| |
Iranians struggle just to get
by
By Syed Saleem Shahzad
 TEHRAN - As a place to do business or invest,
the Islamic Republic of Iran offers several advantages -
a solid base of infrastructure, natural resources and
the physical facilities needed for trade. But there are
also serious disadvantages, the most serious being an
over-reliance on dogmatic and introverted economic
policies that subvert the business environment and erect
barriers where there should be welcome mats.
These contradictions are a source of both
economic stagnancy and social and political
complexities. Seemingly the only beneficiaries of these
closed and backward economic policies are the
unscrupulous elements of the bureaucracy who profit from
backdoor corruption. More important, the closed-off
nature of the Iranian economy has the effect of spoiling
any chance that Iran might have of entering the new
global economy.
Iran undoubtedly has one of the
most civilized urban systems in the world, with low
crime, a good literacy rate, a computerized and
well-documented economy and good roads and highways. The
Iranian cities of Tehran, Esfahan and Shiraz can be
compared to any European city, including London and
Frankfurt, as far as natural beauty and municipal and
communication networks are concerned.
However,
the conservative and restrained Iranian policies impede
the ability of this system to translate prosperity to
the general public. The fact that the benefits of the
system fail to trickle down to the public is one of the
prime cause of cynicism and disappointment with the
government among the masses.
At 3.6 million
barrels per day, Iran is the second-largest oil exporter
in the Organization of Petroleum Exporting Countries.
But as the entire economy is monopolized, and most
enterprises are under state control, too many government
resources are spent in the management of these
organizations, with political considerations trumping
the commercial in decision-making and hiring.
For instance, the power sector is in state
control. The government produces electricity at higher
rates, sells it at lower rates, and the difference is
subsidized by the exchequer. At the same time, the power
sector companies open the door of employment on the
recommendations of higher political offices. These
unrealistic approaches cost power sector companies
heavily. They do not have funds to renovate their aging
plants and transmission and distribution systems. The
loss of electricity due to technical leakages stands at
25 percent.
At a time when the power sector is
on the verge of financial failure in Iran, the
government has decided to make an attempt at
privatization - but only those power plants that are
already outdated, specifically, the Zarand, Chabahar,
Khoy Zargan, Zanbaq and Sofian plants. The money
acquired from the sale of these plants is intended to be
spend on the construction of new power plants.
Iran's Third Economic Development Plan (2000-05)
empowers the energy ministry to construct new power
plants through Build, Operate and Transfer and Build,
Operate and Own deals with private domestic investors,
public-private cooperatives and foreign investors. At
present, the Rodshor and Shahroud gas power plants,
which have capacities of 2,000 MW and 500 MW
respectively, are under the process of negotiation to
hand over to private companies.
"These are some
of the steps that were decided by the Iranian government
in principle. But the pace of progress in the
implementation of the plans is so slow and full of
bottlenecks that the process has failed to deliver the
required results to the people. A a result, frustration
among the public is growing," said a foreign financial
expert in Tehran.
"From 1991 to 2000, different
government ministries ceded shares worth only rials 110
billion (US$13.7 million) to the private sector. The
current year's budget law dictates that state-run
companies' shares worth rials 12,000 billion should be
ceded to the private sector by year's end, of which
rials 1,300 billion have been realized. These facts
clearly show a reluctance by Iranians to give up
enterprises to foreign investors. The private Iranian
investor does not have that kind of money to buy these
organizations, while Iranian expatriates are still
indecisive on whether to come back to Iran or not - they
are still not sure of stable economic policies in the
future.
"This kind of progress does not make any
difference, and only helps to maintain some status quo
in the political economy. That is the real agenda of
both conservative and reformists."
It is
policies like these that prevent the Iranian economy
from producing good chances for the public to enter the
competitive world economy through better production and
exports. As a result, all sectors of the Iranian economy
are at a standstill, and the economy is over-dependent
on oil exports and agriculture. High inflation in the
oil market and drought conditions over the past few
years have shaken the Iranian economy and caused
tremendous price increases. This situation has also had
a deep impact on politics and society.
The
general public in Iran lives under serious economic
repressive conditions. On average, the maximum wages of
a clerk are about $160 a month, and the salary package
for an executive in lower management is about $220 a
month. The rent for an ordinary house for a family,
though, is more than $200 a month in Tehran. Goat
cheese, nan (Iranian bread), and tea are
essential items for breakfast; mutton, chicken and red
beans for lunch and dinner. These days in Iran, cream
goat cheese is available at $0.37 per kg, mutton at $5
per kg, and chicken at $3 per kg.
To understand
how these high prices for essential foods affect the
daily life of an Iranian, consider the broader
perspective. Unlike in other Third World countries, the
people of Tehran - whether they live in Sher-I-Bala (the
northern part of the city) or Shehr-I-Paeen (the
southern part) have a set standard for their daily
lives. There is no slum area in Tehran, or in any other
Iranian city. All residents pay their utilities, which
are generally inexpensive. There are some essential
items - wall-to-wall carpeting, for example - which may
be either cheap or expensive, but which all Iranians
possess, whether they be high-paid executives or taxi
drivers. Also, Iranians are generally very well dressed;
whether attired in ordinary dress or expensive costumes,
they always go for a good match in color, coordination,
etc.
To manage this kind of living, one's salary
is insufficient. As a result, these days every member of
an Iranian family works. The government of President
Mohammad Khatami has allowed women to work. As a result,
in many travel agencies, banks and other offices, the
number of women sometimes exceed the number of men. What
is more, few people take taxis; preferring to use either
their personal cars or, if they don't own one, their
motorbikes. This is how an average Iranian makes two
ends meet.
Reza is an example in this regard. He
is a non-commissioned officer in the Iranian army and
receives a monthly salary of $215. He stands every
evening at a corner of Shehr-I-Bala with his private
car. He takes four passengers on different routes and
charges 65 US cents per person. "I hardly find a single
passenger who could afford to hire a cab for even $3 or
$4. Even my net earning stands at $30 to $40 a month
after subtracting fuel and maintenance cost. This is how
I run my household," Reza said.
The fact that
most Iranians have to go outside their salaries to make
ends meet has opened up an opportunity for unscrupulous
elements in the bureaucracy to manipulate government for
their own ends. The Iranian government has established
three Free Trade Zones (FTZs): Kish, Qeshm and Chabahar
Islands. These FTZs are managed according to special
laws and bylaws, being excluded from the laws of the
governing motherland. These zones are excluded from the
domain of the customs authorities and enjoy generally
the same trade freedoms, for both imports and exports,
found in FTZs elsewhere in the world.
However,
due to the strictness of the rules governing the import
of foreign goods to mainland Iran, these FTZs are the
main conduits for smuggling in the nexus of some corrupt
elements in the Iranian bureaucracy. This situation
manifests itself in Tehran's black market, where
foreign-made electronic items and video cassettes are
available in such abundance that shutting off the supply
would require a full-scale operation, not merely a few
raids. And the government fully understands that, at
this time, with the people under such economic pressure
to survive, any such step it tried would be politically
impossible.
(©2002 Asia Times Online Co, Ltd.
All rights reserved. Please contact content@atimes.com
for information on our sales and syndication policies,
or to submit a letter to the editor.)
|
| |
|
|
 |
|
