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Tuesday, December 27, 2016

Economic Development Progress in Iran



The history of Iran’s economic growth

It is a well-known fact that Iran’s economic growth was considerable before the late 1970s. In those days they were primarily an agricultural society but this has started to change in the 70s because of increased industrialization and other economical advances. However the economic growth which has been experience began to slow down during 1978 just before the revolution which followed in 1979. After this revolution some drastic reforms followed such as state control over the setting of prices and all other subsidies. There was also a division of the country after the new Constitution has been accepted which led to a division of the country into 3 sectors such as private, state and cooperate and during this dispensation the majority of businesses have become state owned property. Most parts of the industry had been nationalized which included all Iranian banks and other organizations. Most initiatives which were entered into by the government was controlled through central planning which included five years socioeconomic plans which was decided upon by Iran’s supreme leader, the president and the Majlis.

Long-term economic plans

After the revolution the primary objective of government was to ensure economic independence as well as comprehensive employment for everyone. The goal was to provide a comfortable standard of living for all Iranian citizens. Unfortunately by the time that the end of the 20th century was reached the country was faced with increasing economic problems. This problem was further escalated by the very high population growth which took place in the space of only 20 years. During this time the Iranian population has doubled and the average citizens were increasingly younger people. Traditionally Iranians have been primarily farmers but nevertheless agricultural production has been on the decrease since the 1960s. This has led to a situation where Iran has been forced to import large amounts of its food sources. Because of the increasing difficulties which were experienced in rural areas many people started to move to metropolitan areas.

The burden brought about by the war

The extended conflict which existed between Iraq and Iran over a period of eight years has led to a loss of life for over 300,000 Iranians while a further 500,000 Iranian soldiers had been severely injured. This has placed a very heavy burden on the Iranian economy and that has been calculated that the total cost of that war was at least US$500 billion. This necessitated a rebuilding process and some of the areas which needed special attention with transportation, healthcare, communication, manufacturing and the energy sectors. This included nuclear power facilities. There has been several attempts since 2004 when the supreme leader of Iran has tried to implement reforms that will lead to the total privatization of Iran but such attempts have not been successful to date. This had resulted in a situation where Iran are basically a command economy which are in a transition process towards becoming a market economy. It is expected that more severe transformation processes has to be implement before any real economic growth will become possible.



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