Monetary and Capital Market Exclusive, March 2004

Monetary and Capital Market in Iran

Partnering for Prosperity and Security

If we are truly committed to the principle of “dialogue” in our international relations, domestic communications and personal interactions, then we are bound to accept the main element and principle of any “dialogue”.

Iranian President Mohammad Khatami recently visited the ski resort city of Davos in Switzerland were he attended the 34th World Economic Forum and held talks with his Swiss counterpart, Joseph Deiss, and the Chairman of the Swiss Federal Assembly (Senate) on bilateral and international issues. The President and his entourage, which included Foreign Minister Kamal Kharrazi and other cabinet ministers, held negotiations with their counterparts Foreign Minister Micheline Calmy-Rey, Interior Minister Couchepin and Transport and Energy Minister Moritz Leuenberger. During his stay in Davos, President Khatami also held negotiations with other foreign officials, including British Foreign Minister Jack Straw.

The 34th annual summit of the World Economic Forum was held from 21 to 25 January 2004. The WEF studied the topics of ‘Global Peace’, ‘Partnership for Global Security and Welfare’, and ‘Iraqi reconstruction’. WEF Founder Klaus Schwab said that the Forum is expected to promote partnership of the countries for global peace, security and welfare. Schwab founded the WEF in 1970 to provide a venue for major business leaders and the political leaders to come to terms on global issues.

Global Economic Welfare:  Iranian President Mohammad Khatami delivered a keynote speech in the opening session of the conference where he stressed the need for countries to chart out strategies for a growing and dynamic economy. He went on to outline Iran’s stance on a number of important global economic issues. Some 30 presidents and heads of states, 75 ministers, 28 religious leaders and over 2,000 economic and political experts—including the likes of United Nations Secretary General Kofi Annan and U.S. Vice President Dick Cheney—from over 94 countries were participating in this high-level four-day economic meeting, which was held amid fortress-like security. Moreover, some 1,000 international corporations are WEF members and over 800 CEOs from leading international companies attended this year’s summit.

The modern view towards “Human Knowledge” is trying to establish “dialogue” amongst different domains of science.

The conference focused on a wide range of topics such as the impact of terrorism on the world economy, globalization as well as cultural and religious dialogue. The founder of the WEF, Geneva-born economic professor Klaus Schwab, said the forum’s objective was to exchange ideas on the world’s political and economic future.

The plummeting U.S. dollar was another one of the many topics discussed at the Forum. Themed “Partnering for Prosperity and Security”, the conference studied the cause and consequences of the falling dollar, particularly if it fell by an “additional 20%.” Over 20 economy and trade ministers including Europe’s Central Bank Chief Jean-Claude Trichet, U.S. Commerce Secretary Donald Evans, German Economy Minister Wolfgang Clement and Japan’s Minister of Economy Heizo Takenaka also discussed the matter during private talks on the sidelines of the WEF.

This year’s WEF rotated around seven “key threads” according to Forum organizers, including Ensuring Global Security, Promoting Global Growth, Managing New Risks, Harnessing the Diversity of Values and Reducing Inequity.

Iran-Switzerland: Switzerland has special status in the international community given its unique democracy and neutrality. It has made eye-catching progress and has set a pattern for national co-existence with different ethnic communities. On WEF, Iranian President Khatami said the World Economic Forum is an internationally recognized gathering active in different fields including business and the private sector. He went on to thank his counterpart for inviting him to take part in the summit. He hoped that the visit would serve to develop Tehran-Bern cooperation.  Iran and Switzerland have boosted trade in the recent several years. Swiss exports to Iran have rose to more than 480 million Swiss francs (€306 million, $379 million) in 2002.  The two countries have signed agreements on investment protection and avoidance of double taxation. The Swiss President also declared Switzerland’s full support for Iran’s membership in the World Trade Organization (WTO).

Interdependence of Security and Prosperity: President of the European Parliament, Pat Cox, called on the World Economic Forum to put multilateralism and redefining the role of the United Nations on the top of its agenda. The statement he issued before the conference said that “we must put effective multilateralism firmly at the top of the Davos agenda. We must learn the lessons of last year’s Iraq crisis—that countries ravaged by tyranny and war can only be successfully rebuilt through the United Nations and with the active support of the entire international community. Davos will be a wasted opportunity if we do not use it as a platform to make clear this new reality and enlist the support of the United States in a multilateral future. We must encourage political leaders from across the globe to find the political will to put down some markers about re-creating the conditions for effective multilateralism and redefining the role of the UN.

Speaking at the opening ceremony the founder of the World Economic Forum (WEF) Klaus Schwab underlined the interdependence of security and prosperity and called for the “full engagement” of leaders in resolving conflicts. He opined that “there are four ingredients which are the characteristics of a leader. To be a true leader means brains, soul, heart and nerves; brains to act with professionalism, soul to know what the mission is and the heart to act with passion in what we do, and finally the nerves to deal with complexity and urgency. This annual meeting will be successful if we all engage to advance the issues on the global agenda, to really commit ourselves to the World Economic Forum to improve the state of the world.”

Khatami’s Keynote Address: President Mohammad Khatami stressed that the relations among states could be more human if the big powers have stronger commitment toward internationally accepted rules and norms. The following are extracts from his speech:

Attending the annual meeting of the World Economic Forum is of immense significance for all those who are sensitive towards and worried about the economic, political and social problems of the world as this forum is an ideal venue and a great opportunity to discuss these preoccupations and hammer out solutions for them.

A fundamental aspect of the modern view towards “Human Knowledge” is the attempt to establish “dialogue” amongst different domains of science. This effort started, after transition from a period characterized by emphasis on “specialization”, with the aim “coordinating” achievements of science. Learning from tradition and history and also endeavors to collect and regulate sources of science can be summed up in a single statement, and that is, efforts to open windows of “dialogue” between the present and the past and promoting dialogue amongst various thinkers, scholars and artists of the present day. And since our evaluation of results of any dialogue is based on our thoughts and experience, therefore, in reality our proposed dialogue, either historical and diachronic or modern and synchronic, is a critical dialogue.

When the Islamic Republic of Iran proposed the dialogue among civilizations and cultures at the United Nations, probably then the numerous dimensions and implications of this proposal at major areas of human life were not clear at all. But with the passage of time, the fundamental and vital importance of this proposal is gradually becoming clearer.

If we are truly committed to the principle of “dialogue” in our international relations, domestic communications and personal interactions, then we are bound to accept the main element and principle of any “dialogue”. As we are told by great thinkers, the most important factor in each dialogue is that we sincerely and truly accept the fact that the views and arguments of the party might be true. If we accept this assumption, in the course of “dialogue”, we will try to understand views and arguments of our opponent with a great deal of attention and concern, before trying to prove our own views. Under such a condition, emergence of a “real understanding” will not be far-fetched.

If big political and economic powers of the globe accept the principle of “dialogue”, the hope for improving the life of the poor will not remain unachievable. Nowadays, we know well that in our political and economic relations, if the underlying principle is “dialogue”, a great deal of worries and anxieties of the opponents of “globalization” which is prompted by the fear of merging many diverse and different cultures in a huge cultural leviathan, will be removed because it is crystal clear that a dialogue will only become possible with the survival of the other party of the dialogue.

As a result, we will neither suffer from extreme separation nor will cultural merging happen. The miracle of dialogue makes coexistence and cooperation possible because only through dialogue the path of life is treaded “together” and traveling through a common path will lead to “going along with each other” and ultimately “being together.” The organic connection of various parts of our planet has now become so clear that there is no need for further explanation. Consequently, the key to survival of human kind is “being together”, “going along with each other” and “talking together”, and, this is not the need of the poor and the poverty-stricken only, rather the wealthy and the powerful are equally in need of this “togetherness”, “accompaniment”, “talking together” and “participation.”

The history of evolution of the basic concepts of social sciences, including the political and economic sciences, present many great lessons for the betterment of political and economic relations in the world today. If we accept that politics is the art of creating the highest degree of reconciliation between the ideal and the possible, then we have admitted the clear contradiction between the ideal and the possible. It is obvious that once “contradiction” arises, the solution to overcome it requires rationalism and ethics, and there is no course for application of rational and ethical rules but “dialogue”.

“Contradiction” in economy, too, is one of the main issues. I admit that one of the main mandates of economics, is research and investigation into principles governing allocation of scarce resources to “contradictory” goals, then the necessity of dealing with “contradictory goals” and overcoming “contradiction” through “science” and “dialogue” in economy clearly manifests its importance.

Even if, like economic historians, the main interest of the researcher is directed towards the science of wealth, and of his “principles of correct utilization of limited resources” is a secondary issue and of lesser importance, again we realize that for defining wealth we have no alternative but to turn to “common sense” and “inter-subjectivity” will come only through opening the doors of global understanding and dialogue.

In any areas where economy meets ethics, politics, sociology and social psychology, solution to economic problems, including expanding economic justice and attempts to eliminated and remove basic deprivations of human beings, will come through understanding and dialogue.

The grave danger threatening us is that instead of precise and subjective cognition of economic and social problems of different societies, we turn to rely on an artificial and abstract language, which instead of establishing communication and understanding, itself turns into a hindering obstacle. Focusing on this issue is not merely a linguistic or philosophical subject.

If we are asked what “wealth” is, we might say “abundant per capita supply of necessary items and means for a prosperous life.” But if we are asked, what the “necessary items and means for a prosperous life” are, then what answer could we come up with? To find the answer it would be enough just to look at the horrifying and alarming numbers of loss of human lives in poor countries. Only then, we might probably realize that a drop of water and a piece of bread in many parts of the globe are considered prosperity and a blessing, equal in value to life itself.

“Poverty” is neither a concept nor an artificial plastic term. Poverty is a bitter and ugly reality which is housed in the weary and sunken eyes, drawn and haggard faces and empty hands of millions of people. The world today has got all it needs and all it takes to uproot and eliminate this ugly and bitter reality. Wiping away poverty from the face of human societies and promotion and expansion of justice is not only a wish, but the founding principle of emergence of great religions.

The Holy Quran clearly states that the ultimate reason for dispatching messengers of God is the establishment of justice and also how that the prime objective behind appointment of messengers of God and revelation of Divine Books is expansion of justice. Although religious justice has a scope and scale far greater than economic justice is the primary requisite for religious justice and in materialization of economic justice, religious and ethical preaching will not suffice.

In order to make economic relations more humane, the firm determination and commitment of big economic powers is the first prerequisite. I sincerely hope that this meeting—through adoption of clear measures—will take effective steps towards this end.