Iranian Presidential Elections

Mahmoud Ahmadinejad (left) and Hooshang Amirahmadi (right)

My graduate school advisor and professor of Urban Economics is running for President in Iran.  A revered political and international development consultant to leaders in Washington and in London, Professor Hooshang Amirahmadi always contended that a Western approach to governance could quickly turn around the fortunes of Iran and speedily increase its development.  Below is the economic platform Professor Amirahmadi presents to Iran.

Of all the issues Iranians confront in deciding their next president, the economy is the most imperative. With a high inflation rate, widespread unemployment, sluggish growth, low productivity, plummeting national currency, plunging industrial production, declining income, widening income gap, and growing poverty, hardly anyone in the country is immune from the dismal state of the economy. This is unfortunate since Iran is actually a wealthy country with vast natural resources, a highly-educated workforce, arable land, diverse climates, access to the strategic waterways, and many other favorable attributes.

The economic problems and the mismatch between Iran’s economic achievements and its rich resources are largely rooted in mismanagement and economic sanctions. These and other underlying causes are removable and thus the economic problems entirely solvable if the upcoming presidential election was to produce the right executive leadership. The next president must understand Iran’s economic predicament and its causes, comprehend the world economy, and be able to put an economic development plan for the nation and implement it using a skillful team of economists and international advisors.

As President of Iran, I will turn Iran’s economic plight around by formulating an economic plan based on three principles: economic productivity, export-led industrialization, and labor-market globalization. I will also immediately remove sanctions and mismanagement by resolving the nuclear dispute, normalizing relations with the West, resolving factional infighting and appointing a highly competent economic and international advisory team. These steps will help in opening the global economy to Iran and in establishing a stable economic policy, thus creating a climate of permanency and certainty for productive investments.

The new world is a world of hyper productivity and global competition. Most modern industries of our age are ‘brain’ industries, that is, their main inputs are labor, science and technology. Thus, to increase productivity in these and other ‘knowledge’ or ‘learning’ economic activities, it is critical that education, R&D and industry-driven research are highly promoted. My plan will call for significant increases in labor productivity across economic sectors, agriculture and manufacturing in particular, and achieve this goal by introducing modern workforce development programs throughout the nation.

Improvements in productivity will also be achieved by introducing new technologies, processes, materials and other modern inputs into the Iranian economic units. Accompanied by an appropriate employment policy, productivity increases will lead to an increase in personal income and a corresponding reduction in inflation and poverty. They will also help enhance national and business competitiveness in regional and global markets, as they will make the nation’s exports more competitive and improved in quality. Those exports are keys to Iran’s sustained development and diversification from dependency on oil.

Most nations that have developed their economies in recent decades have done so through a trade-based industrial policy and labor-market globalization strategy. They include the so-called NICS (Newly Industrializing Countries such as South Korea and Taiwan) and BRICS (Brazil, Russia, India, China and South Africa).  Their economic development strategy has more or less involved import-substitution in the early development stage and export-promotion in the more mature stage. Iran’s export-led industrialization will require breaking the dominance of the oil sector in Iran’s export basket, that is, it requires diversification from oil as a dominant source of foreign exchange earnings.

My administration will help diversify the oil sector and promote trade-based industrialization, adopting both import-substitution and export-promotion strategies. My focus will, however, be in promoting non-oil exports particularly in those emerging ‘brain industries’ and commercial agriculture utilizing the talented young Iranians. A successful export promotion strategy will depend on successful global integration, which requires a foreign policy based on normal relations with advanced economies throughout the world, something I can help Iran achieve.  Meanwhile, oil exports will be increased to full capacity to pay for planned economic programs.

The export-led industrialization will help my plan for labor-market globalization. The talented young Iranians will have access to domestic jobs in high-tech industries and to jobs outsourced by global firms. However, successful labor-market globalization will require comprehensive economic and employment growth at home. Indeed, creating millions of jobs in the medium term will be at the core of my national economic development plan. These jobs will be created in the public and private sectors, in various infrastructural, socio-economic and service activities, in high-tech and low-tech industries, in small, medium and large firms, and in rural and urban areas.

Specifically, the jobs will be created through massive increases in public investments in productive economic sectors and infrastructural projects, carefully designed incentive packages for the private sector, and building support networks for small and medium-sized economic activities. Meanwhile, extensive programs will be designed to assist young Iranians become entrepreneurial and attract as much foreign and expatriate investment as possible. Dr. Amirahmadi’s plan will also implement extensive work force development programs and provide for institutional and legal reforms to create a safe and secure environment for business investment and public-private partnership.

Productivity increases, targeted industrialization, and job creation will lead to increased income and poverty reduction, helping achieve a higher level of social justice and sustainable development commensurate with Iran’s richness.  To augment the provision of basic needs of the vulnerable groups, a targeted subsidy program will also be instituted and tightly managed.  To enhance sustainability, preservation and development of the natural and built environments of the country will be a top priority.

The overarching goal of these economic reforms is to create a ‘social-market economy’ (SME) in the long term based on individuals and local communities.  The SME is a liberal economic system that accounts for social needs and environmental sustainability of the nation based on competitive and comparative advantages of firms and localities.   It requires the nurturing of an independent entrepreneurial class and the guiding supervision of an efficient, disciplined and accountable state. The public sector will initially lead in providing the general conditions for the emergence of a vibrant private enterprise which has the ability to gradually crowd out its public competitor.

Iranian Presidential Elections