The draft of the Iranian regime’s Seventh Development Plan has raised eyebrows with its ambitious targets and controversial measures. With the aim of achieving an annual economic growth rate of eight percent, the plan envisions massive capital investment in the Iranian economy. However, skeptics argue that the proposed growth in oil and non-oil exports is unrealistic, especially considering the existing trade and banking sanctions imposed on Iran.
Furthermore, the plan’s goal of limiting annual cash growth to 20 percent and reducing inflation to below 10 percent seems incongruous with the proposed tenfold increase in investment. Ali Mazrooei, a former deputy chairman of the regime’s Parliament Planning and Budget Commission, dismisses the plan as unrealistic and illusionary, citing the failure of previous development plans to achieve their quantitative targets.
Despite decades of promises to reduce budget dependency on oil revenues, the draft of the Seventh Development Plan continues to rely on this volatile source of income. The plan stipulates that all income from crude oil and gas condensates exports must be deposited into the National Development Fund, while the government will receive an annual payment of €25 billion ($27 billion) in return.
To compensate for the decline in oil revenue, the regime plans to significantly increase tax revenues, aiming for them to cover 80 percent of the budget. The plan calls for a substantial rise in tax and customs revenues from the current 4.5 percent to 12 percent of gross domestic product (GDP). However, critics warn that such a move may further exacerbate the economic recession, leading to more severe consequences.
Two particularly contentious articles in the draft plan have drawn widespread criticism. Article 15 allows employers to pay their employees only half of the minimum wage for the first three years of employment, with the provision that they can terminate their contracts at any time.
This reduction in wages is also applicable if individuals change their professions. Similarly, Article 16 aims to incentivize businesses to hire people with disabilities, exempting them from the minimum wage requirement and allowing employers to offer lower wages than the approved minimum wage. Trade unions and workers’ councils have strongly condemned these measures, describing them as detrimental to workers’ rights and job security.
This plan is facing serious criticism from labor and retirement activists. The plan includes gradually increasing the retirement age and reviving the master-apprentice system, among other decisions that are to benefit the regime.
Even critics within the regime say that instead of focusing on these changes, the regime should prioritize paying off its current debts to the pension funds. They believe that settling these debts, especially to the Social Security Organization, would largely address the existing problems.
Many of the regime’s economic experts also express concerns about the lack of clarity regarding pension payment calculations and the potential increase in the burden on insurance beneficiaries due to the regime’s reduced share in insurance contributions.
Another cause for concern is that the regime is not looking for a fair distribution of resources in the country. One of the important strategies in the distribution of resources is the participation of people in the economy.
The participation of the private sector and the cooperative sector is important in this field. In Iran’s economy, there is no private sector in the literal sense, and some people have formed characteristic structures through out-of-text relationships, dependence, etc. In the cooperative sector, where the deprived classes and the lower and middle deciles of society can participate, the regime has created restrictions, is careless, and has not provided any special planning.
Iran’s Seventh Development Plan appears to be fraught with ambitious targets and controversial measures. The plan’s projections of rapid growth in oil and non-oil exports and its focus on financial reforms and employment policies have raised concerns among experts and critics.
In the clauses of this plan, there is no sign of ‘cooperation’ in the country’s economy, despite being one of the subjects of the constitution. This shows that the regime has not given any contribution or role to cooperatives in long-term plans and does not believe in the concept of ‘cooperatives’ in the economic structure of the country. Something that is rejecting the people from economic benefits.
In a conversation with Eghtesad-24, Hossein Raghfar, a faculty member of Alzahra University, criticized this plan and said: “The approach taken in the Seventh Plan can be viewed as a comprehensive implementation of neoliberal policies, which is considered disastrous by many. While previous governments may have covertly pursued similar policies, the current government is unabashedly and openly embracing these destructive measures that undermine the country’s productive sector.”
He added: “An alarming trend can be observed in the higher education sector, where an increasing number of students are being required to pay for their education in public universities. This shift towards privatization is resulting in a situation where approximately 97 to 98 percent of registrations in the country’s public universities will be accompanied by tuition fees.
“The draft of the 7th plan contains various articles that indicate suppression of wages, changes in the workforce, and the reduction of social and collective activities. These measures also imply a weakening of the government’s and society’s social obligations. Consequently, it can be anticipated that the well-being of the population will deteriorate further compared to the current situation. Moreover, the persistence in following these approaches is likely to accelerate emigration from the country, as large segments of human capital, particularly young individuals, opt for permanent relocation abroad.”
Besides its failure to respond to the country’s fundamental economic challenges, this plan lacks a proper vision for the improvement of the environment. In 2023, the government has set a budget for 411 projects that do not have environmental permits. While all the ecological experts within the regime were looking for the reason for allocating funds to these projects, the draft of this plan was published.
Surprisingly, after 20 years for the first time, the regime has basically deleted the parts and clauses relating to environmental improvements. This will only worsen the catastrophic environmental conditions, in a situation where the people are now suffering from the vast destruction by the regime.