Majles' conservative majority reversed plans for reforms aimed at decreasing the role of state in the economy by re-writing several provisions of a five-year development plan, which had been approved by its predecessor, but rejected by the conservative Guardians Council. The Khatami government said the revisions have made the plan "unworkable."
August 17, 2004 - The conservatives-dominated Majles voted on Sunday to reverse several provisions of the fourth five-year economic development plan, rolling back attempts to expand the economy and promote growth through a combination of foreign investment and privatization. The provisions would have allowed the government to privatize the state banking monopoly and allow foreign banks to operate in Iran. Another provision, allowing successful foreign oil prospectors to exploit their own finds, was also scratched.
The Khatami government's development plan "was not based on social justice, but on excessive capitalism and privatization," conservative MP Hamid-Reza Hajibabai said. The plan had been approved by the previous reformists-dominated Majles, but the Guardians Council it found some of its provisions contrary to the Islamic Republic constitution and Islam.
The changes made the plan "unworkable," cabinet spokesman Abdollah Ramezanzadeh said, adding that reaching the growth rate of 8 percent, provisioned in the plan, would become more difficult if Majles revisions were to take effect. "The government will not accept any responsibility for any future shortcomings in people's livelihood," he added.
"The fourth five-year economic development plan is not what Khatami had submitted to the previous Majles," Radio Farda/'s Paris-based economic commentator Fereydoun Khavand says.
The 4th plan, regardless of its flaws and not withstanding the fact that such long-term plans no longer meet the needs of the 21st Century, was drafted by those who wanted to speed the privatization process and open market economic reforms, he adds.
Contrary to popular belief, the leftist reformist faction of the Islamic Republic supports open market and privatization, while the conservative right is for preserving the state domination, he says.
Most provisions reversed by the Majles were aimed at removing the obstacles to privatization of state-owned enterprises and ending state economic monopolies, Khavand adds.
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