' Income and Expenditure (http://www.netiran.com/highwage) Iran-e Farda, September 97, No. 36, Vol. 6, Performance of Macro Economic Indexes in Iran, By: Morteza Alviri. (All three viewed 3 10 2001)
25. Environmental Protection: 1.2
Although the government is an active participant in different environmental protection measures such as air pollution, emissions for Ozone control, green policies and aquatics, there are no enforcing body overseeing their progress or lack there of. The Caspian sea also lies over considerable crude and gas reserves. As of March 9 2001, exploration activities are underway without any specific plan or coordination among the littoral states. For example, the Caspian Sea retains some 400 living species, including seven genus of caviar producing sturgeon. Caviar production provides a lucrative industry for all five littoral states. Animal life, such as birds and other species are also threatened due to the increasing pollution in the Caspian Sea. The forest of the Alborz mountain starting from the edge of the Caspian Sea southward has lost %30 of its vegetation. Iran is mostly arid or semi arid environment.
Water is a precious commodity. Miss-management of the water by boring too many ganats (aqueducts) has led to drought. One central measure cannot be executed in all areas. They must be attuned to different climatic situation, as in most cases, these have not taken into account regional and local conditions. Iran is home to some endangered wildlife some of which number in teens. Number of unique plants are also on the endangered list. The culture of the society plays a very important role in addressing environmental concerns. If public inclination toward protecting the environment is strong, many environmental problems will be prevented and/or solved even without enacting state preventive measures through the assistance of the people. A case in point is the non-existence of a commission for environmental protection at the Islamic Consultative Assembly (Majlis) which is in charge of formulating legislation in the country. This shows lack of attention to environmental concerns in the Majlis. In the same manner, non-governmental pro-environment organizations in Iran have been undertaking insignificant and minor activities, up to the present time.
(http://www.netiran.com/environmental) Abangan; (Quarterly) Students of Water Engineering Department of Khajeh Nasireddin Toosi Industrial, Technical University, Winter 1998, No. 13, Protection of Environment, a Forgotten Duty, By: Hamideh Zakhari. (Viewed 3 11 2001) (http://www.netiran.com/environmental) Payam-e Darya [Message of the Sea]; The Islamic Republic Shipping Company Magazine (Monthly), Feb. 1997, No. 64, Destruction of Marine Environment in the Persian Gulf. (Viewed 3 11 2001) Iran (Morning Daily), Wednesday, Feb. 14, 2001, No. 1743, By: Mehri Haqani, The Accelerated Extinction of Wildlife in Iran. (Viewed 3 11 2001)
26. Strong Army: 3.0
Even with good intentions, the Iranian armed forces would defend the country should the occasion rise. With adequate military hardware, non nuclear, and semi self-sufficiency in producing artillery and war machinery they have a chance of survival should there be a need. Iran's military force is divided into the following categories:
Iranian Federal Army, The revolutionary guard and Basidje. Iranian Federal Army is the major defending force against the intruders and it consists of: Ground Troops, Air Force, Navy and the Reserves. The revolutionary guard was created after the revolution to protect the present government and as a protective measure against an army coup. (shows how popular they are.) Their number is about ¼ of the Armed forces.
Basidje: Is a volunteer civilian organization and a dangerous armed civilian groups. It came about during the Iran-Iraq war and since the end of the war has been active in patrolling city streets for non-regulated activities. In rural areas they do conduct literacy programs.
From: (http://www.eia.doe.gov/emeu/cabs/iran.html2000) (Viewed 2 15 2001) M.Khatami visits Russia's Vladimir Putin. NBC News, Associated Press, 2001 (Viewed 3 12 2001)
27. Foreign Trade Impact: 2.0
The country is still experimenting with what should be included in reporting GNP. For the first time in the past eighteen years the country's budget deficit was zero in the last fiscal year ('95). According to another source, the overall export of the country including oil export stood at dlrs. 19.1 billion while the import volume was estimated to be dlrs. 12.7 billion, resulting in a four-year record high of dlrs. 6.4 billion positive trade balance. The gross national product (GNP) stood at 11,000 billion rials in 1976. The figure rose to 14,000 billion rials in 1996, showing an increase of 2,500 billion rials. This encompasses 45.7% of the GDP (GNP). If we take the median of these reports, the country has at least moved above 0 to a budget surplus.
(http://www.netiran.com/import-export) Tehran Times, 10/29/95, Iran's Budget (http://www.netiran.com/import-export) irna, tehran, sep. 24, Iran-GNP-central bank iran's gdp grew by 5.2 pc last year (Viewed 5 13 2001) (http://www.eia.doe.gov/emeu/cabs/iran.html2000) (Viewed 2 15 2001)
28. Protection of Foreign Currency Earning Enterprises: 3.0
The oil industry in Iran is the most active sector of economy in export and is controlled by the government. In 1999, to stabilize the economy, a privatization plan was proposed to reduce the role of the government in several major industries including gas and oil. Along with the privatization a variety of measures were introduced to attract foreign investment. Easing the restrictions, lowering tariffs and duties on imports and creating regional trade zones were among these measures. Among foreign investors, privatization will produces competition which will provide the best solution for the problem. Attracting foreign investors has proven difficult as the government has fallen short of its expectations.
(http://www.netiran.com/economy-foreign) Payame Darya, Economic-Scientific (Monthly) June 1995, Vol. 4, No. 33, Iran's Standing in Global Trade & Upshots of Membering the GATT, by Mohammad Reza Raf'ati. (Viewed 2 14 2001)
29. Management of Foreign Currency Budget: 2.0
TRADE RATIOS Iran's major exports are gas & oil (%91), carpet, dry fruits, various nuts, hides, various metals. Exports were expected to be $ 16,429m in 1379 (1999) with the share of non-oil exports being $ 4,581m. This year the imports are expected to be $16,281 m. The non-oil exports under the 'Third Plan' are foreseen at $ 34,773 mil. The ratio of imports to the GDP is expected to rise to 12% this year, up 1.1 percentage points from 1378. The ratio of non-oil exports to the GDP in 1379 is foreseen at 3.4%, up 0.3 percentage points from the year before. According to a report by the Customs Administration the value of the non-oil exports in the first quarter of this year [ended June 20] was $ 621 m, down 23.8% from the corresponding period last year. As figures indicate, the country is enjoying a surplus of goods and services. According to another report, in 1995 the total export, including oil and gas, was dlrs. 19.1 billion and the total imports stood at dlrs. 12.7 billion. For the first time in 18 years the government has moved to the positive side of scale to a budget surplus.
(http://www.netiran.com/import-export) Tehran Times, 10/29/95, Iran's Budget (http://www.netiran.com/import-export) irna, tehran, sep. 24, Iran-GNP-central bank iran's gdp grew by 5.2 pc last year From: (http://www.netiran.com/profiles.html), Bahar; Political, Social (Morning Daily), Glance at Economic Indices for 1379, Aug. 8, 2000 By: Yousef Mehnatfar. Tazehay-e Eqtesad [Latest Economic News]; (Monthly),Scientific, Economic, Banking Magazine, Iranian Economy from April 1999 to April 2000, June 2000, No.89.(Viewed 3 11 2001)
30. Layers of Collection Active: 1.0
Almost all appointees to local government agencies are either thru the leadership in the capital or the local religious leaders. There are elections held when the term for one office is over but all candidates must register in advance and a religious committee reviews their qualification. For eligibility you have to be a national Iranian, preach or be vocal in the religion circles and a few other religious requirement. In the last election, the reformers managed to sweep into office. Reformers are those who intended to make changes at the legislative level to provide more relaxed rules and regulations about religion and its practice. Even though they passed legislation into law for few reforms, the clergy, office of supreme leader who refuses to relinquish power, vetoed their efforts.
(http://www.netiran.com/state.html) Leadership, Executive, Legislative, Judiciary, Assembly of experts, National Security Council. (Viewed 2 12 2001)
31. Pro-Business Climate: 3.0
In the Iranian culture of economy, bazar (market), holds a key role in the daily interactions of a city. The people who make up this group of venders are not the most educated (formally) group of people. For the most part, their knowledge of commerce has been handed down to them thru fathers, uncles or alike form the previous generation. At the same time this group of people have enormous influence in political, legislative, and judicial powers governing the city, consequently the country. When this group is united for a common cause their power of persuasion is unmatched by any other factions. Individually, though, the alternative motives of doing business always shroud them in a sense of untruthfulness. Since their profit is their bottom line, wining over a customer to make a sale is the battle of the day.
(http://www.netiran.com/business.html) -Obstacles to private sector activities. By: Dr. Amir Houshang Amini, (Viewed 2 10-11 2001)
32. Government Enterprises: 1.0
Although by passage of a 5 year plan, to privatize some government owned industries, some progress has been made, but still %80 of the industries in Iran are government owned and operated. The move to private sector has been very slow because of the guidelines explained below. Since a set system of tax collection on income is not in place, there is no concrete evidence regarding the net profit, or lack there of, of these industries. But collectively, according to the annual GDP reports, some have produced substantial profits in certain industries and not so in some others.
To understand the philosophy of conducting business in Iran you have to understand how to maneuver around the obstacle course set forth. Present government of Iran imposes three tenets in implementing plans for economic development: 1- The plans must not contravene the constitution. 2- They must not violate Islamic law 3- They must lead to economic growth and prosperity. Despite the 'Economic adjustment act' of '89, to transfer large units of production to private sector entrepreneurs, the government retains control of key sectors such as banking, insurance, finance, air transport, trade and car manufacturing. Private sector if further hindered by number of obstacles: a- Lack of a genuine capital market. b- Lack of proper credit mechanisms. ( i.e. Foreign loans available only to government agencies) c- Most privileges and facilities are geared to state-affiliated bodies that directly compete with the private sector, which is left to fend on its own. d- Different executive organizations issue contradictory or opposing policies and regulations. e- The attitude of taxation agencies toward the private sector discourages production activities and income generation. f- Lack of a powerful executive organ that can implement privatization policies and transfer state holdings to the general public. g- Lack of security from prosecution. h- Red tape and cumbersome bureaucratic procedures for obtaining credit. i- Problematic & double standard regulations in all fields, from labor to production, sales, export, monetary and financial policies, social welfare, and others. j- Unstable regulatory environment, which has left economic units in a state hesitation and with an obscure future. For any investor in the private sector, assurance is of stability is an essence.
Governmental share of the economy is vastly and un-proportionally larger than the private sector. Currently, %80 of the unit based businesses are government owned and despite the fact that some businesses are privatized. If these units of production were productive to aid the economy the government would not have transferred them. It seems that the third article of economic implementation plan has not been implemented and has been overshadowed by the obstacle course.
(http://www.netiran.com/profiles.html) -Obstacles to private sector activities. By: Dr. Amir Houshang Amini (Viewed 2 10 2001)
33. International Security Agreement: 2.0
Since the revolution of '79, Iran has, and has been, isolated from the military point of view. Its depleting fleet of air attack ships are approaching obsolesce. The embargo imposed on Iran prevents the government interaction with other countries in renewing these fleet. This has lead the country to a self production of weapons and artillery needs. This same sanctions has prevented the country to form long term alliances with other neighboring countries. Although there are local alliances with Oman regarding the Hormuz straight end Persian Gulf security. This self-production of military needs has created a stigma of not knowing what the present governments' intentions are. Since military information is always a top secret affair in any country the trickled down information suggests that the government is spending a large sum on the military production. For a business owner investing in this country stability of the government and the military to back it is of utmost importance, therefore not knowing what the military situation is will not encourage me to invest long term.
(http://www.netiran.com/profiles.html) Various articles on military and regional co-operation regarding causes. (Viewed 2 6 2001)
34. Protection of Domestic Enterprises From Government Mandated Cost: 4.0
At the conclusion of the '89 war between Iran and Iraq, a movement of 'Economic Adjustment' took place. This was to transfer large productive units of economy to the entrepreneur of the private sector or restore the confiscated property to its owners, which partially did take place on the confiscated properties. Some business owners, rather than improving the quality of goods and services, crossed the lines and joined the growing number of businesses importing the same foreign goods. This resulted in closure of factories and massive layoffs. The factories that went into production, facing stiff competition form the importers, adopted other measures to be able to sustain a profitable business. Reducing the cost was the ultimate goal. To be able to achieve this, internal costs had to be trimmed to a minimum to turn a profit. Workers were layedoff as redundant; more disciplinary regulations were put in place which enhanced severity. The remaining workers were hired on contracts rather than permanent positions which reduced or eliminated the fringe benefits. These changes exerted more pressure on the workers and let to intensification of exploitation. These conditions lowered the standard and style of living of the workers. The workers were put under direct pressure. One way was to increase the speed of production not by means of modern and efficient machinery, but by tampering with the existing equipment and increasing its speed. With self-imposed regulations, manipulations and increased work hours they further endangered the workers safety and well being. Statistics have shown that these acts in fact did result in accidents. According to a local newspaper, Kar-o Kargar, 3000 fingers were cut off within a period of four months.
(http://www.netiran.com/profiles.html) --Effects of economic adjustment plan on status of Iranian workers. Sponsor: Farhang-e Touse'e, Jun. - July 1998, No.s 34 & 35 By: Maryam Mohseni -New government and economic strategy, Sponsor: Salaam; May 31, 1998, By: Mohsen Shamshiri (Both viewed 2 7 2001)
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