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Economy of Iran
The economy of Iran is the seventeenth largest in the world by purchasing power parity (PPP) and twenty-sixth by market value.[19][20] The economy of Iran is a mixed and transition economy with a large public sector and some 50% of the economy centrally planned.[21][22] It is also a diversifed economy with over 40 industries directly involved in the Tehran Stock Exchange.[23] Yet, most of the country's exports are oil and gas, accounting for a majority of government revenue in 2010.[24] A unique feature of Iran's economy is the presence of large religious foundations, whose combined budgets make up more than 30% of central government spending.[25] Iran is one of the few major economies that has maintained positive growth in the aftermath of the 2008 global financial crisis, despite sanctions imposed by the international community as a result of the country's nuclear program.[26][27] Distortions resulting from a combination of price controls and subsidies, particularly on food and energy,[28][29] continue to burden the economy. Contraband, administrative controls, corruption,[30][31] and other restrictive factors undermine the potential for private sector-led growth.[32] The legislature in late 2009 passed President Mahmoud Ahmadinejad's bill to reduce subsidies. This is the most extensive economic reform since the government implemented gasoline rationing in 2007. [32] High oil prices in recent years have enabled Iran to amass well over $100 billion in foreign exchange reserves.[18][33] Whilst this has aided self-sufficiency and domestic investment, double-digit unemployment and inflation remain problematic.[34] Iran's educated population, economic inefficiency, and insufficient foreign and domestic investment have prompted an increasing number of Iranians to seek employment overseas, resulting in a significant "brain drain".

History
Prior to 1979, Iran's economic development was rapid. Traditionally an agricultural society, by the 1970s the country had undergone significant industrialization and economic modernization.[37][38] This pace of growth had slowed dramatically by 1978 as capital flight reached $30 to $40 billion US dollars just before the revolution.[39] The government's long-term objectives since the revolution have been economic independence, full employment, and a comfortable standard of living for citizens, but at the end of the 20th century, the country's economy faced many obstacles.[40] Iran's population more than doubled between 1980 and 2000 and grew increasingly younger. Although a relatively large number of Iranians are farmers, agricultural production has consistently fallen

since the 1960s. By the late 1990s, Iran had become a major importer of food. At that time, economic hardship in the countryside resulted in vast numbers of people moving to cities.[39] Following the nationalizations in 1979 and the outbreak of the Iran–Iraq War, over 80% of Iran's economy came under the control of the government.[25] After hostilities with Iraq ceased in 1988, the government tried to develop the country's communication, transportation, manufacturing, health care, education and energy sectors (including its prospective nuclear power facilities), and began the process of integrating its communication and transportation infrastructure with that of neighboring states.[41] The eight-year war with Iraq claimed at least 300,000 Iranian lives and injured more than 500,000. The cost of the war to the country's economy was some $500 billion.

Macro-economic trends
After the revolution, the government established a widespread education system with high rates of accessibility that made major inroads in improving adult literacy rates: 82% of the Iranian adult population is now literate, well ahead of the regional average of 62%.[44] More than two-thirds of the population (74 million people) is under the age of 30 while net enrollment at primary school level is almost 100%, preluding a secondary "demographic boom" in Iran in the coming years.[45][46][47] Iran ranks 40th in science production and first in scientific growth in the world in 2011.[48] According to The Economist, Iran was ranked 39th in a list of industrialized nations, producing $23 billion of industrial products in 2008.[49] Between 2008 to 2009 Iran leaped to 28th from 69th place in annual industrial production growth.[50] In the early 21st century the service sector constituted the largest percentage of gross domestic product (GDP), followed by industry (mining and manufacturing) and agriculture. In 2008 GDP was estimated at $382.3 billion ($842 billion by PPP), or $5,470 per capita ($12,800 by PPP).[32] The GDP figure is projected to double in the next five years.[51] However, real GDP growth will remain relatively sluggish, averaging 2.2% a year in 201216, insufficient to improve the unemployment rate.[52] Iran's informal economy is also important.[32] According to the IMF, Iran is in transition to a market economy from a planned economy.[53] On account of these figures and the country’s small but diversified industrial base, the United Nations classifies Iran's economy as semi-developed.[54] According to Goldman Sachs, Iran has the strong possibility of becoming one of the world's largest economies in the 21st century.[55][56] Also, due to huge energy subsidies, it is one of the most energy-inefficient countries in the world, with energy intensity three times that of the global average and 2.5 times higher than the middle eastern average.[57]

Fiscal and monetary policy
Since the 1979 revolution, government spending has averaged 59% on social policies, 17% on economic matters, 15% on national defense, and 13% on general affairs.[59] Between social and economic affairs, payments have averaged 39% on education, health and social security, 20% on other social affairs, 3% on agriculture, 16% on water, power and gas, 5% on

12% on roads and transportation and 5% on other economic affairs.170 trillion rials). currency. a strategy for long-term sustainable growth. The value of the US dollar is estimated at IRR 10.7% of GDP in 2009. as the plan is not expected to have a direct impact on banks.[63] Iran had around $100 billion in foreign reserves at the start of 2009[32] and balances its external payments by pricing oil at approximately $75 per barrel. customs.[62] According to the head of the Department of Statistics of Iran. By 2006 most industries. following annual approval of the government’s budget. the Iranian Government declared its intention to privatize most state industries in an effort to stimulate the war-torn economy. and the net fiscal balance (after payments to Iran's National Development Fund) will register a small surplus of 0. an ambitious series of measures that include subsidy reform. and the inflation rate has climbed to 22% this year. the rate of inflation fluctuated around 14%. with 31% derived from taxes and fees.[64] Iran's external and fiscal accounts will reflect falling oil prices in 2012-13 but remain in surplus. the development of nationwide distribution of goods and services. The main intention is to make the country self-sufficient by 2015. The central bank's interest rate is 21%. taxation. mainly due to opposition by a nationalist majority in the Iranian parliament.[34] In 2008. Iran's long term intention is to make its industries more efficient and competitive on the world stage.[32] Between 2002 and 2006.[61] The budget is based on an oil price of $80 per barrel.500 for the same period.[65] Five-year socio-economic development plan The fifth development plan for the period 2010–15 sets guidelines for the socio-economic development of the country.[59] Iran's gross net investment was 27. Designed to give power to the people through delegation. some 70% of the .[59] Economic reform plan Expansion of public healthcare and international relations are the other main objectives of the fifth plan.[20] Centralization and privatization Following the cessation of hostilities with Iraq in 1988. major elements of these policies will be incorporated into the five-year economic development plan. The sale of state-owned factories and companies proceeded slowly.[70] These reforms target the major sources of inefficiency and price distortion in the country's economy and are likely to lead to major restructuring of almost all economic sectors. Under the plan. banking. an increase of 45% on 2010.manufacturing and mining. social justice and productivity.[67][68][69] By removing energy subsidies.[71] Iranian President Mahmoud Ahmadinejad has stated that the country will become the world's 12th largest economy by 2015.[67] The banking sector in Iran is seen as a potential hedge against the removal of subsidies. the government could save at least 30 to 35% on its expenses. employment. Thereafter. around 55% of the government's revenue came from oil and natural gas revenue. if the rules of budgeting were observed in this very structure.3% of GDP in 2012-13.1% of GDP in 2012-13.[66] the plan is part of "Vision 2025". The current account will post an average surplus of 2.[15][60] The budget for the year 2011 was $500 billion (5.[52] The Iranian rial has lost more than 50% of its value between December 2011 and April 2012. the Central Bank of Iran will present a detailed monetary and credit policy to the Money and Credit Council (MCC) for approval. 10% higher than last year. construction.

remained state-owned. petrochemicals.[99] Since strict interpretation of Article 44 has never been enforced in Iran. dams and large-scale irrigation networks.[104][110] Operating everything from vast soybean and cotton fields to hotels. The state sector includes all large-scale industries.[111] Bonyad companies also compete with Iran's unprotected private sector. auto-manufacturing and shipping lines. and private sectors based on systematic and sound planning. agriculture. railroads and the like. trade.000 cooperatives were in operation across the country employing about 15 million people. foreign trade. major minerals. shipping. post.[100] As a result. copper.[101][102] In 2005. and machine tools remained in the public sector. and generally not profitable. the IRGC maintains a monopoly on smuggling. Forty percent of such sales are to be conducted through the "Justice Shares" scheme and the rest through the Tehran Stock Exchange.[107] The Iranian Ministry of Petroleum has awarded the IRGC billions of dollars in contracts as well as major infrastructure projects. insurance.economy.[108] Tasked with control of Iran's borders. The government will retain ownership of the remaining 20%.[109] Religious foundations Welfare programs for the needy are managed by more than 30 public agencies alongside semi-state organizations known as bonyads.[32] Article 44 of the Iranian Constitution stipulates that the country's economy should consist of state. industry. in recent years the role of this sector has increased whilst a 2004 amendment to the constitution allows 80% of state assets to be privatized. soft drinks. These will all be publicly owned and administered by the State. IRGC also runs laser eye-surgery clinics.[32] The majority of heavy industries including steel. the private sector has played a much larger role than that outlined in the constitution. The bonyads are a consortium of over 120 organizations which are tax-exempt and in receipt of government subsidies and religious donations. animal husbandry. whose firms complain of the . aviation. 120. roads. Cooperative companies and enterprises concerned with production and distribution in urban and rural areas form the basis of the cooperative sector and will be operated in accordance with Shariah law. costing Iranian companies billions of dollars in lost business opportunities each year. telegraph and telephone services. automobiles. radio and television.[103] Iranian Revolutionary Guard Corps The Iranian Revolutionary Guard Corps (IRGC) are thought to control about one third of Iran's economy through a series of subsidiaries and trusts.[104] The smuggling itself is encouraged in part by the generous subsidization of domestic goods (including fuel). the bonyads are seen as overstaffed. corrupt. together with several private non-governmental organizations. and services that supplement the economic activities of the state and cooperative sectors. Some $63 billion of such assets were privatized in the period 2005–2010. They answer directly to the Supreme Leader of Iran and control over 20% of Iran's GDP.[104][105][106] Estimates by the Los Angeles Times suggest the IRGC has ties to over one hundred companies and an annual revenue in excess of $12 billion in business (construction in particular). government assets were estimated at around $120 billion.[98] The private sector consists of enterprises concerned with construction. builds bridges and roads and is a developer of oil and gas fields. cooperative. makes cars. banking. As of 2008. with most light industry privately owned. power generation. reducing the government's direct share of gross domestic product (GDP) from 80% to 40%.

even though mining employs less than 1% of the country’s labor force. notably petroleum.[32][114] Personal income Iran is classed as a middle income country and has made significant progress in provision of health and education services in the period covered by the Millennium Development Goals (MDGs). old age. 2008 was $9.612. and occupational accidents. which includes mining. account for 80% of Iran’s export revenues.156 per year).[7] Mineral products. in 1996. In 2009 this was about $263 per month ($3.[118] In 2010.900 by PPP). Iran's Department of Statistics announced that 10 million Iranians live under the absolute poverty line and 30 million live under the relative poverty line.000 new labor force entrants each year. manufacturing. the .[120] Membership of the social security system for all employees is compulsory.[7] As of 2004 the industrial sector.[116] The World Bank reports that in 2001. resulting in significant brain drain. which in turn supplements the contribution of the employer up to a total value of 3%.[6] Employees between the age of 18 and 65 years are covered by the social security system with financing shared between the employee (7% of salary). disease. the employer (20–23%) and the state.[111] Labor and welfare Experts believe that annual economic growth of above 5% is necessary to absorb the 750.[117] The poverty line in Tehran for the year ending March 20. which eliminate worries over the need to make a profit in many market sectors.[112] Agriculture contributes just over 11% to the gross national product and employs one third of the labor force.[32] Women made up 33% of the labor force in 2005. while the national average poverty line was $4.[113] Youth unemployment (aged 15–24) was 23% in 2008. and 8% on education.[13][32][115] There is a minimum national wage applicable to each sector of activity fixed by the Supreme Labor Council. 12% on health care.[122] Iran spent 22. and construction. approximately 20% of household consumption was spent on food. Provision of social security is extended to self-employed workers.[122] Civil servants. the government began consolidation of its welfare organizations in order to eliminate redundancy and inefficiency. the Iranian Center for Statistics estimated that more than 73% of the Iranian population was covered by social security. Iran's average monthly income was about $500 (GNI per capita in 2009: $10.[7] In 2004 the service sector ranked as the largest contributor to GDP (48%) and employed 44% of workforce. contributed 42% of GDP and employed 31% of the labor force. In 2010.932. In 2003 the minimum standard pension was 50% of the worker’s earnings but no less than the minimum wage.difficulty of competing with bonyad firms whose political connections provide government permits and subsidies. 32% on fuel.[119] Social security Although Iran does not possess universal social protection.[122] In 2003. who voluntarily contribute between 12% and 18% of income depending on the protection sought.5% of its 2003 national budget on social welfare programs of which more than 50% covered pension costs.[121] Social security ensures employee protection against unemployment.

butter and cheese. trout. carp. in actuality there is no union system in the country. and the Iranian Revolutionary Guard Corps all have their own pension systems. eggs. Employing personnel on consecutive six-month contracts (a practice that is used to avoid paying benefits) is illegal. temporary and indefinite employment contracts all recognized. including hiring of local and foreign staff.regular military. Since 1979 strikes have often been met by police action. milk. as is dismissing staff without proof of a serious offense. poultry.[128][128] The country's meat and dairy products include lamb. corn. This provides a broad and inclusive definition of the individuals it covers. almonds. overworked and under-fertilized soil. with written. the labor law makes it extremely difficult to lay off staff. Other crops produced are barley.[127][129] . pike and sturgeon. tea. mechanization. About one third of total cultivated land is irrigated. walnuts and spices including cumin and sumac. improvements to crops and livestock as well as land redistribution programs.[126] Primitive farming methods. fodder plants (alfalfa and clover). legumes (beans and lentils). beef. which usually rules in favor of the employee.[126] with the main food-producing areas located in the Caspian region and in the valleys of the northwest.[127] Wheat. Agricultural production is increasing as a result of modernization. Wool and leather are also produced whilst honey is collected from beehives and silk harvested from silkworm cocoons. Considered employee-friendly. tobacco. berberis and berries as well as the second largest producer of dates.[121] Sectors of the economy Agriculture and foodstuffs About 11% of Iran's land is arable. Ostensible worker representation is provided by the Workers' House. Iran is also the world's largest producer of saffron. Forestry products from the heavily wooded northern slopes of the Alborz Mountains are economically important although the cutting of trees is strictly controlled by the government.[124] Guild unions operate locally in most areas but are limited largely to issuing credentials and licenses. whilst others require irrigation for successful crop production. Construction of multipurpose dams and reservoirs along rivers in the Zagros and Alborz mountains have increased the amount of water available for irrigation. pistachios. potatoes. cotton. fruits. the most important crop.[125] A comprehensive Iranian labor law covers all facets of labor relations. hemp. poor seed and scarcity of water are the principal obstacles to agricultural production. goat meat. from which caviar is harvested to make Iran the world's largest producer. oral. law enforcement agencies. is grown mainly in the west and northwest whilst rice is the major crop in the Caspian region. Rivers that drain into the Caspian Sea are fished for salmon. Some northern and western areas support rain-fed agriculture. a state-sponsored institution that nevertheless attempts to challenge some state policies. vegetables. The right of workers to strike is generally not respected by the state.[123] Trade unions Although Iranian workers have a theoretical right to form labor unions. Labor disputes are settled by a special labor council. sugar beets. which also runs a reforestation program.

000 people around Tehran.[130] By 2003. Other important manufactures include automobiles. textile mills. In 2007 Iran reached self-sufficiency in wheat production and for the first time became a net wheat exporter. Inadequate social capital.Since the 1979 revolution commercial farming has replaced subsistence farming as the dominant mode of agricultural production. damaging the large oil refinery at Abadan where production came to a halt. An inefficient banking system.[7] Iran has attained 90% self-sufficiency in essential agricultural products. many small factories sprang up to produce import-substitution goods and materials needed by the military.[137] . Iran has gradually become the largest operational base of industrial robots in West Asia. nuts. rubber products. agricultural products. In 2000. A shortage of managerial skills.[133] Other products include paper. Reconstruction of the refinery began in 1988 and production resumed in 1993. cement and industrial machinery. Shortcomings in international market awareness necessary for global competition. Iran appears to be emerging as an industrialized country.[131] Major exports in this category include fresh and dried fruits. using domestic cotton and wool such as Tehran Patou and Iran Termeh employed around 400. processed foods. and copper products. social responsibility and socio-cultural values.[134][135] A 2003 report by the United Nations Industrial Development Organization regarding small and medium sized enterprises (SMEs) in Iran[136] identified the following impediments to industrial development:              Lack of monitoring institutions. although rice production fails to meet domestic demand thereby making substantial imports necessary. Despite these problems. home and electric appliances. Cumbersome bureaucratic procedures. steel. Major advancements have taken place in the petrochemical. and spices. processed foods. pharmaceutical. By 1997. animal hides. During the Iran–Iraq War.[132] Iran's major manufactured products are petrochemicals. the gross value of Iran's agricultural sector products reached $25 billion. a quarter of Iran's non-oil exports were of agricultural products. telecommunications equipment. The absence of social learning loops. leather products and pharmaceuticals. defense.S. Even in the face of U. A shortage of skilled labor.[7] Manufacturing Large-scale factory based manufacturing began in the 1920s and has developed gradually. recent studies reveal that over the past few years Iran has progressed rapidly in various scientific and technological fields. Isfahan and along the Caspian coast. Insufficient research & development. Lack of intellectual property protection. and heavy industry sectors. Corruption. Inefficient taxation. economic sanctions. aerospace. Socio-cultural apprehensions. In spite of the war. Iraq bombed many of Iran’s petrochemical plants.

Traktorsazi.2 billion) to applicants . particularly Bank Maskan. ceramics.901 commercial vehicles. such as the Bahman Group. the banking sector. This growth continued until the mid-1970s when a sharp rise in inflation and a credit squeeze caused the boom to collapse. Since 1992. Taiwan. especially in large urban centers.421 cars in 2010. medium sized trucks.[138] More than $500 million worth of hand-woven carpets are exported each year. and wooden artifacts. With 61% of the market in 2001. Other car manufacturers.[143] Iran ranked the world's 12th biggest automaker in 2010 and has a fleet of 11.5 million cars. and sold $100 million worth of military equipment abroad. heavy duty trucks. including NATO members. As of January 2011. although housing shortages and speculation have remained serious problems. military vessels.2 million weavers in Iran produce carpets for both domestic and international export markets . mini trucks. passenger cars such as Saipa's Tiba.395. including 35.2 million people work in some 250 fields of the handicraft industry and contribute 3% of GDP. ranking it 25th in global defense expenditure. there were 13 public and privately owned automakers within Iran.[148] Defense industry In 2007 the International Institute for Strategic Studies estimated Iran's defense budget at $7.[141] Automobile manufacturing As of 2001. accounting for 30% of the 2008 world market . armored personnel carriers. radar systems.6% of GDP or $102 per capita. whilst Saipa contributed 33% of Iran’s total production in the same year. is the predominant car brand in the country. submarines.[144][145][146][147] Iran had a total production of 1. Romania and India.[149] In 2006 Iran exported weapons to 57 countries. of which Iran Khodro and Saipa accounted for 94% of total domestic production.[150][151][152] Construction and real estate Until the early 1950s Iran's construction industry remained largely in the hands of small domestic companies.Handicrafts Iran has a long tradition of producing artisan goods including Persian carpets. The construction industry had revived somewhat by the mid-1980s. Kish Khodro. glass.[142] These automakers produce a wide range of automobiles including motorbikes. leather goods. vans.[139][140] Around 5. textiles. Iran Khodro's Paykan. The country's rich carpet-weaving tradition dates from pre-Islamic times and remains an important industry contributing substantial amounts to rural incomes. Kerman Motors. Shahab Khodro and others accounted for 6% of the total market. replaced by the Samand in 2005. has given loans up to 102 trillion rials ($10. a guided missile destroyer.31 billion. Raniran. copperware and brassware. equivalent to 2. large size buses and other heavy automobiles used for commercial and private activities in the country. Iran Khodro was the largest player. In 2009 Iran ranked fifth in car production growth standing next to China. Increased income from oil and gas and the availability of easy credit triggered a subsequent building boom that attracted major international construction firms to the country. guided missiles. minibuses. An estimated 1. The country's defense industry has advanced in the past 25 years and now manufactures many types of arms and equipment. Iran's Defense Industries Organization (DIO) has produced its own tanks. and a fighter plane.

uranium. near Bafq.[154] Construction is one of the most important sectors in Iran accounting for 20–50% of total private investment in urban areas and one of the prime investment targets of well off Iranians.[160] Iran has recoverable coal reserves of nearly 1.[32] In 2010 Iran completed its first nuclear power plant at Bushehr with Russian assistance. In 1978.[169] Domestic oil and gas along with hydroelectric power facilities provide the country with power.[153] Because of poor construction quality. and Kerman.[170] In 2008 Iran paid out $84 billion in subsidies for oil. Iran ranked as the world's fourth largest oil producer.000 and 383. legal barriers. salt. The government owns 90% of all mines and related large industries in Iran and is seeking foreign investment to development of the mining sector. zinc. about 75% of all mining sector employees work in mines producing minerals other than oil and natural gas. gas. whereas some other countries reprocess up to 60%.5 million short tonnes. Oil is also found in northern Iran and in the offshore waters of the Persian Gulf. Factors including lack of suitable infrastructure. chromium. copper. By mid-2008. many buildings stand in need of anti-seismic reinforcement or renovation. Iran became self-sufficient in steel production in 2009.9 billion short tonnes. gypsum. barite.3 million short tonnes of coal annually and consumed about 1.[172] .[155][156] Seventy percent of Iranians own their own homes. The country's major oil fields lie in the central and southwestern parts of the western Zagros mountains.[160] The sector accounts for 3% of the country’s exports.[162] Large iron ore deposits exist in central Iran.6% of the country’s GDP in 2011. while Iran exports this item to 40 countries.[170] whilst energy consumption is much higher than the international norm. OPEC's second largest oil producer and second largest oil exporter.[163] The country plans to increase hard-coal production to 5 million tons in 2012 from 2 million tons in November 2008.[157] Iran also has a large dam building industry. and government control over all resources account for such low figures.[171] Iran has been a major oil exporter since 1913. the country produced about 1. lead.000 tons respectively by March 2009.[164] Main steel mills are located in Isfahan and Khuzestan.[165] Aluminum and copper production are projected to hit 245. iron ore.[164][166] Cement production reached 65 million tons in 2009.[29] It is the third largest consumer of natural gas in the world after United States and Russia. strontium.[169] Energy wastage in Iran amounts to six or seven billion dollars per year. silica. gas and electricity.[6] Annual turnover in the construction industry amounted to $38.[160] Although the petroleum industry provides the majority of revenue. and gold.[57] Iran recycles 28% of its used oil and gas.[159] a figure that increases to 4% when other mining-related industries are included.of Mehr housing scheme. making it a small net importer of coal. exploration difficulties.[159][161] The mine at Sar Cheshmeh in Kerman Province is home to the world's second largest lode of copper ore.4 billion in 2005 and $32. molybdenum. the latter of which is a mainly a by-product of the Sar Cheshmeh copper complex operation. petroleum and petrochemicals Iran possesses 10% of the world's proven oil reserves and 15% of its gas reserves.[7] These include coal.[166][167] Energy.8 billion in 2011. Yazd.[158] Mines and metals Mineral production contributed only 0.

[187] By early 2000. Iran's exports in petrochemicals reached $5.[178] Pipelines move oil from the fields to the refineries and to such exporting ports as Abadan. excluding the US dollar. and the completion of many other special economic zone projects.8% of Iran’s GDP. including military expenditures. Trading is primarily in the euro and Iranian rial along with a basket of other major currencies. Estimates of service sector spending in Iran are regularly more than two-fifths of the GDP. remains high.[32] Urbanization has contributed to significant growth in the service sector. Oil production rose in the late 1980s as pipelines were repaired and newly discovered oil fields in the Persian Gulf exploited. professional services.Following the 1979 revolution the new government reduced daily oil production in accordance with its oil conservation policy. much of which is government-related. Iran's refining industry requires $15 billion in investment over the period 2007–2012 to become self-sufficient and end imports.5% of the labor force in 2008. oil tankers. in Asalouyeh. offshore platforms and exploration instruments. government salaries. By 2004. and Kharg Island. Iran's state-owned oil and gas industry has entered into major exploration and production agreements with foreign consortia. Iran allocated around 0. roughly equivalent to the 1990 figure.[186] Services Despite efforts in the 1990s towards economic liberalization.[79] Iran manufactures 60–70% of its industrial equipment domestically.87% against the government's medium-term target of 2. commerce. Kermanshah.[188] In 2009 the ratio of research to GDP was 0.5 billion in 2007.6 billion during the first ten months of the Iranian calendar year 2010.5%. including expenditure by quasi-governmental foundations. Since 1997. representing 6. petrochemicals and gas in various currencies.[173] Officials in Iran estimate that Iran's annual oil and gas revenues could reach $250 billion by 2015 once current projects come on stream. Important service industries include public services (including education). government spending. Bandar-e Mashur. and social security disbursements.[189] . and tourism.[179][180] In 2008 the Iranian Oil Bourse (IOB) was inaugurated in Kish Island. or 20. the largest ethylene unit in the world. ranking the country "far behind industrialized societies" and the world average of 1.4%.[7] The total value of transport and communications GDP is expected to rise to $46 billion in nominal terms by 2013.[183][184][185] According to Iran's Petroleum Ministry.[182] Thanks to a fertilizer plant in Shiraz.4% of its GDP to research and development. Iran's national science budget in 2005 was about $900 million. A further decline in production occurred as result of damage to oil facilities during the Iraq-Iran war.[189] Projections based on employment figures compiled for the International Labor Organization in 1996 suggest that Iran’s transport and communications sector employed 3. drilling rigs. and Tehran failed to meet domestic demand for gasoline in 2009. Iran’s annual oil production reached 1. $9 billion in 2008 and $7.[174][175][176][177] Major refineries located at Abadan (site of the country's first refinery).[181] The IOB is intended as an oil bourse for petroleum.4 billion barrels producing a net profit of $50 billion. personal services. Iran plans to invest $500 billion in its oil sector until 2025. including refineries.4 million people.

[190] Electronic commerce in Iran passed the $1 billion mark in 2009.[199] In the early 2000s the industry still faced serious limitations in infrastructure.[32] Rials are also exchanged on the unofficial market at a higher rate. In 1979. and Shiraz.Retail and distribution Iran's retail industry consists largely of cooperatives (many of them government-sponsored). the government nationalized all private banks. 73% of all Iranians were covered by the voluntary national health insurance system.[192][195][196] This figure is projected to increase to $3. About 1. Iran is rated among the "10 most touristic countries in the world". The total market value of Iran’s health and medical sector was $24 billion in 2002 and was forecast to rise to $50 billion by 2013. primarily through banks.[163] Although over 85% of the population use an insurance system to reimburse their drug expenses.478 small grocery retailers.2 billion.65 billion by 2013. France.[191] Healthcare and pharma The constitution entitles Iranians to basic health care.[193][194] In 2006. Shahrvand and Hyperstar Market. The bulk of food sales occur at street markets with prices set by the Chief Statistics Bureau. In 2003 Iran ranked 68th in tourism revenues worldwide. reflecting the increasing demand on medical services. Iran’s unit of currency is the rial which had an average official exchange rate of 9. interest on loans was replaced with handling fees. communications. dollar in 2007. but these are mostly one-off. 55 pharmaceutical companies in Iran produced 96% (quantitatively) of the medicines for a market worth $1.326 rials to the U. independently owned operations.[54][197][198] The most popular tourist destinations are Isfahan. The biggest chainstores are stateowned Etka.[59] In 2008 Iranian reserves in foreign banks reached $81 billion. Iran has 438. A banking system was subsequently created where. including the republics of Central Asia.000 foreign tourists visited Iran in 2004 and 2. while a small percentage of tourists (about 10%) came from the countries of the European Union and North America.[201] . More mini-markets and supermarkets are emerging.659.[194] Tourism and travel Although tourism declined significantly during the war with Iraq in the 1980s it has subsequently recovered. and independent retailers operating in bazaars. in accordance with Islamic law.3 million in 2009 with most arrivals from Asian countries. By 2008. the government heavily subsidizes pharmaceutical production/importation in order to increase affordability of medicines and vaccines.[200] According to UNESCO and the deputy head of research for Iran Travel and Tourism Organization (ITTO).[198] Several organized tours from Germany. This system went into effect in the mid-1980s. finance and insurance Government loans and credits are available to industrial and agricultural projects. and personnel training.000 tourist visas granted in 2003 were obtained by Asian Muslims. Refah. industry standards. Mashhad.S.[200] Banking.[126] The majority of the 300. and other European countries come to Iran annually to visit archaeological sites and monuments.[190] These are especially popular in cities other than Tehran where the number of hypermarkets and supermarkets is still very limited. who presumably intended to visit important pilgrimage sites in Mashhad and Qom.

223 Internet Service Providers (ISPs).[217] According to the World Bank.4 billion was from international commercial bank loans. electronics and IT Broadcast media. revenues from the Iranian telecom industry were estimated at $1.[218] There were 1.[203] The stock market capitalization of listed companies in Iran was valued at $100 billion in 2011.9%).200 registered IT companies in 2002. large-scale private firms and four thousand wealthy or connected individuals who do not always repay their loans. In 2008 there were 345 telephone lines and 106 personal computers for every 1. Iran's telecom market was the fourth-largest market in the Middle East at $9. particularly on its Tehran Stock Exchange.[163] a figure partly attributable to low average income per head. which issues currency and oversees all state and private banks.9 billion from abroad. the Tehran Stock Exchange trades the shares of more than 330 registered companies. 90 persons have managed to secure collective facilities totaling $8 billion from banks. $7.[210] In 2010. Iran's information and communications technology sector had a 1. 200 of which were involved in software development.The banking system consists of a central bank.[215] In 1998 the Ministry of Post. In 2001/02 third-party liability insurance accounted for 46% of premiums. since when demand for Internet access has increased rapidly. There are also two development banks and a housing bank that specializes in home mortgages.4% share of GDP in 2008. followed by Asia.9 billion by 2014 at a compound annual growth rate (CAGR) of 6. The government began to privatize the banking sector in 2001 when licenses were issued to two new privately owned banks.[209] According to experts. of which $3.2 billion.6 billion was FDI.[219] By the end of 2009.[207] In 2009. fire insurance (10%) and life insurance (9.[208] As of 2010.000 people are employed in this sector. and around $900 million consisted of loans and projects from international development banks.[214] Around 150.[205][206] While most Iranians have difficulties obtaining small home loans. GIO informed that Iranian banks have some $38 billion of delinquent loans.[214] Personal computers for home use became more affordable in the mid-1990s. all private sector operated. In 2008 software exports stood at $50 million. The leading player is the Iran Insurance Company. Iran attracted almost $11.000 residents. including five national radio stations and five national television networks as well as dozens of local radio and television stations are run by the government.[211] Insurance premiums accounted for just under 1% of GDP in 2008.000 in the software industry.2 billion and is expected to grow to $12.[204] The accounts of the state-owned commercial banks are dominated by loans to the state.9%. Several commercial banks headquartered in Tehran have branches throughout the country. including 20.[216] In 2006 Iran had 1. Iran offers many investment opportunities.[220] .[163] Five state-owned insurance firms dominate the market. while they are only capitalized at $20 billion.[204] Communications. bonyad enterprises. Alborz and Dana insurances. Iran also had the world's third largest number of bloggers (2010). followed by health insurance (13%). the Bank Markazi. As of 2010. four of which are active in commercial insurance. In 2006. Telegraph & Telephone (later renamed the Ministry of Information & Communication Technology) began selling Internet accounts to the general public.

Mashhad.3 billion in 2007. After arriving in Iran. South Africa.7 billion in 2005 and $55. the value of Iran’s non-oil exports is expected to reach the value of imports at $43 billion in 2011 and $50. Tabriz. 30% ($350 million) to Iraq.5 billion a year later.2% over the previous year.699 mi) of roads. imported goods are distributed throughout the country by trucks and freight trains. hand-woven carpets and automobiles are the core items of Iran's non-oil exports. Iran has increased its economic cooperation with other developing countries in "south-south integration" including Syria. France. India.[228] Iran's exports of technical and engineering services in 2007–08 were $2. All large cities have mass transit systems using buses whilst several private companies provide bus services between cities. opened in 1995.[223] Iran's non-oil exports stood at $16. methanol (methyl alcohol). In 2007 the country had 178. liquefied propane. Iran's trade with India passed the $13 billion mark in 2007.7 billion of which 40% of technical services pertained to Central Asia and the Caucasus.7 billion in 2000 to $39. Dozens of cities have airports serving passenger and cargo planes.[233][225] Iran is among the few countries that has maintained positive GDP growth despite the 2008 global financial crisis. dam construction and power generation in different countries. accounting for 9% of 2008 GDP. connects Bandar-Abbas to the railroad system of Central Asia via Tehran and Mashhad.[37][38] Since the mid 90's. The Tehran–Bandar-Abbas railroad. From 1950 until 1978. playing a major role in the modernization of its infrastructure and industry. an educated and motivated workforce as well as a favorable location.901 mi) of track.106 kilometres (6.[231][232] The total volume of imports to Iran rose by 189% from $13.[224] and $25 billion in 2010. of which 66% were paved. and close to 20% ($205 million) to Africa. Tehran.[26] Iran's major commercial partners are China. More than one million people work in the transportation sector. Ahvaz and Isfahan are in the process of constructing underground railways. Russia and Italy. Cuba and Venezuela.152 kilometres (110. the national airline. Iran Air.[225][226] For the first time.[227] Pistachios. South Korea.[32] The country’s major port of entry is Bandar-Abbas on the Strait of Hormuz. an 80% increase in trade volume within a year.189 billion in 2009. was founded in 1962 and operates domestic and international flights. Japan. Other major ports include Bandar Anzali and Bandar Torkaman on the Caspian Sea and Khoramshahr and Bandar Imam Khomeini on the Persian Gulf. which gives it access to an estimated population of some 300 million people in Caspian markets.[222] Petroleum constitutes 80% of Iran's exports with a value of $46. Germany.[234] Iran is expanding its trade ties with Turkey and Pakistan and . the United States was Iran's foremost economic and military partner. Persian Gulf states and some ECO countries further east.[230] The country has made the development of non-oil exports a priority[73] and has the advantage of a broad domestic industrial base. irrigation. China. a rise of 47. India.[229] Iranian firms have implemented projects in different fields such as energy.000 inhabitants[144] whilst trains operated on 11.Transport Iran has an extensive paved road system linking most of its towns and all of its cities. pipelines.9 billion in 2006.[221] Foreign trade and economic relations Iran is a founding member of OPEC and the Organization of Gas Exporting Countries. Shiraz. The same year there were approximately 100 passenger cars for every 1.

2 billion in 2007 from $4. Operation of the field was then transferred to NIOC after a set number of years. 164 in legal support for investments.[246] In 2006. Iran ranked 142 among 181 countries in terms of working conditions in 2008. Iran is a member of the World Bank's Multilateral Investment Guarantee Agency. Economic and Technical Assistance of Iran (OIETAI).[239] It is estimated that one third of Iran's imported goods and exports are delivered through the black market. UAE.[241] Foreign direct investment in Iran hit a record $10.3 trillion dollars. money invested in the local real estate market and import-export businesses. a single economic market in West and Central Asia.[240] Unfavorable or complex operating requirements and international sanctions have hindered foreign investment in the country. Iran stands at number 96 in terms of business start-up.[242] Foreign transactions with Iran amounted to $150 billion of major contracts between 2000 and 2007. it is estimated that Iranian expatriates handle over 20% of its domestic economy and account for an equal proportion of its population. with Asia and Europe the largest participants as shown below:[251] .[236][237] Migrant Iranian workers abroad remitted less than $2 billion home in 2006.[244] The EIU estimates that Iran's net FDI will rise by 100% between 2010–2014. and illegal jetties. telecom and pharmaceuticals sectors. petrochemicals.[235] Since 2003. 147 in asset registration.[243] In 2007. despite liberalization of relevant regulations by the Iranian government in the early 2000s. and geared towards providing Iran and other countries with required consumer goods. including buyback contracts in the oil sector whereby the contractor provided project finance then received remuneration from the National Iranian Oil Company (NIOC) in the form of an allocated production share. In Dubai. some indirect oilfield development agreements were made with foreign firms. food and beverages.2 billion in 2005 and $2 million in 1994.[249][250] Firms from over 50 countries invested in Iran between 1992–2008. underground economy. thereby completing the contract. 165 in obtaining permits. 84 in obtaining credit. Iran has increased investment in the economic development and reconstruction of neighboring countries such as Iraq and Afghanistan. trade between Dubai and Iran tripled to $12 billion. copper mining. Iran had $62 billion worth of assets abroad. the combined net worth of Iranian citizens abroad was about 1.[104] Foreign direct investment In the 1990s and early 2000s.shares with its partners the common objective to create the ECO.[238] Between 2005 and 2009. 147 in employment.3 billion of foreign investment between the Iranian calendar years 1993 and 2007.[247] According to the head of the Organization for Investment. 104 in tax payments. Iran absorbed $24. including private and government lines of credit. collectively known as the Bazaar. construction. 56 in contract feasibility and 107 in bankruptcy. clothing.[245] Foreign investors have concentrated their activities in the energy. vehicle manufacture. utilities.[248] Iran ranks 62nd in the World Economic Forum's 2011 analysis of the global competitiveness of 142 countries. 142 in overseas trade.

insurance.[255] Since 2000 exceptions to this restriction have been made for items including pharmaceuticals and medical equipment.[262][263] Iran could reduce the world price of crude petroleum by 10%. Creation of free trade zones such as Qeshm.Iran and the World Trade Organization Iran has held observer status at the World Trade Organization (WTO) since 2005.[253] International sanctions After the Iranian Revolution in 1979. financial transactions and shipping.[257] Effects US sanctions against Iranian banks ironically ensured Iran's immunity from the global financial crisis. missile and many military exports to Iran and target investments in oil. the latest round of sanctions could cost Iran annually $50 billion in lost oil revenues.[260] In addition. officials.S. Chabahar and Kish Island should also assist in this process.[261] According to Iranian officials. copyright laws will have to be enforced in the country. banks.[259] Admittedly. Although the United States has consistently blocked Iran's bid to join the WTO since it first asked for membership.[254] In 1996. the United States ended its economic and diplomatic ties with Iran. a large-scale withdrawal from Iran by international companies as part of economic sanctions represents an "opportunity" for domestic companies to replace them. companies) from investing and trading with Iran in amounts of more than $20 million annually. Government passed the Iran and Libya Sanctions Act (ILSA) which prohibits U. the U.[258] According to U.S. saving the United States annually $76 billion (at the proximate 2008 world oil price of $100/bbl). among other prerequisites. — National Foreign Trade Council: "Normalization of Economic Relations" . Iran may lose $50 billion to $60 billion in potential energy investments. Opening Iran’s market place to foreign investment could also be a boon to competitive US multinational firms operating in a variety of manufacturing and service sectors. gas and petrochemicals. This will require a major overhaul of business and trade operations.[26] Sanctions notably bar nuclear. exports of refined petroleum products. the country was accepted in a goodwill gesture to ease nuclear negotiations between Iran and the international community. banned Iranian oil imports and froze approximately $11 billion of its assets.S. Iran has allocated $20 billion in 2010 to loans for the launch of twenty trade centers in other countries. This has led the UN Security Council to impose sanctions against select companies linked to the nuclear program.S. (and non-U. The country is hoping to attract billions of dollars worth of foreign investment whilst creating a more favorable investment climate through reduced restrictions and duties on imports. along with critical technology and know-how from major international companies. sanctions are making imports to Iran 24% more costly on average.[252] Should Iran eventually gain membership status in the WTO. thus furthering the country's economic isolation on the international scene.[256] Iran's nuclear program has been the subject of contention with the West since 2006 over suspicions of Iran's military intentions. as well as the Iranian Revolutionary Guard Corps.

259 (nominal). GECF.5% (2011).)[2] GDP growth 2.4%) . industry (41.) GDP by component Private consumption (36. (2011 estimates). the Iranian Rial's value has remained relatively stable.[5] (PPP.4% (2012 est.Iran Since adopting a managed floating rate in 2003. Iran's nominal GDP & projections (1999-2015 est. OPEC. 94th) GDP by sector agriculture (11%).)[1] Nominal: $475.236 billion (2011 est.)[4] GDP per capita $6.3%) (2010 est.052 billion (2011 est.[3] 3. WTO (observer) and others Statistics GDP PPP: $930. services (47.7%).) Economy of Iran Central Bank of Iran Rank 17th (PPP) / 26th (nominal) Currency 1 toman (superunit) = 10 Iranian rial (IRR) ( ) = 1000 dinar Fiscal year 21 March – 20 March Trade organizations ECO.258 (PPP). $12.

5% according to the Iranian government (2011 est. fertilizers.34 billion (31 December 2010 est.2% (2009) Imports $58. fruits and nuts (2%). telecom. Russia 5. Germany 9. electronics. China 14. construction.1%.7%.Government consumption (10. petrochemicals. cars (2%). technical services Main export partners China 16.7%) (2008 est. cement and other construction materials. South Korea 7. chemical and petrochemical products (4%).97 billion (2010 est.6% of GDP (2010 est.)[16] Credit rating B for sovereign risk (October 2010)[17] Foreign reserves $100 billion (2010 est. textiles.) Public finances Public debt 16. armaments Ease of Doing Business Rank 144th[14] External Exports $84.3%) Gross fixed investment (23.) (on exchange [15] rate basis.82 billion (72nd. power. home appliances. technical services Main import partners UAE 15%.075 billion (68th.6%) Imports of goods/services (−19.9 billion (2010 est. energy. South Korea 7. are in US dollars .7 million (2010 est. Japan 11. car manufacture. 2010) Abroad: $2.b.98 billion (2010 est.31 billion (2010 est.1% living below $2/day (2006)[10] Gini coefficient 0. not PPP) Expenses $89.). ferrous and non-ferrous metal fabrication. Italy 5. capital goods (35%). food processing (particularly sugar refining and vegetable oil production).7% living below $11/day (2006)[9] 3.)[11] Labor force 25.5%. India 13. Export goods petroleum (80%).)[12] Average net salary $500/month (2010)[13] Main industries petroleum.1%.36 (2009 est.)[18] Main data source: CIA World Fact Book All values.3%.5% (March 2012)[8] Population below poverty line 18.9%) Exports of goods/services (34.o.) (on exchange rate basis) Economic aid $121 million (2008 est.2%. foodstuffs and other consumer goods (19%).5%.)[6][7] Inflation (CPI) 21.1% (2009) FDI stock Home: $16. unless otherwise stated. pharmaceuticals.) f. 2010) Gross external debt $14.) Revenues $110. note: shortage of skilled labor Unemployment 11. caustic soda. Import goods industrial raw materials and intermediate goods (46%).o. carpets (1%).3%.b. Turkey 4.) f.

by creating 1 million new jobs unofficially: 12–22%.489 12 55 1995 185.473 1.974 2 38 1985 16.698.6% on average (2009–14)[75] Unemployment 11.928 569 5.Year (Source: IMF)[58] GDP.) 3.305 2. 7% by 2015.697.[73][74] BMI forecast: 3.094 43 64 2000 580.315 144 4.[76] 30% each year[73] according to opposition[77] 12% on average[73] Inflation rate 15% (as of January 2010) .6% 8% on average (based on $1.556 77 4.8% according to government.307 11.268 190 68 2010 (est.675 9.622 58 2.507 4 48 1990 35. current prices (billions IRR) Implied PPP Inflation GDP at PPP per capita Population conversion index (current international (million rate (average CPI) dollar) persons) (USD/IRR) (2000=100) 1980 6.396 377 75 Item 2010 (achieved) 2010–15 (target) GDP world ranking 18th largest economy by PPP[72] 12th in 2015[20] Annual growth rate 2.341 6.348 4.800 100 64 2005 1.1 trillion domestic and FDI).

2 million bpd[81] Some 2.5 million tpy of liquid fuel[88] Oil products storage capacity 11.1 million bpd Natural gas production N/A 900 million cubic meter/day[83] R&D projects in oil industry N/A implementation of 380 research projects by 2015 covering the enhancement of the recovery rate.7 billion liters[89] Electricity generation capacity 61.000 MW[90] .87% Oil price & $60 per barrel revenues in budget Oil production 4. gas conversion and hydro conversion.5%[7] $65 per barrel on average[73] / $250 billion in oil and gas revenues[79] in 2015 once the current projects come on stream.500 oil and gas wells should be drilled and commissioned.[82] R&D (% GDP) 0. in part to boost oil refining capacity [73][85] Petrochemical output ~50 million tpy 100 million tpy[86][87] Bunkering 25% market share in Persian Gulf 50% market share or 7.Value Added Tax 3% 8%[78] 2.[84] Share of non-oil exports 20% 30% ($110 billion) by 2015[73][78] Investment in oil and gas industry N/A $20 billion a year in private and foreign investment. International Monetary Fund projections: ~$60 billion only[80] 5.5 billion liters 16.000 MW 86.

30% of foreign trade and 80% of government transactions to be made electronically.000 billion rials[92] Crude steel production ~10 million tpy 42 million tpy by 2015[92] Iron ore production ~27 million tpy 66 million tpy by 2015[92] Cement ~71 million tpy 110 million tpy[92] 166 million tpy[92] Limestone N/A New industrial parks N/A 50 new industrial parks to be built by 2015[93] Ports capacity 150 million tons 200 million tons[94] Railways 10.000 kilometers by 2015 at a cost of $8 billion per annum.000 kilometers[95] 15.[67] Electronic trade N/A 20% of domestic trade.[96] .Efficiency of power plants 38% 45% [91] Investment in mining and industry N/A $70 billion/700.

[7] .[97] In recent years. Wheat. Agriculture contributes just over 11% to the gross national product and employs a third of the labor force. the most important crop.Mobarakeh in Esfahan is Iran's largest steel mill listed on the Tehran Stock Exchange. Iran has resumed its drive towards privatization and economic liberalization. is grown mainly in the west and northwest whilst rice is the major crop in the Caspian region.

Iran plans to generate 23.0 70.2 4.2 4. average (years) 70.) IRAN: Healthcare (Source: EIU)[192] 2005 2006 2007 2008 2009 2010 Life expectancy.4 Healthcare spending (% of GDP) 4.6 70.1 71.2 Healthcare spending ($ per head) 113 132 150 191 223 261 .[168] Iran's refining capacity (2007-2013 est.3 70. the United Nations classified Iran's economy as "semi-developed".2 4.2 4.9 71.000 MWh of electricity through nuclear technology by 2025 to meet its increasing demand for energy.Iran has a diversified and broad industrial base. In 1998.2 4.

Pistachios. net inflows (2000-2007). methanol. liquefied propane. .[202][203] Iranian exports in 2006. Map of the Economic Cooperation Organization (ECO) member states Foreign direct investment in Iran.The Tehran Stock Exchange has been one of the world's best performing stock exchanges in recent years. hand-woven carpets and automobiles are the core items of Iran's non-oil exports.

Turkey. UK. Spain.4 billion Africa Mauritius. the Netherlands.6 billion Europe Germany. Italy 253 and France (20 countries in total) $10.9 billion Americas Canada. Liberia and South Africa N/A $8 billion Australia Australia 1 $682 million . Singapore. the USA and Jamaica 7 $1. Indonesia 190 and Oman $11.Continent of origin Leading countries investing in Iran (1992–2008) Number of projects Total amount invested Asia United Arab Emirates (UAE). Panama.