Institutionalist economics believes that development in the country requires establishment of suitable institutions. Therefore, they say various institutions must be established commensurate with different circumstances. The legal issue also plays a major part and they should be considered in all arguments. Therefore, establishment of institutions that would pave the way for economic development of a country takes precedence over development itself. There must be legal, economic, cultural, political and social institutions.

In this way, developments in a given country would necessitate establishment of suitable institutions that are considered as a prelude to economic development. Therefore, cultural discussions stress establishment of cultural institutions, while realization of a civil society requires the establishment of civil society institutions. Therefore, the motto brought up by President Khatami was very good for our country. As long as we don’t have a civil society, we could not talk about law abidance and in the absence of law abidance, development would be impossible. Basically, development in countries is not an accidental event. All developed countries have paved the way for development of their countries step by step from a long time ago. In my opinion, when we talk about democracy, it needs establishment of suitable institutions as a prelude to the establishment of a democratic atmosphere in the country.

We must also work on culture so that people would believe in democracy and accept it. On the whole, all these problems complicate the issue of the country’s development. As long as these steps have not been taken, it is not right to talk about development or its absence. This viewpoint has been considered in compiling long-term prospects for the country.

Today, technology and industry is serving agricultural sector in the world to boost its production. The service sector of our country can export services, at least, to Central Asia.

The Fourth Plan would be different from previous plans in several aspects. Of course, these differences only exist in abstract because as long as the legal stages are not over, the plan would only be a proposal. One difference is the issue of prospects. The Fourth Plan has been drawn up on a prospective basis. We can look at the future from two viewpoints. One viewpoint is based on our prediction of the future. We anticipate our capabilities and the status quo and depict a future picture. In this state, we look to the future and imagine a desirable situation for ourselves. Then we take steps to reach that desirable situation. In fact, it is like the difference between existing relative advantages and the advantages that we create. If we want the country to tread on the right path, we have got to create advantages. Sometime, however, we base our plans on existing advantages. At present, we have got to create some advantages. Therefore, we must change our attitudes and pave the way for realization of the acceptable goals. These developments might be very profound. Basically, they are easily ignored.

In this way, we have considered some prospective goals for the country. For example, we want to become a developed nation and rank first in the region. Immediately after setting the goal, we specified its characteristics, which included moral, value, social, political, economic and scientific features. Why? Because the concept of growth—especially high growth—would be meaningless without all-out development of the country’s structures. When we talked about economic growth some objected that we have only paid attention to the economy, while, in fact it was quite the reverse.

Today, when defining economic growth, they say, growth is an elevation of the quality of living. The standard of living cannot be boosted without social, cultural, political and economic development in the country. If we want our economy to grow by an annual rate of 8.6% (a 7% figure is indicative of rapid growth), then profound developments would be needed in the country. We must plan for the long run. With regard to institutionalism that you referred to, we must consider that such changes need a long time. Certainly no deep change could be brought about in two years. Even 20 years is not a long time. However, it would provide a better opportunity to achieve our goals. The attitude in countries with long-term plans is quite different from our country. Those who wait for a crisis to come their way and then think of how to tackle it act like fire fighters.

So, a difference between the Fourth Plan and previous plans is that scientific work has been done on how to achieve its objectives. It is not merely wishful thinking. It does not suffice to try to make our goals realize; we must see whether our country’s conditions would allow us to do so or not.

We cannot claim that previous plans were not attentive to other fields, but since they were written following the imposed war and during the reconstruction period, they were more focused on related issues. The Second Plan stressed infrastructural investments and reconstruction. They felt that attention must be paid to infrastructures. The Third Plan emphasizes structural reforms. Naturally the Fourth Plan and future plans must pay attention to the issue of economic development. For this reason, we made high economic growth a major objective of the plan. We have the necessary infrastructures in the country. Structural reforms have also been carried out to some extent and we are ready for a leap. If we consider Mr. Rostov’s growth model, we are at the stage of an economic spurt, which is the second phase of the five phases of his model.

At present, we think that adequate grounds have been made for attending to economic growth. However, a high economic growth would require development and we cannot say that since we have targeted a higher economic growth, our attitude is purely economic.

We are looking forward to the next 20 years. We think our attitude has deepened and we are struggling with more serious challenges. We are planning to overcome these challenges during the next 20 years. That is, we do not think that a five-year plan can solve all our problems. Unfortunately, this was a problem with the Third Plan. At that time we thought that we could solve any problem through a five-year plan. It was very ambitious, though the theme chosen for the Third Plan on the basis of structural reforms was quite correct. We couldn’t implement all structural reforms anticipated by the Third plan, but the structural reforms would continue during the Fourth Plan.

No. I don’t say that they would be solved. I said our goal is to become a developed country. The Malaysian government aimed at becoming a developed country. In their latest prospective plan, which is known as 2020 and started since 1990, they planned to become a totally developed country. If we claimed the same you would be right. We cannot turn from a developing country into a fully industrialized and developed one in 20 years, but we can become a developed state. Afterwards, we can move toward full development.

It needs determination. When defining development the first factor for development is existence of a strong political determination to that effect. It is not only the government’s task, but the whole system must be involved. In other words, it needs a national will. None of them depend on our desire. As long as such a determination has not been created, our country will continue to be a developing state. We are potentially capable of becoming number one in the region. This is not idealistic, but an achievable goal.

For example, we have projected a 10% investment rate for a 10-year period. For many years, investment rate in our country has been 10%. We have targeted a 48% participation rate, which has already been experienced in the country. We experienced a more-than-10% economic growth during 1963-1973. Achieving $6 billion of foreign investment until 2015 is not a very high figure for a country so vast and with such a strategic situation as our country.

There were requests for about $4 billion of foreign investments during the past and the current years. If we take the initial steps on the right path, we can achieve the $6-billion figure even by the beginning of the Fourth Plan. Foreign investments require economic stability and security and a good rate of return. The yield of investment in our country is, for various reasons, high. If suitable conditions in terms of investment security were provided, our country would be a good place for such investments. We have nothing less than China, which attracts $60 billion in foreign investments annually.

We aimed to increase non-oil exports to $32 billion. Due to investments made in oil and petrochemical sectors, we would earn 15-20 billion dollars through petrochemical exports in 2015 and the remaining $10 billion would be earned through exporting other products. We say export of goods and services, not solely export of goods.

During the past few years, we could export more than $2 billion of services. We have not yet attained the Third Plan’s goals for export of goods and services.

The main setback to the Third Plan was that we wanted to realize all our goals within the framework of a five-year plan. However, for the next 10 years, we aimed for $32 billion on dealings in goods and services, which is quite achievable. With regard to liquidity growth, we aimed to hit 16-16.5 percent in 2015, with a 5% inflation rate and a 7% unemployment rate. That is, we mean to make the above rates one-digit, which is not impossible. They could be realized through due attention to globalization and interaction with the global economy.

Interaction with the United States does not necessarily mean to have relations with that country.

We must not aggrandize that issue. I have worked on it already. I was in charge of the research group when drawing up Iran’s commercial regime. The reality is that we do not necessarily want to enter that organization, but we need structural reforms to which the Supreme Leader referred during his recent remarks. Even if we didn’t want to join WTO, we would have needed to carry out structural reforms.

Today, technology and industry is serving the agricultural sector in the world to boost its production. The service sector of our country can export services, at least, to Central Asia. For example, banking and insurance is more long-standing in our country than its neighbors. Such developments must take place regardless of membership or non-membership in WTO. If we become a member of the WTO with the said conditions, the negative consequences of our membership would decrease dramatically. Membership of countries depends on their economic capabilities. It took 14 years before China became a member, while Cambodia did not undergo such a process. Another important point for the negotiating country is its share of global trade. If it is meager, especially with regard to exports, the process would be shorter. If a country is an exporter, although it would be to its benefit to become a member, other countries would regard it as a rival and will be more austere. At present, our major problem is political challenge with the United States. Anyway, interacting with global economy is not solely possible through membership in WTO. Interaction means to uplift the quality of our products and gain a share of international markets. If we become a member under such circumstances, the negative consequences of our membership would be reduced. On the other hand, becoming a member does not mean that they won’t allow us to be active at a global level. Of course, if we don’t become a member we could not take advantage of WTO preferences and working would become somewhat hard.

During the Third Plan we did everything to pass its law and then everybody forgot about it. However, we have about one and a half years time, which starts as of next month and will continue to the end of the Iranian calendar year 1383 (21 March 2005), to make the plan operational. Please note that when we talk about the Fourth Plan, we mean the Fourth Plan as a whole, which includes prospects, goals, strategies, policies, operations, management implementation and so on. The Fourth Plan comprises all of the above components and not only the part that we want to pass as a law. In other words, it is only a small portion of the Fourth Plan that we want to be approved by the Majlis (Parliament) as law. The whole is much bigger than that. For example, if the Fourth Plan were one thousand pages, perhaps only one hundred pages would be the Fourth Plan Law and nine hundred pages delineate goals, strategies and policies.

In fact, we divided the Fourth Plan in two parts. One part deals with legal requirements for which the government would need Parliament’s approval. The other part is concerned with the government’s powers. The government can use its powers. But another part that would certainly need Parliament’s approval is the financial part because according to the Constitution any kind of receipts should be carried out on the basis of Majlis approval. An approach considered by us is drawing up special programs. We must choose major issues of the country such as rural development, empowering the private sector and developing IT. The issue of metropolises needs special programs to determine, for example, that to what extent we can develop the private sector.

Job creation is not the task of a single ministry or a specific sector, but it is a trans-sectored issue. It will need a comprehensive employment plan.

We cannot exactly use these figures, but if we aimed for judicial development, part of it would need a law that must be approved by the Majlis. However, the Judiciary has many powers that can be used for judicial development of the country.

Referrals to courts have greatly declined in many countries and most cases are settled in other places called arbitration chambers. However, all our cases are discussed in courts and all of us complain about the long process of attending to judicial cases. Establishment of arbitration chambers could reduce referrals to courts and we can provide conditions to make lawsuits more rapid, less expensive and accessible. This is a duty of the Judiciary. The Constitution has given many powers to the Majlis, but if we want a real development to take place in the country, it does not necessarily mean that a special law must be approved or there should be a law known as the Fourth Plan Law.

We aim to make plans operational. We draft an executive plan on, for example, how we can empower the private sector, what are the duties of the executive organs and what facilities must be provided for empowering the private sector. However, when it comes to sectors, all sectors must put down their operations during the next 1.5 years and present them to the government. Therefore, if for example, the agricultural sector aims at achieving self-sufficiency with regard to wheat production, it must clarify the required process for the five-year period.

In this way, we hope that all organizations will not suffice to approval of a specified article in the Fourth Plan for them, but they must announce what they are going to do during the coming five years. For example, with regard to self-sufficiency in wheat production, the Ministry of Agricultural Jihad must aim to supply the equivalent of 20% of the country’s imports per year. This means that it would become self-sufficient in five years and we would no longer need to import wheat. To do this, the ministry must announce its needs and must clarify what measures must be taken and what facilities are needed to do that. In other words, we hope that our budgets would become operational and if an organ has no plans, no budget must be allocated to it.

Apart from plan and prospective documents we have three other kinds of documents: 1. trans-departmental documents; 2. departmental documents; and 3. provincial documents. Fortunately, part of provincial studies have been carried out within the framework of land preparation plan and another part has been carried out recently (the work has been completed for eight provinces and plans related to the rest of them would be complete by the year-end).

With regard to departments we expected departmental documents to be ready by the end of the current year. However, the deadline for all of them is the end of next year because the Fourth Plan would be put into action as of the beginning of the Iranian calendar year 1384 (21 March 2005). Besides, we hope to finish the executive bylaws of the plan during the next year.

Therefore, we are expected to have departmental, trans-departmental and provincial documents ready at the beginning of the plan and everything is ready for a good start. The critics of the Third Plan said that its executive bylaws were prepared 2-3 years after initiation of the plan. We hope to prepare the Fourth Plan’s executive bylaws before the start of the plan.

Liberalization is part of the interaction with the global economy. However, liberalization must be preceded by providing suitable grounds and correct planning. We cannot start interacting with the global economy and still ban import of a certain commodity. Liberalization means to do away with monopolies as well as all non-tariff limitations.

The WTO, which pursues propagation of free trade, has accepted tariffs but has rejected non-tariff obstacles. In addition, the organization has accepted bilateral and multilateral contracts. To pave the way for Iran’s acceptance into WTO, we must prepare suitable grounds for conclusion of bilateral and multilateral contracts with other countries. This will decrease the negative consequences of our membership because such contracts have been accepted by the WTO. So, when we talk about liberalization, it does not mean to leave everything as is. With regard to competition, there are 240 indexes to determine the degree of competitiveness among countries. We hope to be able to calculate these 240 indexes and see where we stand in terms of competitiveness.

The governments are supposed to pave the way for competition between their companies and foreign firms. The advanced countries also do this. Therefore, instead of competing with one another, the government’s support their companies through acceptable and logical means.

We have brought up the issue of economy of wisdom as an axis. It can play a great role in the country’s developments.

It means that developments that take place in a country’s economy must be based on scientific developments and theories and it has several indexes. We are going to provide these indexes by the year-end. The indexes were already drawn up in another place, but they were wrong because they did not consider a suitable place of our country even in the region. We believe that our status in the region is way beyond what they said.

They prepared indexes according to their information. However, we are going to prepare our indexes with an eye on IT and ICT as well as commercial competition and scientific research underway in our country.