Coursera: Constitutional Struggles in the Muslim World Week 5 Assignment: Irans biggest problem

Iran Ch allenges of the Future Report by Andreas Ude

Irans most pressing problem is to create jobs for their large young generation.
About 22 percent of young Iranians 15-29 are unemployed. 1 Over 60 percent of Irans 80
million people are under 30.2 This youth bulge - typical for the Middle East - played a
central role in sparking protest movements during the Arab spring. The oppressive regimes of
Tunisia, Egypt, and Libya were brought down by their countrys disillusioned young
generation who had two main grievances: unemployment and corruption. 3 The same
problems young Iranians complain about.
What is more Iranian youth are among the most politically active in the Islamic world. As the
most restive segment of Iranian society, the young also represent one of the greatest longterm threats to the current form of theocratic rule. 4
Another reason to tackle youth unemployment gives the very Constitution of the Islamic
Republic:
it is the responsibility of the Islamic government to secure equal and appropriate
opportunities and employment for all individuals. 5
Taking the high youth unemployment into account, the Iranian government failed by its own
standards.
But how do you create jobs? Economic theory says by economic growth. A growing economy
needs more human labour which reduces unemployment.

1 Omid Memarian and Tara Nesvaderani, The Youth , published 2010 updated August
2015, http://iranprimer.usip.org/resource/youth (accessed January 3, 2016).
2 Omid Memarian and Tara Nesvaderani, The Youth ,
http://iranprimer.usip.org/resource/youth (accessed January 3, 2016).
3 Michael Hoffman and Amaney Jamal, The Youth and the Arab Spring: Cohort Differences
and Similarities, Princeton University,
http://mthoffma.mycpanel.princeton.edu/Hoffman_Jamal_MELG.pdf (accessed January 3,
2016).
4 Omid Memarian and Tara Nesvaderani, The Youth,
http://iranprimer.usip.org/resource/youth (accessed January 5, 2016).
5 Constitution of the Islamic Republic of Iran, Preamble, Economy is a Means not an End,
http://www.wipo.int/edocs/lexdocs/laws/en/ir/ir001en.pdf (accessed January 3, 2016).
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Coursera: Constitutional Struggles in the Muslim World Week 5 Assignment: Irans biggest problem
Iran Ch allenges of the Future Report by Andreas Ude

The easiest way to expand the Iranian economy would be to fulfil the nuclear deal and avoid
sanctions that way. Irans GDP is 15-20 percent smaller than it would have been without the
sanctions.6 15-20 percent are a lot of missed job opportunities.
But in order to secure long-term sustained economic growth, further steps of serious
economic reform have to be taken.
Irans economy is dominated by a large public sector. 60% of the economy is centrally
planned.7 The state has to transform from being a provider of growth to an enabler, with the
private sector its engine i. e. to change from a centrally planned economy to a market
economy, as successfully done in China. 8
Giving up direct influence in the economy does not necessarily mean the loss of political
power as the Chinese model shows. Despite unbridled capitalism revolutionizing the country
the Communist Party of China still wields absolute power.
Finally there are some impediments to put the suggested measures into action:
For Iran to stick to the agreement of the nuclear deal and therefore cut back on their
cherished nuclear programme will be hard.
The Islamic Revolutionary Guard Corps, Irans most powerful security and military
organization, are at the same time Irans largest economic force, controlling about one third
of Iran's economy.9,10
Making the Guards giving up their economic activities will be difficult.
6 Iran's Economy, By the Numbers, http://iranprimer.usip.org/blog/2015/may/11/irans-economy-numbers
(accessed January 3, 2016).

7 Wikipedia contributors, "Economy of Iran," Wikipedia, The Free Encyclopedia,

https://en.wikipedia.org/wiki/Economy_of_Iran (accessed January 3, 2016).
8 Wikipedia contributors, "Transition economy," Wikipedia, The Free Encyclopedia,
https://en.wikipedia.org/w/index.php?title=Transition_economy&oldid=696554554 (accessed
January 3, 2016).
9 Wikipedia contributors, "Economy of Iran," Islamic Revolutionary Guard Corps, Wikipedia,
The Free Encyclopedia, https://en.wikipedia.org/w/index.php?
title=Economy_of_Iran&oldid=696376033 (accessed January 5, 2016).
10 Alireza Nader, The Revolutionary Guards,
http://iranprimer.usip.org/resource/revolutionary-guards (accessed January 5, 2016).
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Coursera: Constitutional Struggles in the Muslim World Week 5 Assignment: Irans biggest problem
Iran Ch allenges of the Future Report by Andreas Ude

The Religious Foundations known as bonyads control over 20% of the GDP 11 and are seen
as overstaffed, corrupt and generally unprofitable. Exempt from taxes, highly subsidized,
siphoning off production to the black market and providing inadequate charity to the poor

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they have been called a major weakness of Irans economy.13

Reforming or best dissolving the bonyads will be a daunting task.
Despite these obstacles the Iranian government has to see the proposed measures through
in order to reduce youth unemployment massively and lead the young generation back into
the fold of the Islamic Republic.

11 Gross Domestic Product

12 Wikipedia contributors, Bonyad, Wikipedia, The Free Encyclopedia;
https://en.wikipedia.org/w/index.php?title=Bonyad&oldid=697052601 (accessed January 5,
2016).
13 Wikipedia contributors, "Economy of Iran," Religious foundations, Wikipedia, The Free Encyclopedia,
https://en.wikipedia.org/w/index.php?title=Economy_of_Iran&oldid=696376033 (accessed January 5, 2016).

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