Changes

Pre-revolutionary Iran's economic development was rapid. Traditionally an agricultural society, by the 1970s Iran had achieved significant industrialization and economic modernization. However, the pace of growth had slowed dramatically by 1978, just before the Islamic revolution. Since the fall of the shah, economic recovery has proven elusive thanks to a combination of factors, including fluctuations in the global energy market. Economic activity was severely disrupted additionally by years of upheaval and uncertainty surrounding the revolution and the introduction of statist economic policies. These conditions were worsened by the war with Iraq and the decline in world oil prices beginning in late 1985. After the war with Iraq ended, the situation began to improve: Iran's GDP grew for two years running, partly from an oil windfall in 1990, and there was a substantial increase in imports. However, Iran had suffered a brain drain throughout the previous decade and wartime policies had resulted in a demographic explosion.  

Pre-revolutionary Iran's economic development was rapid. Traditionally an agricultural society, by the 1970s Iran had achieved significant industrialization and economic modernization. However, the pace of growth had slowed dramatically by 1978, just before the Islamic revolution. Since the fall of the shah, economic recovery has proven elusive thanks to a combination of factors, including fluctuations in the global energy market. Economic activity was severely disrupted additionally by years of upheaval and uncertainty surrounding the revolution and the introduction of statist economic policies. These conditions were worsened by the war with Iraq and the decline in world oil prices beginning in late 1985. After the war with Iraq ended, the situation began to improve: Iran's GDP grew for two years running, partly from an oil windfall in 1990, and there was a substantial increase in imports. However, Iran had suffered a brain drain throughout the previous decade and wartime policies had resulted in a demographic explosion.  

A decrease in oil revenues in 1991 and growing external debt dampened optimism for recovery. In March 1989, the government instituted a new 5-year plan for economic development, which loosened state control and allowed Iran to seek greater latitude in accessing foreign capital. Mismanagement and inefficient bureaucracy, as well as political and ideological infighting, hampered the formulation and execution of a consolidated economic policy, and the Iran fell short of the plan's goals while economic inequality was aggravated. Today, Iran's economy is a mixture of central planning, state ownership of oil and other large enterprises, village agriculture, and small-scale private trading and service ventures. Former President Khatami followed the market reform plans of his predecessor, President Rafsanjani, and indicated that he would pursue diversification of Iran's oil-reliant economy, although he made little progress toward that goal. High inflation and expansive public transfer programs, as well as powerful economic-political vested interests created obstacles for rapid reform.  

A decrease in oil revenues in 1991 and growing external debt dampened optimism for recovery. In March 1989, the government instituted a new 5-year plan for economic development, which loosened state control and allowed Iran to seek greater latitude in accessing foreign capital. Mismanagement and inefficient bureaucracy, as well as political and ideological infighting, hampered the formulation and execution of a consolidated economic policy, and the Iran fell short of the plan's goals while economic inequality was aggravated. Today, Iran's economy is a mixture of central planning, state ownership of oil and other large enterprises, village agriculture, and small-scale private trading and service ventures. Former President Khatami followed the market reform plans of his predecessor, President Rafsanjani, and indicated that he would pursue diversification of Iran's oil-reliant economy, although he made little progress toward that goal. High [[inflation]] and expansive public transfer programs, as well as powerful economic-political vested interests created obstacles for rapid reform.  

During the 2005 election campaign, President Ahmadi-Nejad promised to redistribute oil revenues to the impoverished, fund large infrastructure projects, and privatize Iranian state enterprises. He has been criticized within Iran for not carrying through on many of his promises. While establishment of the Imam Reza fund for cheap loans to youth has been popular, a law increasing the minimum was revoked because of the huge strain on employers. The "Shares of Justice" program--distributing shares of state-owned enterprises to the poor--faces a number of potential problems.  

During the 2005 election campaign, President Ahmadi-Nejad promised to redistribute oil revenues to the impoverished, fund large infrastructure projects, and privatize Iranian state enterprises. He has been criticized within Iran for not carrying through on many of his promises. While establishment of the Imam Reza fund for cheap loans to youth has been popular, a law increasing the minimum was revoked because of the huge strain on employers. The "Shares of Justice" program--distributing shares of state-owned enterprises to the poor--faces a number of potential problems.