Discussing the 20-year outlook of the Iranian economy can be both easy and impossible. It is easy because the 20-Year Perspective Plan has delineated the path to be taken by the government and the nation over the next 20 years, ending in 2025. Therefore, it helps to immunize the overall process of political, social, economic and cultural development of the country against changes in state managers and the diversity of ideas.
On the other hand, domestic developments in the past year and the body of strategies and positions adopted by the government and the Islamic Consultative Assembly have raised concerns among economic experts as to the realization of the long-term objectives of the 20-Year Perspective Plan. The previous government provided suitable grounds for the formulation of this important document, which was later ratified by the Expediency Council and approved up by the Supreme Leader.
Requirements and prerequisites for the realization of the Plan"s goals were discussed in the first annual roundtable of the Industry and Development Monthly. In that roundtable, Bijan Namdar Zangeneh, former Minister of Petroleum criticized non-compliance of some ongoing trends in the country with the 20-Year Perspective Plan and talked about the necessity of realizing the plan"s major objectives.
Dr. Seyed Safdar Hosseini, former Minister of Economic Affairs and Finance talked about the details of 20-Year Perspective Plan and the reasons behind its formulation. Another guest was Dr. Alinaqi Mashayekhi, a faculty member at Sharif University of Technology, who discussed the 20-Year Perspective Plan and its necessity.
The session was held last fall at the monthly"s office and was managed by Ahmad-Doust-Hosseini, the Former Deputy Minister of Industries and Mines.
Formulating the Plan: Zangeneh began the discussion by pointing out that the issue of the Perspective Plan was raised about three years ago. It was first discussed at the Expediency Council in 1380 (2001-02) or early 1381. It was decided that the Perspective Plan should be relative and dynamic as well as reflective since regional developments could not be ignored. He further discussed the formulation of the plan as having measurable goals rather than delineating quantitative goals. The experiences of other countries that have formulated Perspective Plans including
Such discussions were carried out at the Expediency Council and paralleled discussions on the Fourth Economic Development Plan. Zangeneh pointed out that it was decided to have a Perspective Plan as a general framework for the Fourth Economic Development Plan. The government spent a lot of time analyzing it and the issue was discussed in special commissions and a document was drawn up as the government"s early proposal to be considered by the Expediency Council. The Council worked on it and drew up the plan"s text. The text was discussed at the Expediency Council once more and was approved. The Supreme Leader then ratified it after slight changes and is now the upstream documents for the Fourth Economic Development Plan.
After discussing the process which led to the formulation of the plan, the former Minister of Petroleum highlighted the main points within the plan. Overall the plan calls for Iran to be the number one regional power in economic, scientific and technological terms. The 20-Year Perspective Plan starts with the following quote: "Iran is a developed country ranking the first in economic, scientific and technological terms in the region; enjoying an Islamic and revolutionary identity; inspiring the world of Islam; while constructively and effectively interacting with international community." Then it defines major areas neighboring Iran including the Caucasus, Central Asia, and the Middle East. At that time, we reached the conclusion that the plan"s goals are achievable. This is a document for the country"s progress, which is accepted by both the political and theoretical elite of the Iranian society. Zangeneh mentioned that "we have drawn upon various viewpoints to formulate it. The final text contains measurable goals. The realization of the 20-Year Perspective Plan calls for national unity." Moreover, all authorities including the Supreme Leader have accepted the plan which indeed establishes a mutual relationship between the nation and the Supreme Leader.
The Supreme Leader has added that due attention should be paid to quantitative goals such as increasing investment rate, per capital income, gross domestic product, and employment rate; reducing the divide between high and low deciles of the society; as well as promoting culture, education, and defense capabilities in proportion to development policies. Zangeneh further mentioned that "an efficient mechanism has been envisaged to direct the country toward the plan"s goals. This is a lofty goal, which is also the aspiration of our people. Our nation wants to be the first economic, scientific, and technological power in the region."
The Dimensions of the Plan: The next speaker at the roundtable discussion, former Minister Doust-Hosseini, stated that the Perspective Plan is a national aspiration which has been born out of differing viewpoints in society through a relatively lengthy process. Thus, all the prerequisite steps should be taken in order to pave the way for the realization of the plan"s goals. Fortunately, the economic section of the plan contains measurement and assessment indexes.
Another speaker, Mashayekhi mentioned that the 20-Year Perspective Plan delineates a vision. In fact, "we are providing a sketch of the future and we must think of ways to put our ideas into action. The desirable future does not come about simultaneously, but we must be active to bring it about. I think that the Perspective Plan has been formulated in a suitable manner." The document, according to the speaker, should help the country rise to higher levels. One of the benefits of the Perspective Plan is that it is a prerequisite for formulating strategies. When formulating a strategy, we must see where it is taking us. He further mentioned that "achieving one"s goals is not possible in the absence of a consolidated strategy. The Perspective Plan provides that strategy and directs the country toward a desirable future." However, this depends on two conditions that the speaker put forth. Firstly, the Perspective Plan should be understood by decision-makers. Secondly, there needs to be belief in the plan. Therefore, the entities that will implement the plan should contribute to its development.
The speakers emphasized the need for a shared vision in order for the plan to be effective. Zangeneh explained about the role of government, the Expediency Council and various experts who were involved in formulation of the perspective. We must find ways to transfer their understanding of the plan to new executives. The viewpoints of executive managers as well as the Islamic Consultative Assembly are very important. Usually, "different plans are made to achieve long-term goals. The Perspective Plan connects those plans to pave the way for the realization of the said goals. This is the main advantage of the 20-Year Perspective Plan. Perspective Plan is a tool for leadership."
Doust-Hosseini also explained that "we have agreed that the 20-Year Perspective Plan is not a document showing future outlooks on the basis of past experiences, but it is a roadmap for the future on the basis of historical capacities of the society." Moreover, a prerequisite for the realization of the plan is good leadership in the society and one of the most important responsibilities is good management of the society. Interest in the Perspective Plan should not be limited to policymakers and state authorities, but should also include the public. He pointed out that the media plays a great role in this regard helping to promote public understanding. "We should know what criteria we can set to see that the public interest has always been there," he added. Understanding the needs and demands of the public is an important step for high-ranking policymakers and a necessary criterion that should be established.
The former Minister also highlighted the plan"s duration and mentioned that many managers will be changed in that period of time. "I think there are two important factors for the realization of the Perspective Plan: firstly, all people should expect managers to pursue those goals, and secondly, those managers should show enough perseverance to follow up the goals of the plan. We do not have to wait 20 years to see whether we have realized the 20-Year Perspective Plan"s goals or not. We can make annual measurements." The next step is to understand the criteria needed to meet the 20-Year Perspective Plan"s objectives.
Achieving the Goals: "Economic development is a cultural affair, which will not be meaningful as long as it has not been accepted by people," according to Zangeneh. The Perspective Plan is not a state-run affair; rather it"s a national one. Thus, its implementation hinges on the evolution of a national understanding. That understanding starts among the elite and should spread down to ordinary people. Therefore, the first requirement is nationalization of the plan, which has been largely ignored.
In this light, Zangeneh criticized the state television for not paying due attention to this issue. He questioned in what part of the country it has been explained and which state official talks about the perspective" The plan should be "discussed in the society and should even be taught. The textbooks should contain something on it since the beginning of education. This is not a responsibility for the government, but should be done through a national will. It should be followed by a national effort. Everybody should do its part. The Perspective Plan ensures future prosperity of Iran." Moreover, he mentioned that one of the main goals of the Perspective Plan is to show that we are proud of being Iranians. Therefore, there should be more emphasis on this from the educational sector as well. "I don"t think that our educational system has been attuned to the perspective"s objectives. Therefore, our graduates may not be able to create comparative advantage for us. I think we must work to realize the perspective"s goals. We must strictly observe our responsibility for the realization of the plan"s goals. That is, if we take all cultural steps, but officials fail to observe their responsibility, the goals of the plan will not be achieved."
A major point regarding the Perspective Plan is speedy economic growth rate. Of that rate slows down, it shows that we are not complying with the plan. "If we are to be the most powerful regional country in economic terms, we must first achieve an economic growth rate of 8 percent for the whole period of 20 years." Currently, all OPEC members enjoy a growth rate of 4.5-5 percent. Zangeneh confirmed that "if our country"s rate outstrips that figure, we will be moving in the direction of the plan." He also emphasized the need for economic security which is important for achieving the goals of the 20-year Perspective Plan.
He also mentioned that in order for the plan to succeed, the country needs to enjoy a suitable political and social atmosphere. Only then will investors be about the security of their investment. In this light, Zangeneh believes that the country must go through a "period of detente and embark on establishing friendly relations with neighboring countries, since a country that intends to be rapidly progressing, will need capital and foreign resources as well as foreign technology." Therefore, to achieve enough foreign finance and capital as well as foreign technology and access to foreign markets to sell our products, Iran must also engage in friendly interactions. He also mentioned that bilateral trade should be established and that economic policies should be engineered in such a way as to bolster the private sector.
The former Petroleum Minister also discussed the importance of oil as a factor behind the plan. "No economic or political discussion in Iran could be complete without due attention to crude oil resources," he mentioned. Given the centrality of this natural resource to the country"s economy, there is a need to reshape our approach to oil and to consider it as a non-renewable resource for the next generations. He warned that "if we do not correct the existing erroneous approach, we would neither establish a competitive economy, nor promote the private sector. Everything will become limited to oil and its subsequent economic rent." He highlighted the Oil Stabilization Fund as a positive step but believed that it has recently been "treated as a bank account." Yet, in order to achieve the goals of the plan, the government needs to decrease its reliance on oil by 10 per cent a year and oil revenue must be used as a catalyst for rapid economic growth and investment.
Safdar Hosseini also highlighted the Perspective Plan"s four salient features: it covers a specific period of time, it is feasible and can be implemented, it is inciting, and it calls for the participation of the whole society. The Perspective Plan plays "an effective and leading role in the country"s development plans and in view of the plan"s provisions, it is not impossible for Iran to rank the first in the region." He also stated that the realization of the Perspective Plan"s goals requires a transition from a state-run oil-dependent economy. Further more, the speaker discussed the requirements needed for the implementation of the plan which ranged from accepting ownership laws and other judicial legislations to achieving stable foreign relations. "Our domestic policies should aim to create competition, and should provide good grounds for competition and pave the way for promotion of business." Moreover, achieving the Plan"s goals will require enhanced productivity. He examined this issue by saying that "another requirement which is an obligation and can be called a national jihad is uplifting productivity since our country"s productivity is very low. We cannot achieve the 20-Year Perspective Plan"s goals with such a low productivity." Fortunately, the perspective has predicted that we must realize 30-33 percent of the projected economic growth by raising productivity. Achieving that level of productivity requires preconditions. If we comply with those requirements, we would be able to go on with knowledge-based growth and establish constructive relations with global economy while promoting competitiveness as well as human and social security.
Mashayekhi also discussed the importance of making all decisions, whether judicial or economic, within the framework of the 20-Year Perspective Plan and its objectives. Only, then will there be a national will and determination to push through with the requirements highlighted before. He mentioned that "decision-making is an ongoing process which aims to achieve the Perspective Plan"s goals." Only when those goals are "believed" in higher levels, will they be taken up by lower levels of management and the private sector. Therefore, "a dynamic current should make the society believe in the whole plan." Such an understanding doesn"t currently exist. Thus, "the government should move first toward the goals of the Perspective Plan in order for the people to believe that the government is moving the society in that direction."
In another part of his remarks, Mashayekhi mentioned that realizing 20-Year Perspective Plan"s goals is quite possible because it has been experienced in other countries and they have experienced higher than 8 percent growth rates for two or three decades. "We enjoy a lot of potentials, which have remained untapped," he added. Naturally, it will be a difficult road ahead for the country if it wishes to achieve those goals. He also called for a new approach to issues and stated that "we must mend our ways in foreign relations, economic policies, investment, as well as management of the country"s affairs based on human knowledge and modern experiences. The management of human resources and promoting domestic management is another key issue. Management plays a great role in regulating our relations with the rest of the world and increasing productivity as well as in making correct decision that would be different from the past. This is true both for the state-run and the private sector. "In our country, the government provides suitable grounds for economic activities by the private sector. Management of the state-run sector should be promoted followed by private sector"s management."
The roundtable focused on the 20-year Perspective Plan since it delineates the Islamic Republic of Iran"s economic outlook for the next two decades. It is the most important dialogue between the Iranian nation and its critics. The speakers called on the Plan to be clearly promoted within the society since the plan reflects the aspirations of the Iranian nation for a period of 20 years. Only time will tell whether or not the country will achieve the goals it has set out.
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