Iran

1
Iran

• New Traditional Economy

2
Revolutionary Tradition

• Sunni / Shiite split
• In Iran Twelver Shiite law makers , revise.
  874 hidden imam. 1979 AK
• Shiite religious hierarchy zakat, khums
• Revolutionary attitude oppression, perpetual
  martyrdom.
• Economic laws in Iran under AK pro-market

3
History before revolution

• Persia -640 Muslim conquest
• Safavid dynasty 1505 Shah
• 1785 Qajar dynasty British and Russian conquest
  Reuters concession
• Pahlavi dynasty 1925 -1979 secularisation
• USA 1946 forced USSR out. 1963 White Revolution
• OPEC 1973 middle-class and student protest 1978
  revolution 1979.

4
Economic reform

• Post-revolution turmoil Vilayat-al-faqih
• Council of Guardians 12
• Economic Policy phases 5 identified
• Economic policy under Pahlavis revolution
  changed little new managers of oil economy.
  State-led development. 1944 indicative central
  planning. Land reform urban migration.
• Foreign trade

5
Nationalisation

• Post-revolution 2nd radical phase CoG
  Rafsanjani privatisation.
• Confiscations Mustaz Council
• June 1978 Banks insurance companies
• Islamic Constitution Dec 1979 mandate public
  control. CoG veto
• Compromise 1984

6
Reform of Land

• Confiscated, unclaimed , uncultivated
• 1980 limit farm size
• Mechanised farms
• Committee of 7 protests
• Urban land nationalised 1982
• Labour management co-operative. Worker councils
  not sustained

7
Banking

• Riba 2 phase implementation.
• Central Bank 1983 credit extension
• Business partners no deposit insurance
• Nationalisation mudarabah (profit-sharing)
• Private bank 2002

8
Distribution of Income

• Revolution driven by inequality
• Resurgence why?
• Educated v illiterate hypothesis
• Macro-economic imbalances Why?
• Table 17 3 inflation rate
• Current account deficit rial not devalued
• G share of GDP high 5Y plan 1995 -2000
  privatisation

9
Model New Traditional Economy??

• Reservations 1) Theocratic state following
  revolution. Comparison with Sunni. Khatami
  reforms.
• 2) Legacy of oppression and grievance
  redistributive. Other moderate models?
• 3) Internal contradictions in Iran