November 14th marked the anniversary of the announcement of the Twenty-Year Perspective Plan which was ratified by the Expediency Council and approved by the Supreme Leader. According to the points delineated in the document, official structures, especially the executive branch, were required to act within the framework of the Perspective Plan. But has this actually happened? Coinciding with the anniversary of its notification, the Management and Planning Organization has finalized its first annual comparative report on the Twenty-Year Perspective Plan.

According to Mehr News Agency, the Management and Planning Organization has prepared the annual comparative report on the Perspective Plan in line with article 158 of the Fourth Economic Development Plan. The Twenty-Year Perspective Plan aims to turn Iran into the number one power in Southwest Asia in various fields. Therefore, in addition to the realization of annual goals of the plan, our economic indexes should stand higher than those of other regional nations.

The first annual comparative report on the Twenty-Year Perspective Plan has attended to the abovementioned issues. While the annual survey report on the Fourth Economic Development Plan only focuses on the growth of domestic indexes and the realization of the goals put forth by the Plan, the soon-to-be-released annual comparative report will compare domestic indexes with statistics from other countries in Southwestern Asia.

The report puts the economic growth rate of the country at 5.4 percent in 2005, ranking it sixteenth among the twenty-four countries of Southwest Asia. The Plan had projected an economic growth rate of 5.8 percent. Moreover, according to figures released by international bodies, Iran’s per capita production stands at 7,700 dollars which is above-average for Southwest Asia and ranks it 18th among the countries of the region. In terms of investment, Iran ranked second in the whole region in 2005 which was similar to its ranking during the 2000-2004 periods. However, investment in the country is constantly rising. During 2000-2004, Iran ranked first in the region in terms of gross domestic product at average rate of 40.2 percent per year. In terms of employment profit rate Iran lags behind Southwest Asian countries that have not experienced the same population growth as Iran.

Perhaps the absolute employment rate is a better norm for comparison; yet, employment growth rates present a better picture. In 2005, Iran’s employment growth rate was about 3.7 percent from a year before, which shows a slight increase in the mentioned period. However, the figure is higher than the average employment growth rate in Southwest Asian countries (3.1 percent) and ranks Iran sixth in this regard.

The report puts the unemployment rate for the 15 and above population at about 12.2 percent, showing slight reduction compared to the average of the period. In other words, the unemployment rate in 2005 has reduced by an absolute figure of 1 percent compared to the period’s average. Also, when it comes to social welfare and distribution of income, the highest Gini coefficients (signifying income disparity) among Southwest Asian nations during the 2000-2004 period pertained to Turkey, Iran, and Georgia while the lowest Gini coefficient was registered by Kyrgyzstan, Pakistan, and Tajikistan. Despite the reduction of the Gini coefficient in Iran in 2005, the average coefficient in the said period (2000-2004) compared to the total average for other countries in Southwest Asia (363.0) shows that we lag behind regional countries in terms of improving the income distribution index.

He also noted that the domestic economy is facing insufficiencies in various fields, such as financial discipline, which have also challenged other governments. Asked to clarify "financial discipline" and whether or not the term refers to the economic policies emphasized by the Ninth Government, he added, "Financial discipline does not solely mean saving. Saving is part of that discipline. But in budgetary terms, it means a balanced budget. Discipline means that for every Rial that we spend we should be able to imagine a profit; we must get something in return for everything we give out."

Discussing the impact of oil revenues on the Twenty-Year Perspective Plan, Qasemi mentioned that "one of the structural problems of the country’s economy is the presence of oil revenues." He continued by saying that the relative ease by which oil revenue is achieved has made the economy "lazy" and has led to the emergence of the Dutch Disease within the economy.

He believes that achieving the Twenty-Year Perspective Plan requires a "national resolve" which is beyond the capacities of a four-year or eight-year government. Qasemi expressed hope that the government will empower the private sector in light of a new interpretation of Article 44 of the Constitution. Yet, this "cannot be achieved through direct orders." Rather the government "should pave the way for the participation of the private sector in the economy and as long as that has not happened, we cannot expect the goals of the Twenty-Year Perspective Plan and Article 44 to be achieved." The government needs to support the private sector by providing subsidies to investors and move to bolster the private sector.

In conclusion, Qasemi also discussed the best use of oil revenues, and stated "If I was to decide, I would have encouraged investments in areas that could replace the country’s assets. I am not solely referring to the government’s reconstruction plans." Moreover, we must refrain from "injecting foreign exchange into our economy" since it cannot "absorb petro-dollars" beyond its capacity.