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Iran addresses legacy of rents in economy

The role of foreign exchange, fuel smuggling and commercial rents are all under scrutiny.
EDITORS' NOTE: Reuters and other foreign media are subject to Iranian restrictions on leaving the office to report, film or take pictures in Tehran.

An exchange currency dealer sits at his shop as he waits for customer in Tehran's business district October 24, 2011. Iranian media reported last week that monetary authorities had reversed a six-month-old decision to cut interest on bank deposits, aiming to mop up excess cash in the economy and halt a dangerous rise of inflation. The news made sense to econom

Experts agree that Iran’s path out of its current economic situation will have to include a growing focus on private sector activity as a source of employment and economic growth. While private sector players face a host of challenges due to outdated regulation as well as the dominance of governmental and semi-state companies in the economy, they also face an unlikely challenge from society at large.

A recent poll by a televised economic program (“Payesh”) asked: “How have Iran’s wealthy individuals become rich?” While 83% responded, “Through rents and connections,” 12% believed that the wealthy had achieved their success through their own hard work and 5% considered “luck” to be the main reason.

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