The Forum for Partners in Iran's Marketplace
 
 
 
 
 
 
 
 
 
 
 
     

May 2008, Nos. 46&47


Endeavor

Toward a Downsized Government

A major barrier to Iran’s development is absence of powerful political parties.

A powerful parliament is another feature of a downsized government. For a parliament to be powerful there should be real deputies who are brave enough to question and oversee government’s performance. They should also be capable of interaction with the government. Of course, there should be no confrontation between government and parliament as it happened over working hours of banks or when the president refrained from complying with Majlis ratification and Majlis speaker had to resort to the Supreme Leader.

If we aim to be the first power in the region and move toward all-out development, we must avoid of sinusoidal policies, which will only serve to waste country’s resources. I think a downsized government and a powerful Majlis are all we need to move toward development. Reformists Coalition Headquarters collects votes for people whose names would be on the reformists list. Perhaps some of them would be chosen and others not, but the main approach is that the Headquarters and National Trust Party share many commonalties.

A major barrier to Iran’s development is absence of powerful political parties. Perhaps parties facing domestic or foreign limitations had been there for a while before losing their importance, but if we pursue true development, we must establish true parties. Perhaps in small towns, parties do not play a major role in elections, but they are influential in big cities. Therefore, parties are needed to ensure people’s high electoral turnout. Reforms will prevent certain groups to promote reactionary ideas under the aegis of Islam. It is not appropriate for the highest ranking executive official to claim that he has been surrounded by a halo when addressing the United Nations General Assembly meeting. Reformists cannot accept such claims.

Reforms constitute a way of thinking, not a revolution, and reformists are not trying to drastically change infrastructures of the Islamic system. In fact, reform ideas were initiated by Imam Khomeini because an overarching system is one which can accept feedbacks.

The ninth government had availed of the most exceptional economic conditions in the whole history of this country and all organs of the Islamic system supported it.

Reformists have plans to run the country on an oil price of 100 dollars per barrel, but it seems that some politicians have no plans and are trying to derail the country’s development. Unfortunately, some parties lost a number of their candidates for the recent parliamentary election due to disqualifications and parties were less motivated to take part in the election. However, political parties were determined to take part in the election to prevent Majlis from becoming a ceremonial body. The main premise was that high turnout of academicians and independent forces would enable the reformists to gain majority seats in the parliament. At present, reformists stand a high chance of being elected in those constituencies where they have been given a chance to run and in other constituencies, independent candidates are probable to win. The main concern of reformists is to hold healthy election and this should be the main concern of the state officials to ensure that people’s votes would be respected.

Setting direction of domestic economy: Once it was said in the seventh government that the economic ship of the ninth government has no compass. Our most important effort should be aimed at setting correct direction of that ship. At present, a foremost challenge facing the Iranian economy is heavy dependence on petrodollars. A country with such resources can progress rapidly, but when we look back at the past 40-50 years, we see that oil revenues have played a destructive role in the Iranian economy. Oil has also influenced political issues and has made the government unaccountable to people. When people fund government projects through taxes, they are in a better position to oversee its performance, but with abundant oil, governments have always thought that they are doing a favor to people by providing them with facilities and there is no reason for accountability.

In reality, however, oil revenues should play their true role in development of the country. Unfortunately, oil is playing a destructive role in most countries which are dependent on natural resources and per capita growth figures for those countries is constantly lower than countries which are not reliant on natural resources. This challenge has led to a more serious challenge in the form of an oversized government. That government has encroached upon all fields in which people should be active.

The main question regarding strategic development of the country is how governments are to realize the ideal goals which they promise to their people? How we must create foreign policy conditions as well as domestic conditions and tools which would take us to our ideal goals? Obviously, such changes do not occur spontaneously and a major precondition is that the government should be able to play an effective role. I believe that short-term or medium-term executive policies can take us to the ideal point. We had three plans after the war ended: one plan aimed to compensate war ravages; the second plan sought to improve economic conditions, and the third plan gave priority to economic liberalization. Liberalization would have downsized the government and enabled it to interact with the world in a positive manner. At the same time, it would have done away with economic rents which lead to loss of resources, reduced dependence on oil revenues, and help the country to achieve its economic goals. The Third Economic Development Plan convinced the country’s economic officials that the country was ready for an economic spurt. Therefore, the Supreme Leader asked the government to prepare the 20-Year Perspective Plan in cooperation with the Expediency Council through a major work which took 3-4 years.

Important role of parliament in economic legislation: Correct legislation is requisite for achieving development goals. However, status of legislature has declined so dramatically that the Executive determines about working hours of banks while some laws ratified by the parliament are easily ignored. This shows that interaction between Majlis and government has not been satisfactory. Attention to basic economic principles and having good knowledge of issues for which laws are ratified are important issues that should be taken into consideration. Can following suit with successful countries be helpful? The answer is certainly negative because their policies may have been suitable for their own countries, but if we wanted to achieve the same goals, we should take a different path.

However, taking advantage of experiences gained by other countries will help us take a shorter route. During recent years many countries moved to modernize their economies and the first country which did this was Britain where the trend took 58 years. The United States did the same in 49 years, Japan in 38 years and South Korea, which started its march toward development almost simultaneous with our country, did it in 11 years. Finally, the most successful country in this regard has been China, which has greatly increased its per capita income in a matter of less than 10 years. Therefore, correct policymaking will help us achieve our goals sooner.

The main goal of the government is to compile policies to achieve ideal goals of the 20-Year Perspective Plan because the world is moving so rapidly that the slightest mistake in policymaking may have irreparable consequences. Therefore, we must make suitable developmental policies by paying attention to experiences of countries which have been already successful in this regard.

Those countries first invested in their manpower. No country has been able to achieve development without attention to its manpower. However, the ninth government talks about development at a time that development has not taken place in reality. Instead of spurring production, unprecedented high oil revenues have only increased imports and importing goods and services is known as the sole way to control inflation.

A powerful political will is needed to run the country. A sloganeering government cannot promote industrialization. The Perspective Plan pursued an ideal goal on the basis of which the Fourth Economic Development Plan has come into being. However, due to incorrect and unscientific policies, indicators of economic growth, production and capital are not proportionate to outputs. Those who are chanting slogans about controlling inflation should tell people why when they had full control of the government and the parliament, inflation shot up from 12 percent to 20 percent? The ninth government and the seventh Majlis were endowed with unprecedented oil revenues.

The most natural expectation was that a government which was the result of election, not a revolution, should abide by country’s laws and treat 150-160 billion dollars of oil revenues in a logical manner. However, despite people’s expectations who were looking forward to higher living standards, the government policies turned Iran into a rich country with poor people. As a result of those policies, inflation has increased from 13 percent in 2005 to 20 percent in 2007 and is expected to go higher during the new Iranian year. The main reason for such a high inflation is inattention to past policies while none of those countries which are considered developed now, have been ignorant of their human resources.

 

Subscribe to
IRAN INTERNATIONAL

CURRENT ISSUE
   
  May 2008
Nos. 46&47