Hossein Azimi Arani, one of the country's leading economists in the field of development economics, was a graduate of Oxford University and an expert of the Program and Budget Organization until 1989.

In a part of the book Economics of Iran; Development, Planning, Politics and Culture, which contains a collection of articles and speeches by the late Dr. Azimi, his unpublished speech in the Economic Commission of the Majles in 2002 is discussed.

In this speech, Azimi has examined the economic problems and challenges of the country from the perspective of institutions and considers the reform of the institution to precede the development of a good program. One of Dr. Azimi's points about institutional reform in this speech is the need to remove the responsibility of buying and selling oil currency from the scope of duties of the Central Bank and believes that inflation will not be curbed and the value of money will not be curbed until this responsibility is taken from the Central Bank. The national will not be strengthened.

Article 40 of the Islamic Republic's banking plan, which is being considered by the Islamic Consultative Assembly, does not require the central bank to buy government currency, but according to this article and its notes, the central bank can still buy foreign currency from the government. This article is still a topic of discussion for economists.

Here is part of Dr. Azimi's speech:

* Institutionalization of the pioneers of development planning

Development theories suggest that the main factor in development should be knowledge and wisdom. A few years ago, Oxford Publications published a book that revolutionized the science of development economics. In this book, it was shown that knowledge is the basic element of development. The fact is that national knowledge is divided into components in development theories. But what are these components?

The first component of this knowledge is institutionalization and organization. Institutionalizing and creating an organization is independent of the story of the left and the right, and it is not really a political issue, but a technical one. To clarify the issue, we return to the years after the coup d'état of August 18, 1943, the anti-Mossadegh coup d'état. That is, when the development plan was to be implemented in Iran. The pioneers of development planning in Iran were successful because the basis of their work was institutionalization.

* Experience of establishing Iran Industrial Development Bank

The first institution they established was the Bank for the Development of Industry and Mining in Iran. But how did they create this institution? They came to the conclusion that investment should be made, both internally and externally. Foreign technical knowledge is also required, and they wanted all this. But the important point is that they did not content themselves with just one law and one word to solve the problem on their own! Rather, they created an institution with all its details. When you look at this institution, you see that the total capital was forty million tomans.

I emphasize that he pays attention to these details. With forty million tomans of capital, they announced that this bank is private and that the government is not going to work, and the purpose of creating it is to create entrepreneurial industries. They recognized that the profits of industry were low and the profits of trade were high, so the first step was for the central bank to provide one and a half times the bank's own capital, a 30-year interest-free loan to the Industrial and Mining Development Bank. The point was that the bank operated at two and a half times its own capital and benefited forty percent of the capital's owners.

So not only did they order industrial work, but they also built the right institution. They had given him one and a half times the capital, without interest and for thirty years. In addition, the bank was not to pay installments for fifteen years and to start repaying after fifteen years. In the discussion of foreign capital, they also said that we would sell forty percent of this forty million tomans to foreigners in the form of selling shares, to anyone (I have seen the stock in detail).

* Bills and proposals submitted to the parliament must have six appendices to the justification report

If we are going to do something, we have to build the institutions that are implementing that program before implementing the development program. If those institutions are not in line with the plan, no matter how healthy, accurate, and good the plan is, it will not work. The parliament is an institution that will face major problems if the technical rules are not followed. The basic technical rule is that bills submitted to parliament must have at least six justification reports. All advanced assemblies are like this. I ask which bill will be submitted to the parliament with six justification reports?

* A bill that had only half a page of justification

For several years now, I have not been closely involved with bills, but I remember that in the old program organization there was a very thick bill on VAT for polling. I thought there must be justifiable reports. I opened it and saw that there was only half a page of justification for the report, and the rest were comments. I thought it was a mistake, I called my friends at the ministry and they said that was the justification for that, and that's it. I calculated and saw that the original bill, if it wanted to be implemented as much as the total textbooks in Iran, only the invoice should be issued. I no longer read the rest of the bill and wrote in response that such a thing is impossible, so don't think about it.

But in foreign countries, bills are usually submitted to parliament with six justification reports. One of these reports is the executive justification report, meaning that regardless of whether the bill idea is good or bad, the only question is whether it is enforceable. What prerequisites are required for implementation? Is it possible at all?

The second justification (justification) is a technique that has nothing to do with the good or bad of the idea that the member of parliament must decide on. In technical justification, for example, the legal question is whether these terms used are legal. Is it interpretable? What are the obsolete rules?

The third report is the financial justification report. In financial justification, the question is, how much does the bill cost the government? How Much Money Will It Make? In this case, too, there is no good or bad.

The fourth justification report is economic justification. That is, from the point of view of the main economic variables, per capita production, unemployment, exports, currency and such categories are other than financial categories. The economic report raises the question of what effect the bill will have on economic variables if approved.

The fifth report is a social justification, because any bill, if it becomes law, will inevitably hurt groups in society and harm other groups. The bill analyzes which group benefits and how much they benefit, and whether the social structure of society will change with this bill. And finally, the report is politically justified. In other words, it discusses how much the political structure of society is changing. Of course, the political aspect of a bill may be less or more.

However, usually when a bill comes to the parliament or the cabinet, if it is two pages, for example, it must be justified by fifty pages to clarify the dimensions of the issue, but unfortunately when we look at the bills we see that they do not pay attention to the concept of justification. It falls in the parliament and thousands of other issues are raised in this way.

* The first step is not to prepare your own program, but to adapt the institutions

I will return to the discussion and technical criteria. The first point, in my opinion, is not to prepare a good plan, the first point is to fit the institutions and to fit the institution. What happens is that time is saved and when time is saved, welfare is created and per capita production is increased.

* The government is the most important obstacle to work in Iran

The most important institution that hinders work in Iran is the government. The government is so entwined with such complex regulations that it is really everywhere on the path to development. What we really need is a strong and efficient government. I have drawn the structure of the government in the book Unconstrained Circuits in Iranian Economy, which was written in 1989.

There are ministries that are responsible for exercising sovereignty. The rule of definition is clear and its scope is limited. Sovereignty is the prerogative of the state. No one outside the government has the right to enter the realm of sovereignty. The Higher Institute of Education and Research was supposed to be private in planning and development, I said it's like you want to privatize a police station !! The Iranian Institute of Planning does not intend to privatize the intellectual support of the planning system. If you are thinking about privatization, create a few private institutions. Why did you put your finger on this institution? Therefore, the government must be monopolized by the government and the government must be small and powerful.

In addition, we need an institution for the development of the country, which is a temporary process and may last for fifty years and then be completed. Development programs were approved by the program organization before the revolution. Why? Because they believed that the nature of development was transient, and therefore no one in the program organization was permanently employed. The discussion was that we have a series of special institutionalization projects that should gradually become smaller and smaller.

It was said that the program organization is a big day and then it gets smaller and smaller and eventually it is eliminated. So we have a government and a program whose scope is limited and between these two non-governmental sectors that are responsible for most of the production. The more successful the government and the program, the more likely it is that the non-governmental sector will flourish.

* The central bank should not be responsible for buying and selling currency

Another example is the currency debate. If we equate currency based on wrong institutionalization, the country will suffer. What is the right institution? Honestly, a big hat has gone to this nation, and that is that in Iran, the central bank should not be responsible for buying and selling foreign currency at all! ‌ Where in the world does this happen? The world's central banks buy and sell currency, but for what? To preserve the value of domestic currency. Find a central bank that has the right to buy and sell the entire currency of the country or 90% of the country's currency.

This is not the job of the central bank. The national currency will not be strengthened until the day you take the task of buying and selling oil from the central bank. Whatever you do, because the central bank's main task is to preserve the value of the national currency, it is to create a national currency for the proper flow of work, to provide credit and backup equipment, not to buy and sell currency. To buy and sell currency, the customer must buy and sell in the foreign exchange market.

* We must have an oil resources recycling organization

We gave the currency from the sale of oil to the central bank to sell in the market, while I said a long time ago that we should have an organization to recycle oil resources and put the currency from the sale of oil in that recycling organization and the budget. Don't give a penny to it, and that organization should be obliged to give the oil currency to the government budget for two hundred tomans, two hundred tomans per dollar, and not to sell it cheaply in the market, and the money from this should be spent on specific things: ways The country should be created, water resources should be controlled, and ..... this inactive national wealth should be activated.

In addition, in order to avoid a crisis in the budget, it is better to deposit 300 tomans per dollar in the budget account. Then, if it is assumed that the currency will be considered as one thousand tomans, we are sure that this difference of three hundred tomans has been spent on positive works, has not caused corruption, and has been spent on specific development issues of the country. The issue of institutionalization is where the task is placed and under what conditions it can be done correctly.

* Before reforming the budgeting system, the institution of government must be reformed

Another example is the reform of the budgeting system. The budget cannot be reformed first, but the government must be looked at in its entirety. If all the ministries do both the distribution work and the approval work, and if you give other jobs to the ministry with whatever organization you want, things will eventually get tangled up, because the nature of the work is different. One day the trend is towards development work and the development organization wants, the next day it is on the other side, the legal nature of the work is different.

Organizational structure and financial nature are different. With such an organization of ministries, it is impossible for us to pursue great things. We have no choice but to start gradual reform. For example, if we want to support the economy, for example, if we want to support a fledgling industry, we should not deposit some income into the government budget, because if it goes to the government budget and the budget gets used to it, this income can no longer be eliminated. This year (2002), when car imports were recorded, one of my concerns was that the import duties and customs duties should be paid to the budget.

* Fars