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Six keys to economic reform in Iran

Iran meeting its target of 8% economic growth depends on how it handles six challenges that so far have hindered Iran’s economic development.
TEHRAN, IRAN:  A partial view shows Tehran Stock Market 26 June 2005. Iran's president-elect Mahmood Ahmadinejad intends to offer Iranians free shares in state-owned enterprises and slash interest rates for corporate investment, a close aide said. The aide also played down the importance of fluctuating price movements on the Iranian bourse, where investors have been jittered by the lack of a concrete economic plan offered by Ahmadinejad. AFP PHOTO/PATRICK BAZ  (Photo credit should read PATRICK BAZ/AFP/Getty

On June 8, during the commencement of the International Exhibition of Exchange, Bank and Insurance, Iran’s first Vice President Eshagh Jahangiri announced that the country needed an 8% annual economic growth and a 12% yearly increase in capital investments to generate the jobs required for a healthy path of development. He identified financing as the missing link in Iran’s economic development and called upon the financial sector to develop instruments to spread the burden of financing economic projects onto more institutions than banks.

There is no doubt that an improved financial sector would facilitate Iran’s economic development. However, there are a number of other missing links that will require sustained attention from the government and appropriate reform to prepare the ground for achieving the targeted economic growth.

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