Will new 5-year plan solve Iran’s economic problems?

June 13th, 2016

Awake Goy

In an interview on Iranian television earlier this week, newly re-elected Speaker Ali Larijani stated that “the economy would be a top priority for the new parliament” and that the finalization of the sixth Five-Year Development Plan would be treated with urgency.

The plan, which covers the period from March 20, 2016, to March 20, 2021, is still waiting for final parliamentary approval, as the outgoing assembly did not have enough time to debate the bill presented by the government last year. As such, the new parliament will have to discuss the detailed bill and finalize it as law. Considering the fact that there is greater affinity with the administration of President Hassan Rouhani in the new parliament, it is relatively safe to expect few changes to the text of the bill. The question is whether the plan includes those economic, structural and legal reforms that will be needed to generate an economic momentum in Iran.

As in previous planning cycles, the initial strategic goals of the plan were formulated by the Expediency Council and then issued as a decree by Supreme Leader Ayatollah Ali Khamenei. The original decree foresaw a number of objectives that have been addressed in a nuanced way in the final bill presented to parliament. Below, I will discuss some of the main features of the plan, especially contrasting the original objectives with its final text: