By Safa Haeri

As the economic situation worsens in the Islamic Republic and the people's expectations grows as a result of the domination of the reformists over the new Majles (parliament), political and economic experts expressed their pessimism concerning the future of the economic situation under present conditions.

Former president Ayatollah Ali Akbar Hashemi Rafsanjani who compared himself to the greatest Iranian and world's economists and bestowed to himself the grandiose name of "General of Reconstruction" left to Mr. Mohammad Khatami who replaced him on 23 May 1997 a legacy of more than 30 billions US Dollars of foreign debts.

The new president has charm, charisma, a political program that was opposed by the conservatives, but had no economic plans.

"When he was elected against all odds, Mr. Khatami, nevertheless, thanks to a handful of loyal economic experts, realised that there could be no economic progress without political stability and this became one of the main battle grounds between the reformists and the conservatives", noted Dr. Fereydun Khavand, a professor of economics with Paris universities.

Ever since Mr. Khatami was elected on reform programs, the ruling conservatives who were badly defeated at the recent legislative elections attacked him on his economic failures. Conservatives-controlled newspapers like "Reslalat" that speaks for the powerful bazaar and the ultra-conservatives, never hesitated to report labour unrest, strikes by workers who have not been paid for months and the ever increasing numbers of bankrupted businesses, factories and companies.

In his inaugural address to the Sixth Majles of the Islamic Republic, Ayatollah Ali Khameneh'i, the leader of the regime stressed on this economic point and among difficulties peoples faces, cited the dwindling value of the national money, the Rial, against major foreign currencies but particularly the Green Back, the spiralling increase in the prices of basic foods and inflation.

But he did not mentioned obstacles, created mostly by the conservatives forces and the traditional bazaar that stops the Iranian economy to shift from speculation to production.

It was in fact on his order that the last Majles did not approved bills presented by the government to scrap some of the most blatant of the subsidies, particularly the one on fuel oil that serves the have ones more than the deprived.

Like the Communist system, the Islamic Republic when came to power 21 years ago promised a classless society. Grand Ayatollah Khomeini whom the regime celebrated today the eleventh years of his death went as far as promising the Iranians free bread free oil and free taxes.

He brought down the "Royal Palace" with the help of the lumpen, the "mostaz'afin" (deprived), he called them, to whom he promised all the palaces, but as one Tehran resident told Iran Press Service, "today, we have this situation where 99 per cent of the population has become mostaz'af against one per cent connected to the ruling mollahs who are multi-billionnaires".

According to official and independent sources, inflation runs at between 20 to 50 percent while the unemployment ranges between 17 to 25 per cent

"To keep the unemployment at the present level, one needs to create 800.000 new jobs each year. In order to achieve this goal, one needs a growth rate of at least 6 per cent and this while Iran is registering a negative growth rate", Dr. Khavand observed.

The economy of the Islamic Republic is based on speculation controlled by the few nouveaux riches who have money. At the same time, as prices go up "not daily, but hourly", corruption has became both a national plague and sport.

To the conservatives who like Mr. Khameneh'i, would like to government to give priority to economic problems instead of political ones, Mr. Khatami observes that there could be no economic progress without political stability.

Because of the absence of political stability, a sound and clear economic plan, conflicting and repeating regulations, the flight of capital from Iran has reached alarming proportions, as according to some Iranian officials, more than 3000 new Iranian small, medium and large size business have been registrated in the United Arab Emirates.

The election to the post of Speaker of the new Majles of Hojjatoleslam Mehdi Karrubi, a cleric close to the refornists but also accepted by the conservatives is considered as a "bad omen" for the future of Iranian economy.

The only hope for the government is the high price of oil that allow Mr. Khatami to implement some of his reforms. The problem is that every bill passed by the Majles must be approved by the ultra-conservative Council of Guardians and in case of difference between the two, the matter has to be dealt by the Expediency Council that is chaired by Mr. Rafsanjani, meaning by the man known as the "father of corruption". ENDS MAJLES ECONOMY 3600


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Iran Press Service
Iran Press Service
Editor-in-Chief: Safa Haeri
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