Description: Iran - Medium Term Framework for Transition : Converting Oil Wealth to Development

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Iran - Medium Term Framework for Transition : Converting Oil Wealth to Development

Iran is about 10 percent of Gross Domestic Product (GDP) off an economic equilibrium that will reduce unemployment and improve significantly people's welfare by converting oil wealth into sustainable development. 1) It is about 10 percent of G...

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Bibliographic Details
Main Author:	World Bank
Language:	English en_US
Published:	Washington, DC 2013
Subjects:	ECONOMIC GROWTH REFORM POLICY PRIVATE SECTOR FINANCING PRIVATE SECTOR DEVELOPMENT PRIVATE SECTOR PARTICIPATION REVENUE MOBILIZATION UNEMPLOYMENT PUBLIC EXPENDITURES OIL REVENUES FISCAL POLICY TRANSITION ECONOMIES GROSS DOMESTIC PRODUCT MACROECONOMIC STABILITY ENERGY SUBSIDIES ADJUSTMENT POLICIES AGRICULTURE BANK LENDING BARREL OF OIL BARRELS OF OIL BONDS COMPENSATION SCHEMES COMPETITIVENESS CONSUMER PRICE INDEX CONSUMER SURPLUS CONSUMERS CONSUMPTION LEVELS CPI DEBT DEVELOPMENT STRATEGY DISCOUNTED VALUE DIVIDENDS DOMESTIC ENERGY ECONOMIC CONSTRAINTS ECONOMIC DEVELOPMENT ECONOMIC EQUILIBRIUM EFFICIENT ENERGY USE ELASTICITIES ELASTICITY ELASTICITY OF SUBSTITUTION ELECTRICITY END-USE END-USE ENERGY END-USE ENERGY EFFICIENCY ENERGY CONSUMPTION ENERGY COSTS ENERGY DEMAND ENERGY EFFICIENCY ENERGY INTENSITY ENERGY PRICES ENERGY RESOURCES EQUILIBRIUM EXCHANGE RATE EXCHANGE RATES EXPENDITURES EXPORT MARKETS EXPORTS FINANCIAL SECTOR FREE TRADE FUEL FUEL OIL FUEL PRICE GAS GAS PRODUCTION GAS RESERVES GAS RESOURCES GDP GIRLS GROWTH RATE HIGH UNEMPLOYMENT HOUSING IMPORTS INCOME INCOME DISTRIBUTION INEFFICIENCY INFLATION INTEREST RATE IRON ISOLATION LABOR FORCE LABOR PRODUCTIVITY LENDING RATES METALS MINES NATURAL GAS OIL OIL COMPANY OIL ECONOMY OIL EQUIVALENT OIL PRICE OIL PRICES OIL RESERVES OIL SECTOR OPEC OPEN TRADE OPPORTUNITY COSTS OPTIMIZATION ORGANIZATION OF PETROLEUM EXPORTING COUNTRIES PETROLEUM POLICY MAKERS PRICE CHANGES PRICE INCREASES PRIVATE SECTOR PRODUCERS PRODUCTION COSTS PRODUCTIVE ASSETS PRODUCTIVITY PRODUCTIVITY GROWTH PUBLIC GOODS PUBLIC SECTOR RESOURCE ALLOCATION SAFETY SAVINGS SUSTAINABLE DEVELOPMENT SUSTAINABLE GROWTH TARIFF BARRIERS TAX RATES TAXATION TECHNICAL ASSISTANCE TELECOMMUNICATIONS TRADE BARRIERS TRANSPORT COSTS TROUGH UNEMPLOYMENT RATE VALUE ADDED WEALTH WELFARE LOSS WORKERS WORLD TRADE ORGANIZATION WTO
Online Access:	http://documents.worldbank.org/curated/en/2003/04/2352867/iran-medium-term-framework-transition-converting-oil-wealth-development-economic-memorandum http://hdl.handle.net/10986/14762

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Summary:	Iran is about 10 percent of Gross Domestic Product (GDP) off an economic equilibrium that will reduce unemployment and improve significantly people's welfare by converting oil wealth into sustainable development. 1) It is about 10 percent of GDP short in the additional savings and investment needed to attain growth that will reduce unemployment. 2) Optimal management of Iran's oil to provide the above needed savings and achieve an optimal balance between consumption and savings that will sustain the benefits from oil after it is exhausted, requires that it allocate about 10 percent of GDP more for savings and investment and less to consumption from its oil wealth. 3) That 10 percent adjustment can come from the reform of Iran's inefficient energy subsidy system, which also happens to average about 10 percent of the GDP a year. These expenditures can be transformed into budget surpluses that will provide ample credit to the private sector to grow. This adjustment -at the core of Iran's medium and long term fiscal strategy- is a main pillar of Iran's transition to a market economy led by the private sector. Hence, the critical importance of alternative management strategy of oil wealth in providing the needed additional savings to enable private sector financing and promote the transition to a private sector led economy.