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The economy of Iran is a Transition Economy where a continuing strong Labour Force growth unmatched by commensurate real economic growth is driving up Unemployment to a level considerably higher than the official estimate of 11%. According to experts, annual Economic Growth above five per cent would be needed to keep pace with the 900,000 new labour force entrants each year. Government Spending as percent of total budget was 6% for Health Care , 16% for Education and 8% for the Military in the period 1992-2000 and contributed to an average annual Inflation rate of 14 percent in the period 2000-2004, although some unofficial estimates place the figure above 20 percent today.1 Iranian Budget Deficits have been a chronic problem, in part due to large-scale State Subsidies totaling more than $40 billion per year (2006), including foodstuffs and especially Gasoline .2 The Government is attempting to diversify away from Oil by investing revenues in other areas of the economy, including, Car Manufacturing , Aerospace industries, consumer Electronics , Petrochemicals and Nuclear Technology . Also, Iran has a great potential for development in Mining , Tourism 3, Information And Communication Technology (ICT). HISTORY was estimated at $610 billion at PPP ($8,900 Per Capita ). The Informal Economy is also important. Because of these figures and the country’s diversified but small industrial base, the United Nations classifies Iran's economy as semideveloped.]] Pre-revolutionary Iran 's economic development was rapid. Traditionally an agricultural society, by the 1970s , Iran had achieved significant industrialization and economic modernization. However, the pace of growth had slowed dramatically by 1978 , just before the Islamic Revolution . Iran 's long-term objectives since the 1979 revolution have been Economic Independence , full employment, and a comfortable standard of living for its citizens, but at the end of the 20th century the country's economic future was lined with obstacles. Iran's Population more than doubled in that period, and its population grew increasingly young. In a country that has traditionally been both rural and agrarian, agricultural production has fallen consistently since the 1960s (by the late 1990s Iran was a major food importer), and economic hardship in the countryside has driven vast numbers of people to migrate to the largest cities. The rates of both Literacy And Life Expectancy In Iran are high for the region, but so, too, is the unemployment rate, and inflation is regularly in the range of 20 percent annually. Iran remains highly dependent on its one major industry, the extraction of Petroleum and Natural Gas for export, and the government faces increasing difficulty in providing opportunities for a younger, better-educated Workforce , which has led to a growing sense of frustration among lower- and Middle-class Iranians . After the end of Hostilities With Iraq in 1988 , the government has tried to develop the country's Communication , Transportation , manufacturing, energy infrastructures (including its prospective Nuclear Power Facilities ) and Hospitals & Schools and has begun the process of integrating its communication and transportation systems with those of neighbouring states.4 CENTRALISATION VS. PRIVATIZATION See Also: Privatization in Iran See Also: List of Major Iranian Companies The Iranian Government declared its intention to privatize most state industries after the Iran-Iraq War in 1988, in an effort to stimulate the ailing economy. The sale of state-owned factories and companies proceeded slowly, however (mostly because of the opposition by a majority of nationalists in ''Majlis'' ), and most industries remained state-owned in the early 21st century (70% of the economy as of 2006). The majority of heavy industry—including Steel , Petrochemicals , Copper , Automobiles , and Machine Tools —was in the public sector, while most light industry was privately owned. various sectors and open its economy to the world.]] According to the article 44 of , and private; and is to be based on systematic and sound Planning .
A strict interpretation of the above has never been enforced in the Islamic Republic and the private sector has been able to play a much larger role than is outlined in the Constitution. In recent years, the role of the private sector has been further on the increase. Furthermore, an Amendment of the article in 2004 has allowed 80 percent of state assets to be Privatize d.5 FIVE-YEAR ECONOMIC DEVELOPMENT PLAN (2005-10) See Also: Management and Planning Organisation of Iran Government of Iran Constitution of Iran The Fourth ''Five-Year Economic Development Plan '' (2005-10) sets the guidelines and points the direction in which the trade sector will be taking over the next five years. In it, the focus will be on expanding trade interaction with the global community and pursuing an active presence in international markets. To achieve this would require raising Exports substantially. Another area of focus will be to develop Free Trade Zones and turning them into gateways to International Markets .6 |
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