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Iran: Government's Jobless Figures Questioned

  • Vahid Sepehri

http://gdb.rferl.org/D30C9AD9-0960-4003-BF73-D7E1B4AC6589_w203.jpg --> http://gdb.rferl.org/D30C9AD9-0960-4003-BF73-D7E1B4AC6589_mw800_mh600.jpg The government's ability to create jobs has been crticized by conservatives and reformists (Fars) October 12, 2007 (RFE/RL) -- On October 7, the state-run Iran Statistics Center published a report saying the national jobless rate has fallen to 9.9 percent. While government supporters see the news as reflecting favorably on the government, whose economic performance has faced criticism from both conservatives and reformists, others question the figure or its significance, saying it might not reflect the realities of Iran's job market.

A member of the parliamentary Planning and Budget Committee, Adel Azar, responded to the news by saying that "it is impossible [that] unemployment should have dropped to a single-digit rate," the financial daily "Donya-i Eqtesad" reported on October 9. Azar said 11.5 percent is a more likely rate for the present Persian year.

The reformist daily "Etemad" expressed its doubts in a report on the nature of the new jobs on October 9 in light of previous official remarks. It quoted Labor Minister Mohammad Jahromi as telling IRNA in a recent interview that some 1.95 million Iranians had joined the workforce in the past two years, adding that 600,000 had formal work contracts with the requisite social and health assurance. The daily observed that Jahromi's remarks suggested that more than 1.3 million Iranians must be employed in irregular or informal jobs.

The daily expressed skepticism about reports by the Central Bank and Labor Ministry that the state's efforts to promote and support "small industries" or initiatives with swift returns had helped to create jobs in the year to late March 2007. It suggested that the government has created fewer than two-thirds of the jobs its plans had envisaged. The daily added that fewer than four in 10 of the projects outlined in bank-loan requests had been realized during the year.

"Etemad" criticized the government for devoting many of its allocations to job-creation projects in the housing sector, which it said is a source of unstable and seasonal jobs. "Etemad" observed on October 10 that -- with inflation creeping toward a possible rate of 25 percent in the coming months and Iran's ranking of 133rd in a table of global investment destinations -- the country is unlikely to have seen so many jobs created.

Numbers Don't Add Up

Economist Gholam Ali Farjadi noted a difference of 1.6 million in the numbers of employed for last year and this year, and said it was unlikely Iran had created so many jobs in 11 months.

Farjadi told the daily "Donya-i Eqtesad" on October 8 that the Iran Statistics Center had identified the working population at 23.5 million in October or November 2006, 20.5 million of whom were working and 12.75 percent or 2,992,000 of whom were jobless. He estimated the working population to be about 24.5 million, nearly 2.5 million of whom would be jobless if the government's 10 percent rate were accurate.

Farjadi cited 400,000 as the average annual job-creation figure in the 1990s, and 600,000 in the present decade. He said those averages "do not accord with the figure of 1.6 million job openings" and added that it was "unclear how one can create 1.6 million jobs in 11 months."

Farjadi's skepticism was echoed on October 9 by a member of the Expediency Council, Mohammad Baqer Nobakht, who asked a Tehran seminar on employment how the jobless rate could have dropped nearly 3 percent, from 12.75 to 9.9 percent, in a year, "Etemad" reported.

Economist and Isfahan University lecturer Mohammad Hosein Adib called the single-digit unemployment figure "the biggest lie in Iran's economy since the [1905] constitutional period," "Donya-i Eqtesad" reported. He challenged the government's methodology and indexes, including classifying running a household as a job.

Adib said that "if we do not include housekeeping as a job in line with international standards, the number of unemployed in Iran would actually go beyond 30 percent," donya-e-eqtesad.com quoted him as saying. He suggested Iran would have needed productivity or economic growth rates exceeding the United States and China to have created jobs for some 1.8 million new job seekers in the year to March 20.

Government's Policies, Unpredictability Blamed

In a reference to state expenditures as a principal source of jobs in Iran, Adib pointed out that the government had in the four months since late March spent a fraction of its funds earmarked for large-scale projects and devoted practically none of the money President Mahmud Ahmadinejad had promised in recent months for provincial development. Adib called it "unlikely, when the budget for provincial tours is more or less halted, that unemployment should have reached a single-digit rate."

Another economist and lecturer at Tehran's Sharif Industrial University, Masud Nili, told a seminar on October 9 that while single-digit inflation could signal a growing economy, double-digit inflation -- as in Iran -- "indicates economic stagnation and rising unemployment," "Etemad" reported. He blamed the state sector for hampering job creation and private enterprise.

Nili said the private sector arguably was not helping create many jobs in Iran due to an inherent instability in the economic and political environment and an inability to forecast long-term prospects. Nili said businesses could not predict "the government's economic conduct," adding that the government has stated its commitment to job creation in recent years, but effectively abandoned its stated purpose with its policies and intervention in the economy.

Looking Abroad For Accurate Figures

He argued that moves to fix and lower interest rates could encourage businesses to invest in capital-intensive projects, when the higher cost of money might have encouraged them to use cheaper manpower. He added that lower interest rates are in any case complemented by potentially cumbersome labor laws and government decisions to raise wages. Nili concluded that policies have pushed businesses to favor new technology over more workers.

Some newspapers and the ISNA news agency cited another batch of Iranian unemployment figures from September's Economist Intelligence Unit (EIU) report on October 10 and 11. ISNA reported that the EIU predicted a 12 percent jobless rate for Iran in the current year (from March 21), up slightly from the previous year's 11.6 percent -- perhaps rising to 12.5 percent and then nearly 13 percent in the following two years.

President Ahmadinejad's government has been criticized for its economic performance -- including an apparently slow implementation of set privatization policies and moves some say contravene previously approved development plans. The government intermittently defends itself with counterclaims, backed by its own figures. But those figures frequently fail to convince technocrats, independent economists, and even legislators -- as in the case of government figures and assertions on inflation.

Critics argue that the wealth of disparate figures and sources merely discredit the Iranian statistics, particularly anything cited by the government. Those same detractors say dubious figures merely oblige Iranians to turn to foreign sources for less flattering -- but possibly more accurate -- reports on their country.
The Iranian Economy

Buses being produced at a factory in Tehran (Fars)

IN NEED OF DIVERSIFICATION. Populist Iranian President Mahmud Ahmadinejad is having trouble fulfilling his promises to put the country's petrodollars on the plates of average citizens. Inflation and unemployment remain high and the economy is dominated by the energy sector.


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