Let's Realize Economic Challenges
How to control inflation
in an economy is no more an unresolved problem. Inflation
in approximately 150 countries, according to the World Bank report in
2011, was below 8 percent. More than 150 countries have been able to
manage and check inflation.
Progress in economic dimension is essential for the survival and prosperity
of a social and political system. Economic development is measured by
several parameters. The per capita output growth in the society,
unemployment rate, inflation, income distribution among various strata of
the society, average education level of the labor force, gaining access to
education and health services, life expectancy, level of cultural products,
ensuring living at the time of retirement and unemployment are among
indicators of economic development.
the contemporary world in which communications have become rapid and
extensive, different societies are familiar with the situation of each
other. Higher economic development in a society compared to other societies
is indicative of the capabilities of social, political and economic system
in betterment of the living condition of the people of that society.
Economic development will increase self-confidence of the society and its
people. Economic progress will result in preservation of human resources and
prevent brain drain and even attract brains outside the country. Human asset
in the meantime will strengthen the society which will itself result in
further progress of the society. Economic development increases financial
ability of the society for strengthening of the defense capability and
consolidating human and material resources for cultural and intellectual
development of the society. Economic development will result in improvement
of the living condition of families and prepare the ground for strengthening
of the foundation of families and reduce moral and financial corruption.
Given the importance of economic development, one of the major concerns of
the society and its managers is inevitably economic development. Some of the
major aspects of the country's 20-year Vision Plan are relevant to
indicators of economic progress to such an extent that Iran would stand in
the first position in the region. Many hints, recommendations and guidelines
that are discussed at public forums are relevant to the livelihood of the
people and performance of the society in the domain of economic development.
With regard to the high rate of inflation and unemployment and meager
economic growth under the present condition it could only be said that in
most years of the past decade economic progress of the country was far away
from what could be considered suitable. Such a situation would naturally
pose this important question that what are the main challenges in the course
of economic development of the country? The answer to this question and its
root cause could be sought in the historical background and cultural or
political structure. Moreover, effects of such roots could be analyzed in
the domain of economic progress and also impacts of economic progress or
lack of economic progress on root causes could be studied in historical and
political fields. But, this paper intends to review challenges that directly
limit economic development without seeking to look deeper into the roots of
these challenges in historical, political and social fields.
The fourth mental and intellectual factor
which underlines economic progress is the mentality of the
society towards investors and entrepreneurs.
the economic domain, the main challenges for development could be classified
into two layers. The first layer is the mental and intellectual principles
and the second layer is the important manifestations of mental and
intellectual layer. In terms of what will follow, challenges hindering
Iran's economic development are not inflation, unemployment, income
distribution, and lack of funding. All these symptoms are due to mental and
intellectual challenges in the field of economic development. How to control
inflation in an economy is no more an unresolved problem. Inflation in
approximately 150 countries, according to the World Bank report in 2011, was
below 8 percent. More than 150 countries have been able to manage and check
inflation. Or the difficulty for increasing investment and reducing
unemployment in many developing or newly developed countries such as South
Korea, Brazil, China and Turkey have been solved. What is important and
should be addressed are mental and intellectual principles which provide the
ground for regulation and implementation of solutions to the above problems.
1. Mental and intellectual principles in economic development
Four major mental and intellectual challenges that could foster economic
progress or hinder it are as follows:
1.1 Development-oriented mindset:
For economic progress the mindset of senior managers of the society should
be development-oriented. In a development-oriented mindset, economic
development and progress enjoys high priority and importance. In a
development-oriented mindset challenges for economic progress are considered
and solved on top of other issues. In development-oriented mindset, if the
rhythm of growth and development in a region, such as Assalouyeh, slows down
instantly the causes are identified and would be removed. In a
development-oriented mindset, the first issues that are reviewed and
resolved are the issues facing economic development. As an observer
monitoring the management scenes in the country, the author does not trace
indications of a development-oriented mindset in the executive management of
the country. It seems that political and security challenges as well as
regional and international relations, regardless of their developmental
impacts, enjoy further priority and importance.
1.2 Mindset on the role of the government:
Governments could play a determining role, be it positive, negative or
deterrent, in economic development. The role that governments play is the
result of the mindset of senior managers on the role of the government. One
mindset considers the government the main factor for development. According
to this mentality, the government would implement development and investment
projects for the progress. To show further progress, the number of projects
undertaken or launched by the government should increase. The number of
dams, stadiums and factories built or opened by the government would show
the statistics for progress.
But, in another mentality the government is considered the “executive and
provider of development”. In such a mindset the government is at the
disposal of factors of economic progress instead of direct involvement in
development. On the basis of this mindset, the government would only become
active in establishment of physical infrastructures such as construction of
road and port networks and offering infrastructural services such as
education, health and safety. It would regulate financial, monetary, import
and export, and international relations policies in order to facilitate
development and progress. On the basis of this mentality the government
would attempt to pull people's capability and capacities to the scene of
economic development. In the case of activation of people's talents and
abilities in the scene of economic progress and preparing the ground and
their support by the government, development would take momentum and the
society would proceed forward with full capacity and not just through the
limited power of the government.
1.3 Development-oriented judiciary:
Economic development needs a proper legal and judicial background in order
to solve and adjudicate legal disputes in the area of economy with
sufficient speed and care. In activities which are conducted for progress,
differences may arise between economic activists. It is possible for some to
violate the rights of others. Under such circumstances presence of an
efficient judiciary with skilled and impartial judges who could study the
cases and address issues with the required speed is specifically necessary.
The development-oriented judiciary is a branch which would address judicial
issues in economic progress upon priorities and full dominance, safety and
speed and judge them. It would also enjoy skilled judges fully cognizant of
judicial cases. With the presence of a development-oriented judiciary,
people would become active in economic progress with peace of mind and legal
frictions and conflicts wasting the time and energy of economic activists
would be reduced, violation of others' rights in the field of economy would
be minimized as the violators would understand that their violation would
soon be addressed and they would be punished. Therefore, violation of
others' rights and creation of frictions would be dramatically reduced. In a
judiciary which is not development-oriented, addressing economic cases is of
lower priority. Other issues such as political and social issues would enjoy
priority and judges have less knowledge, experience and skill of dealing
with economic issues.
1.4 Positive mentality of people towards investors and entrepreneurs:
The fourth mental and intellectual factor which underlines economic progress
is the mentality of the society towards investors and entrepreneurs. Of
course, the mentality of the society itself is influenced by the mentality
of senior managers, mentality towards the government and presence of a
development-oriented judiciary. But, in a proper mental and intellectual
foundation for development, the society should respect and honor investors
and entrepreneurs in the area of development.
Investors and entrepreneurs for development are the key and valuable people
who would be respected and honored by the society so that people with more
talents would be attracted towards entrepreneurship and investment and if
the mentality of the society towards investors and entrepreneurs is
negative, and if they are considered opportunists or violators of others'
rights, in that case investment and entrepreneurship would not prosper and
the pace of progress in the society would be slowed down. In creating a
positive mentality towards investors and entrepreneurs in the area of
economic progress, political and cultural managers of the society could play
an effective role. The positive and effective role of managers would emerge
when their mentality is development-oriented and the government is at the
service and provider of development and not a direct factor for it.
2. Manifestations of mental and intellectual principles in the field of
Mental and intellectual principles that were described in the previous
section, would exhibit manifestations in the area of economic progress which
would have direct effects on development. In this part three most important
manifestations are offered.
2.1 Transparent and competitive market-based economy:
When the mentality is that the government is serving development and
preparing the ground for it instead of being its factor, economic activities
would be shouldered by the people and non-public elements. What regulates
the relationship between private economic activists would be competitive and
transparent relationship in the market-oriented economy. Government
intervention in the form of direct economic activity or its intervention in
market mechanisms in the form of fixing prices, allocation of limited
sources among economic activists on the basis of specific privileges or
issuing certificates for activities of special individuals would not exist.
The mentioned activities by the government could divert economy from
competitive and free status and could result in rent-seeking and
The experience of progress in successful societies of the world is
indicative of the presence of a competitive and transparent economy. In such
economies, government policies would be formulated and regulated as an
incentive for development. But, such policies would not exclude the economy
from its competitive and transparent status. In a competitive economy all
the talents would work for increasing productivity and for optimum
utilization of the limited resources in the society as well as better
production and services.
non-competitive and rent-seeking economies talents become more active for
gaining privileges and more rents rather than better products with higher
efficiency and productivity. In non-competitive economies people would
become rich by seeking rents and concessions whereas in competitive
economies people become wealthy through innovation and creativity of better
products and application of more efficient methods. For this reason,
competitive and transparent economy which is an indication of
development-oriented and people-based mentality would result in increasing
productivity and economic development.
2.2 Separation of economic expertism and management from political
Management of the economy and management of economic corporations is a
specialized task which needs the required knowledge and expertise. Despite
the complexities that exist in the economic system, today an important field
of human knowledge has addressed and developed the process of economic
management in a society. Many outstanding talents from various societies
have developed the economics in an effort to understand economic development
in societies and draw up policies for accelerations and facilitation of the
progress. In addition to economics which would generally address macro
management of the society, the knowledge of the process of administration of
economic organization and corporations would grow and develop in accordance
with the expertise of successful managers and pondering of thinkers and
scholars in the area of management. Familiarization of the knowledge of
management and expertise of successful organizations in the world along with
paying attention to local conditions and culture as well as acquiring
practical experience in management are essential for the successful
administration of organizations. Either in the area of economy or management
irrespective of theories as well practical and scientific achievements of
human beings success could not be gained in comparison with societies in
terms of economic progress. Trial and error in economy and in management and
efforts to “reinvent wheels” would result in wastage of resources and
opportunities and economic backwardness of the society in comparison with
other societies. Lack of economic progress in comparison with other
societies would result in creation of doubt in the ability of social and
political system in developing the society and would cause the emergence of
substitute ideas and motives or reforming the social system.
When economic expertism and management are not separated from political
management with the change in senior political managers in the society and
formation of a new political team, economic managers and even senior experts
would be appointed with regard to political affiliation criteria on the new
management team. In the absence of such separation, in the selection of
managers for large general or public firms priority goes to their political
affiliation rather than their managerial knowledge, experience and ability.
When managers are selected upon emphasis on their political affiliations,
their managerial capabilities would be placed in the second or third place
and the quality of economic management of the society and its economic
corporations would be downgraded, economic productivity would reduce and the
pace of economic progress would be slowed down.
in mental and intellectual mentality, mindset of senior managers of the
society is development-oriented, economic development and progress would be
prioritized. In that case in order to gain access to economic progress in
selection of economic managers and experts, priority would be given to
capabilities and knowledge of their management and economy. Thus from among
them with higher experiment and knowledge those who have a sound record of
activities and satisfactory managerial record would be selected. The first
criterion for such selection is expertise and managerial ability not
political affiliations. Based on a development-oriented mentality, issues of
expertism and economic management would be separated from political
affiliations in order to avoid economic development and progress to become a
victim of political affiliations.
2.3 International relations:
the contemporary world, economic progress is based on science and technology
which is progressing at an unprecedented speed. Rapid development of science
and technology is indebted to all human races in different parts of the
globe. Economic firms, academic and research centers, scientists,
industrialists and managers in many societies and countries of the world are
conducting research works and making discoveries; they invent and innovate.
Producers by focusing on specific products are manufacturing unique products
in different countries that are not produced in other countries due to scale
economy or the right of monopoly to certain invention.
human societies a type of distribution of work and activity takes shape.
Some societies and countries due to possessing certain resources or holding
specific expert knowledge or registered invention produce certain products
that are not considered economic in other countries. Countries exchange
their commodities and services and go ahead. By gaining access to goods and
services in other countries, the scale of products could increase and
production could become more economical. Movement of knowledge and
technology, capital, goods and services among countries would facilitate
their economic progress.
the contemporary world there is no country to have been able to remain in
isolation and achieve economic progress in the absence of interaction with
other countries. In the contemporary world economic progress of each country
necessitates economic and scientific interaction with other countries. If
the mentality of senior managers of the society is a development-oriented
mentality international relations of the country would be administered as
such that while preserving political independence, economic interaction with
other countries would be facilitated and would assist economic progress of
the country. In regulating international relations with market development
for domestic products, priority would be given to access of national economy
to knowledge and technology, to the possibility of attracting foreign
investment and international resources and finally to promotion of
interaction in economic business for economic progress.
3. Practical results
mental and intellectual principles of the society for economic development
are sound, that is to say when senior managers enjoy development-oriented
mentality; social and political system consider the government as serving
and preparing the ground instead of being a factor; the state judiciary
solves legal challenges of development in a fair manner with due regards to
priorities and restore their rights and finally when investors and
entrepreneurs enjoy respect in the society, then important practical
manifestations could be observed in the society.
Through a proper mental and intellectual infrastructure for development and
progress instead of a rent-based or public economy the following would
A competitive economy would exist wherein talents instead of seeking
rents and concessions would work to raise productivity and producing
more commodities and services by offering higher quality and more
Talented economic managers and experts would undertake management of the
macro economy and economic corporations and would prepare a proper
ground for economic development and progress.
International relations would prepare the ground for scientific,
technological and economic interactions and businesses.
Investment and entrepreneurship would promote.
Unemployment would be reduced.
Growth of national income would increase.
Inflation would be checked through scientific and proper management of
the macro economy and more products and, services.
Economic progress would be attained.
Financial strength would get prepared for progress in other areas such
as cultural, social and political fields.