It was during the year 1333 of the solar calendar when “Abolhasan Ehtehaj” was appointed as the head of the Organization for Planning and Budget of the country. Six years had passed since the establishment of this organization and the implementation of the first development plan. At the beginning of his tenure, he established two economic and technical offices in the organization. In order to provide the necessary resources for the activities of these offices, he sought help from the implementers of the “Truman Doctrine” in America. This program was approved to provide financial and advisory assistance to developing countries. One of the requirements of this law was to hire American experts in the target country. In this regard, Ehtehaj took the initiative to sign a contract with the “Ford Foundation” and, upon the recommendation of the foundation, a group of “Harvard University consultants” were introduced to work in the economic office of the organization.

These advisors were actually economists who came to Iran in 1337 to help with the development of the country’s third comprehensive development plan, known as the first comprehensive development plan. However, due to dissatisfaction with the prevailing environment of planning in Iran and lack of confidence in the effectiveness of their scientific and technical efforts, they left Iran before the end of their contract in 1341.

Development planning and implementation is one of the outcomes of the post-World War II era, when the wave of decolonization began among the wealthy European countries. These countries, alongside other countries classified as the “Third World,” embarked on implementing development programs to combat poverty and widespread economic weaknesses.

In Iran, one of the first development programs during the second Pahlavi era was implemented under the name “White Revolution of the Shah and Homeland”, which included fundamental reforms in important sectors of the economy and social relations.

After the revolution, the implementation of the first five-year development plan began in 1368 (1989) and shortly after the end of the war. The first plan was from 1368 (1989) to 1372 (1993), the second plan from 1373 (1994) to 1377 (1998), the third plan from 1378 (1999) to 1382 (2003), the fourth plan from 1383 (2004) to 1387 (2008), the fifth plan from 1390 (2011) to 1394 (2015), and the sixth plan from 1396 (2017) to 1400 (2021).

According to the head of the Parliamentary Research Center, an average of about 35 percent of the goals of Iran’s development programs have been achieved. According to Mohammad Bagher Ghalibaf, the head of the parliament, the third, fourth, fifth, and sixth programs have been achieved between 25 to 30 percent. In his opinion, this level of achievement means that if the work was left alone, 25 percent of the goals would be achieved automatically. (1)

Program 7: Confused and Dreamy.

The thirteenth government came into power with grand promises, but numerous failures in fulfilling those promises have caused even its supporters to feel disillusioned with the current situation. Some of the government’s promises and plans have turned out to be nothing more than a facade. For example, instead of addressing the current issues, the government presents unattainable plans.

The seventh program is also a program that has been hastily prepared. Of course, previous programs have not been very successful and only 30% of the sixth program has been achieved; but the question is, if the programs are not going to be achieved, why are they being developed in the first place?

After three years of delay, finally on the eighth of Khordad 1402, the government spokesperson announced the approval of the seventh development plan in an extraordinary meeting of the Council of Ministers. This is while according to the law, this plan should have been approved in 1400 and immediately implemented after the end of the sixth plan.

This program, like other actions of the government of Ebrahim Raisi, has been met with strong reactions and some of its provisions have led to the release of statements and even street protests. Critics have used terms such as “confusing program”, “unproductive”, “inequality-promoting”, and “utopian” to describe it. Hojjat Mirzaei, the deputy for economic affairs of the Minister of Cooperatives, Labor, and Social Welfare in Hassan Rouhani’s government, has stated that this text, as a development document, lacks any of the primary characteristics of a program document, namely “targeting, rationality, and multi-dimensional legitimacy.” (2) Morteza Afghah, a member of the faculty at Shahid Chamran University of Ahvaz, also said: “Unfortunately, we are in a situation where predicting the economic situation in the next six months has become impossible for experts and economic activists; how can you achieve the goals of this

This five-year program is the fourth section of the 20-year Vision Document of Iran and has been formulated for the five-year period from 2023 to 2027. It consists of 22 chapters and 7 sections: “Economic”, “Infrastructure”, “Cultural and Social”, “Scientific, Technological and Educational”, “Foreign Policy”, “Defense and Security” and “Administrative, Legal and Judicial”. The key topics of this document include economic stability, controlling inflation, equitable economic growth with a focus on increasing productivity, food security, pension funds and social security, and integrated management of water resources and consumption. These are the achievable goals that have been set.

For the seventh program, various goals have been considered, some of which are annual and the rest are for the end of the five-year period.

The most important number that has received attention is the 8% economic growth rate, 9.5% inflation rate, and 3.5% employment growth. The reason for this attention is the difficulty in achieving these goals. For example, according to this plan, reaching an 8% growth rate requires 60,234 billion tomans of domestic and foreign investment. However, the International Monetary Fund has predicted a negative economic growth trend for Iran and has reduced its forecast from 2.5% to 2% in its latest report, contrary to last year’s prediction. Although recent increases in oil production and sales, which were obtained through implicit agreement with the United States, may improve these speculations to some extent, achieving the goals of the seventh plan seems to be exaggerated. Furthermore, in the sixth development plan, ambitious goals such as 8% growth in the agricultural sector, 7% for oil, 8.8% for mining, 9.3%

Hossein Rajabpour, an economic researcher, said in a speech about this program: “In 1396, it was announced that for an 8% economic growth, we need $240 billion – meaning an annual investment of about $55 billion in foreign investment – and this year, they have also considered the same amount. This is while in the best conditions, about $5 billion of foreign investment enters Iran annually.” In addition, in 1395, when economic growth reached over 12%, it was due to the signing of the JCPOA and the growth of oil exports, and it did not last for more than a year. The Planning and Budget Organization presented a prediction of Iran’s economic situation until 1406, in which it explicitly stated that in normal conditions, economic growth would be 3%, and in the case of continued sanctions, it would be negative. In the seventh program, it is stated that the gross capital formation rate should reach 22.

In fact, when poverty spreads in society and investors have no hope for the future of Iran’s economy, the level of net capital formation decreases. Net capital formation simply means an increase in investment in major sectors such as industrial production, construction, and infrastructure, which is a symbol of economic optimism or pessimism.

In 1390, the capital formation was around 850 trillion rials. At the beginning of last year, it was announced that the fixed capital formation was 317 trillion rials, but by the end of autumn, it reached 224 trillion rials. The government announced that in the winter of 1400, based on the 1395 base price, the fixed capital formation had a growth of seven and seven-tenths percent, but by the end of Azar 1401, it reached close to negative 60 percent. However, the authors of the seventh program are hopeful that by the end of 1406, with an 83 percent change, the fixed capital formation will reach close to 23 percent.

Wishing for a 9.5% inflation rate.

The seventh program aims to achieve a 9.5% inflation rate and a 3.5% employment growth after five years.

According to data from the Statistical Center of Iran, inflation reached 55.5% in the month of Farvardin, which was an increase compared to the previous month of Esfand last year. Institutions such as the Parliamentary Research Center and the Sharif University of Technology Business School consider the inflation rate for 1402 to be between 50-55%, and do not see a positive outlook for its reduction. Additionally, the annual or twelve-month inflation rate has been estimated to be close to 48% in the first month of this year. Inflation in Iran has many factors, including a 32% increase in money supply, a budget deficit of several hundred billion tomans, and sanctions.

Currently, economic data shows that the growth rate of liquidity does not have any signs of starting a downward trend and reaching below 30% due to the imbalance of banks. According to the report of the Director General of the Office of Banking and Insurance Affairs of the Ministry of Economy of Iran, in the first three months of this year, approximately three trillion tomans of liquidity was produced daily and the inflation rate was also around 40% during this period. Therefore, the claim of reducing the inflation rate to 9.5% seems very difficult. This is while in the past four decades, the average inflation rate has been in the double digits and only one year, after the signing of the JCPOA, it became single digits; but it did not last. The Planning and Budget Organization has predicted a 25% inflation rate for the year 1406 in the best conditions and in case of sanctions, it has announced a 65% inflation rate.

In addition, in the seventh development plan, there is talk of creating one million jobs per year, but according to reports from the Statistical Center, it has faced criticism. The reason for these criticisms is the government’s failure to fulfill its promises of creating one million jobs in the past two years. The Statistical Center of Iran has reported that in 2022, approximately two and a half million people have been added to the ranks of the unemployed, which is a new record. According to the same report, in the winter of 2022, the unemployment rate for individuals over 15 years old was about 10%. The economic news website, Eghtesad News, reported in April of this year that nearly 14% of men who were employed in the winter of 2021, lost their jobs in the winter of 2022.

Housing and retirement in the seventh program.

Housing is one of the major challenges of the thirteenth government. This government had promised to build at least one million homes per year. This challenge is also being discussed for the seventh program.

According to the recent report of the Parliamentary Research Center, the sixth development plan, in practice, did not provide the necessary budget for this sector and ultimately none of the projects were fully implemented. Based on the sixth development plan, the government was obligated to develop a supportive housing program with the goal of assisting in the construction and purchase of private and social housing, supporting rental housing construction, paying rental assistance, and providing interest-free loans and housing deposits for low-income groups.

In the seventh development program, it has been established that the Ministry of Roads and Urban Development is authorized to offer up to a 40% discount on the assessed value of new units or land in exchange for old and dilapidated units in order to encourage owners to participate in the revitalization of deteriorating areas. This can be done through a direct exchange of units or land, or by pricing residential units or land in deteriorating areas at up to 40% higher than the assessed value.

The sixth program was also designed with these claims, but according to the research arm of the parliament, housing inflation has grown by 247%. The price of each square meter of housing in Tehran in Azar month of 1401 (compared to the same month in the past five years, Azar 1396) has increased by more than 844% and in total, for urban households across the country, it has increased by about 403%.

One of the most challenging parts of the seventh development program is the topic of retirement and pension funds.

According to the seventh development plan, it is planned that over a period of five years and gradually, the retirement age will increase by two and a half years. The reason for this increase is due to the financial deficit of pension funds to pay for pensions. The Technical Committee for the Pursuit of the Claims of National and Military Retirees has protested against the addition of two and a half years to the retirement age at the end of the seventh plan, stating that it is against Iranian labor laws.

On the other hand, critics of the seventh program in the field of social security have said that this program does not mention the government’s debts to the Social Security Organization. Although in section 4 of the general policies of social security, the necessity of preventing the creation of new government debts to funds, especially the Social Security Fund, is mentioned, it is not enough.

“Modern Servitude” in the style of the seventh program.

The labor sections in the seventh program were met with strong reactions from labor unions and even politicians.

In Article 15 of the Seventh Development Plan, the employer is allowed to pay at least half of the salary for the first three years of employment, and the insurance deductions should be based on this amount. In addition, the employer has the right to terminate the contract of the individual.

Article 16 goes even further and aims to “strengthen the motivation of businesses to attract applicants for employment under the coverage of welfare, charity, or related to prison organizations.” Contracts with this group of individuals will be provided with payments lower than the minimum wage. This is while clauses 1 and 2 of Article 41 of the Labor Law emphasize that the minimum wage should be determined based on the inflation rate and the cost of living for a working household. Mohammad Javad Azari Jahromi, the Minister of Communications of Hassan Rouhani’s government, has reacted to this section and written on his Telegram channel, “Master-slave system? I hope they do not follow the system of slavery with this tendency towards self-promotion.” Hossein Habibi, a member of the Coordination Council of the Islamic Labor Council of Tehran, has also commented on the Seventh Development Plan Bill, saying, “There are anti-labor provisions in this plan that, if implemented, will worsen the

Furthermore, according to the seventh development plan, beneficiaries, members of the relief and welfare committee receive salaries on a floating basis and based on an agreement with the employer. (4).

Criticism of certain parts of the Seventh Development Plan and its anti-labor approach has led to the government removing the controversial provisions. However, it has been reported through the halls of parliament that the Commission for the Integration of the Seventh Development Plan has proposed adding these provisions in their own report. In Article 16 of this commission’s supplementary report, it states: “In order to promote the master-apprentice system and improve vocational training, businesses and trades with a maximum of four insured employees by the end of Shahrivar 1402, can hire up to four employees with a negotiated salary and without the obligation to pay unemployment and retirement insurance, and only pay for health insurance in case of work-related injuries. The employment of individuals under this article is limited to a maximum of two years per person and is subject to maintaining the number of insured employees by the business or trade at the time of the implementation of this provision.”

Or even suggestions have been made to increase the retirement age, which seems to not be related to the financial crises of retirement funds and is aimed at postponing problems in finding solutions.

Lessons from an Unsuccessful Experience.

Revisiting historical experiences has valuable lessons for statesmen, planners, and society as a whole. After the departure of the “Harvard Consultants Group” from Iran, the members of this group wrote several books and articles on the unsuccessful experience of planning in Iran.

As an example, “Tiji Marinos” writes in articles titled “Environmental Planning in Iran”: “The Harvard Consulting Group was primarily composed of economists, while it should be noted that developing countries cannot rely solely on economic theories for development; because these theories – even the most accurate ones – will be impractical and inadequate when applied to traditional societies.”

In other examples, “Fangar” writes in the article “Administrative Framework of Planning System in Iran”: “Accountability for administrative behavior has no place in Iran. This phenomenon is natural in Iranian government organizations where employees neglect their assigned tasks and no one punishes them. It is rare for employees to be asked to actually work overtime; even if delays in work are due to their own laziness. This issue goes back to the cultural atmosphere in Iran; the special etiquette and courtesy of traditional Iranian society does not allow for employees to be clearly reprimanded… Another factor is that the belief has been ingrained in Iranians that career advancement has no connection to one’s work performance.”

Another example of this type of opinions is mentioned in the book “Planning in Iran” written by “McLeod”, another member of the Harvard Consulting Group, who says: “The administrative system is a tool for implementing economic policies and any flaws or weaknesses in it will hinder the realization of policies. He compares the financial discipline situation in 1340 (1961) with the Constitutional period and the presence of Morgan Shuster to reform the administrative organization of the Ministry of Finance during the Constitutional period (in 1298, 1919) and is surprised that no changes have been made in the content and only the name of the Ministry of Finance has been changed to the Ministry of Treasury.” He also expresses surprise at the multiple overlapping responsibilities between decision-making institutions. For example, he compares the responsibilities of the Supreme Economic Council with the Money and Credit Council and the interference of their responsibilities with other ministries as one of the serious obstacles to decision-making and policy implementation. He writes: “In Iran,

Now on the verge of approving the country’s seventh development plan and after more than 60 years of the presence of Harvard consultants in Iran, the same cycle continues and the political, administrative, economic, and social atmosphere of Iran is still suffering from the same chronic pains.

Buttocks.

According to most experts, the best method for planning in Iran is to focus on annual budget plans. Iran is facing numerous internal problems, sanctions, and international issues, so setting five-year targets does not seem feasible and the Seventh Development Plan is an example of this.

The development program must have the ability to predict the next 5 years. The instability of the country’s oil sales, budget, and GDP on one hand, and the volume of the country’s expenses and inflation on the other hand, cannot even be predicted for the next six months; we do not even know where the negotiations on the JCPOA will lead, and if they do, how much will the prices of oil, gold, currency, etc. be.

It is better to focus on short-term planning based on this. The government is a major consumer and even the annual budget is revised and reviewed every year; so how can we expect the 5-year plan to be successful?

The implementation of the Truman Doctrine in Iran left some lasting effects, including a five-year plan and structural changes in administrative, employment, and budgetary organizations. Interestingly, the tradition of five-year plans is not practiced in the United States itself, and the development system of that country follows biennial plans, known as “two-term presidency, two plans.” It should be noted that the United States is very inclined towards the “pragmatism” school in its planning system. This school is essentially a method of balancing between ideals and actions, and its underlying pragmatism will lead to one or more strategic plans with a coherent vision and mission.

Unfortunately, the current government believes in a “command economy”. This is neither acceptable nor achievable. A dynamic economy cannot be created by giving orders.

In the introduction section of the seventh development program, it is mentioned that previous programs did not have an acceptable level of executive power, but the current program has been thoroughly studied and has executive power. These statements are made in a situation where, by looking at the numbers mentioned in the seventh program, we realize that many parts of the program do not have much executive power.

Unrealistic promises, which are made by the government – who are the people – are causing the collapse of the social capital. Some of the numbers mentioned in this program are so far from reality that even someone without specialized education can recognize the impossibility of implementing these numbers. Even if the sanctions are lifted, the issue of FATF must also be resolved in order to improve commercial transactions.

Assuming these problems are solved, we need a professional economic team to address the existing problems. In the years before 1997, when we were not faced with this level of sanctions, we did not have a high success rate in our plans; let alone the current situation.

Our problem is the numerous obstacles in the way of production, producers, exports, and imports. In a successful development program, there must be harmony between tools and goals. This is the missing link that we do not have.

من به دنبال یک ماشین جدید هستم

I am looking for a new car.

Notes:

1- We did not interfere in the execution, the development program was achieved more, Mehr News Agency, 26 December 2022.

2- Programs for visualization or development, Shargh newspaper, 21 Tir month 1402.

3- The performance of the laws of the sixth five-year development plan in the field of providing housing for low-income groups, the Parliament’s Research Center, 30 Ordibehesht 1402.

4- Anti-Unemployment Bill of the Seventh Development Plan; A Sword Against the Dignity of Workers, Iran Wire, 15 Khordad 1402.

5- Twenty problems of planning in Iran or why the Harvard consultants left Iran, ILNA news agency, 27 Azar 1399.