Economy, Government Role in the Economy
state industries, Iranian government, political elite, light industry, industrialization
Government planning plays an important role in Iran’s economy. Since the late 1940s the government has designed and implemented multiyear planning programs with the goal of industrial diversification. After the 1979 revolution, the government continued the industrialization that the shah had pursued but emphasized economic self-sufficiency, which required greater investment in agriculture. However, the flight abroad in 1978 and 1979 of most of the social and political elite, along with their capital (estimated at more than $28 billion), combined with the costly war with Iraq in the 1980s, left Iran’s economy severely damaged.
In the 1990s the Iranian government sought to privatize state industries to stimulate the ailing economy. In 1991 about 45 percent of large industry was government-owned. 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. That year the government announced plans to privatize 400 state-run factories; however, the actual sale of these companies proceeded slowly. A five-year development plan for the period from March 1995 to March 2000 calls for the creation of 2 million new jobs, primarily through stimulation of the private sector, especially industry.
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