October 22, 2016


Does Rouhani want to scrap Iran's 5-year development plans? (Alireza Ramezani,  October 21, 2016, Al Monitor)

[M]any Iranian economists now believe that the era for such plans has ended and that governments instead need long-term strategic approaches toward growth and development.

"It is no longer the time of long-term comprehensive plans, which have concrete quantitative targets," leading economic newspaper Donya-e Eqtesad quoted Mousa Ghaninejad, a prominent economist in Tehran, as saying on Oct. 18. Ghaninejad believes that the current development plans, which he described as "useless," need to be replaced by "strategic road maps" that can depict clear frameworks for long-term financial, monetary and trade policies.

In this vein, Pedram Soltani, the deputy head of the Tehran Chamber of Commerce, also said there is a problem with the manner of planning in Iran, arguing that development plans have usually been the subject of radical change under various governments. "So far, administrations have used the development plans as an opportunity to make quick decisions without them needing to bargain with lawmakers. The parliament, on the other hand, has also seen the plans as an opportunity to keep administration officials committed to the laws they impose," Soltani said, as reported by the ISCA news website. Instead of preparing development plans, he noted, administrations have to follow a set of back-to-back strategies, so that governments will remain on the same track and avoid contradictory decisions. [...]

Despite the ongoing dispute over whether the sixth Five-Year Development Plan should include detailed economic policies, Rouhani has already signaled that he prefers strategies rather than quantitative targets. In his budget directive, the president urged the imposition of a budget-deficit cap, unification of foreign exchange rates, expansion of debt markets and avoidance of borrowing from the Central Bank as a solution to finance government development projects. These are all signs that there will be strategic reasoning behind the budgeting process, Ghaninejad noted. He added, "The time is now ripe for the government to propose a binding legal document that can replace the vain and costly five-year development plans."

Posted by at October 22, 2016 8:03 AM