Hassan Mansoor is the Professor of Economics and Finance as well as the Program Advisor for Post graduate courses at Schiller International University of Paris. He graduated in the field of Economics with specialisation in Energy Economics from the university of London in 1979.
Since then he has been teaching at the universities of Tehran, Stockholm, London Westminster, American University of Paris, American Gradulate School of Paris, MBA Institute of Paris and the Schiller International University of Paris.
Hassan Mansoor has published 2o books mostly in the field of economics and Finance among which some translation of the great works of Schumpeter, Russell and Bottomore. He is at present working as the Professor and advisor in Economics and consults both Private business and Public Sector.

Question: The rise of Ahmadi-nezhad to presidential power on a wave of anti-freedom slogans flavoured with demagogical promises of economic green-pastures and “table-cloths coloured by petrol-money” indicates a considerable degree of un-clarity among the lower income Iranians about the relationship between the revolutionary and repressive policies on the one hand and the social and economic degeneration, on the other. Two questions arise:
a) What are the main features of Iranian economy today and
b) How would you describe the relationship between the democratic management of a country and resolving its economic problems?



Professor H. Mansoor: To be concise, the following few well-defined indices can be introduced to define the basic features of our ailing national economy:

The Iranian economy is among the underdeveloped or developing ones. Its position in the world can best be described by referring to its National Income per capita of ca $2,000 per year as compared to $5,000 per capita per year for an average citizen of the world. This doesn’t, of course define the distribution of wealth- which is very lop-sided. However, it shows, in its own right, the status of under-development for the country.

The Iranian economy is intensively and extensively a state-run economy. A dominant part of economic activities -80 to 90% of GNP- as well as some significant motors of economic activity are under a monopolistic control of the State: The economic activity is dependent on the State Budget while the budget is dependant on the oil income.

The economic activities are predominantly of “Rentier” nature with heavy reliance on the oil rent. The present government absorbs all the oil income in its budget and is more than ever dependent on a volatile energy market, which makes its position utterly fragile. The private sector, at a glance, is strongly dependent on the state and its finance. Productive activities are both risky and un-remunerative while colossal windfall incomes are reaped in archaic bazaar and through intermediations.

The system based on archaic tenets contains some modern elements, which suffer from dysfunction. But first and foremost, it is incapable of “reproducing” itself. It is nourished by sources rooted externally: for example, modern knowledge and technique of production has its roots outside this system and may not be reproduced internally. For instance, internet and modern communication technology is not generated by the tenets of this system while the system would cease to function without them.

The Low-quality of Human Capital is glaringly paralysing. The problem existed before the revolution but was only exacerbated during the 27 year after. During the last 60-70 years, economists have not ceased to emphasize the importance of Human Capital especially since the epoch-making discovery of Robert Solow to the effect that a predominant part of increase in national wealth was generated by the quality change in human capital rather than sheer increase in capital or labour. Since then the concept of Human Capital has made inroads in the economic literature and economists have put forward methods for its measurement and evaluation. However, Iranian economy suffers from a low degree of Human Development. A significant feature of present day Iran is that positions of responsibility, be it industrial or political, are occupied by criteria of allegiance and ideology rather that competence. Hence the great haemorrhage caused by one of the biggest currents of Brain Drain in world history.

Iranian economy is among the most non-transparent in the world. No statistics may be taken for granted. Any information or index has to be re-defined in order to reveal its secret to the naked eye. For example, the simplest of indexes concerning the rate of inflation, would only mislead the observer and bears no simple relationship to the real state of economy.

A significant feature of Iranian economy is its paralysis in financial Sector. Finance and Banking are crippled and become dysfunctional due to the dominance of some archaic and unqualified mediaeval ideas. You may continue the list, but I feel I should stop here due to the time limit.

To turn to the relationship between Freedom and Economic Affluence: one doesn’t need to be very knowledgeable to understand the relationship between the two. A glance at the world would suffice: from the North America to Europe, from the Latin America to Asia and Africa, the most affluent countries of the world are among the most free of them while the most backward countries are among the despotic and dictatorial ones: from Luxemburg to Norway, from the United States to the United Kingdom and France, where Human dignity is respected the economies are also affluent. In contrast, where Human Beings do not enjoy intrinsic dignity under any kind of despotism be it proletarian, theocratic or other, the economy is also ailing; corruption flourishes and poverty reigns. Iran today suffers from the most despotic, most corrupt and most degenerated forms of government. Despotism combined with multipolarity gives it the character of a caterpillar. This despotism stands in contrast with objective possibilities of development and freedom for the country. We have demonstrated that Iran of today could be among the category of nations enjoying a national income per capital exceeding $10,000. This was a real Possibility. While Iran today has a GNP per capita of ca $2,000; has lost numerous historical opportunities for development and suffers from a poverty in strategy. The Modern Times is based on the dignity of Human Individual. The founding fathers of the Modern System like John Lock, have some 300 year ago, emphasized the principle of primacy if Human Individual and its rights; the modern economics is defined on the principles of individual choice, of utility maximisation; of optimisation of resources and uses. The heart of this economics is Human Freedom and Democracy. No doubt, a country suffering from poverty may not perceive the primacy of Freedom and Democracy but this does not invalidate the fact that Freedom is as vital for an Iranian as it is for a modern man. And subsequently, the political concomitant of individual freedom, i.e. Democracy, whereby the governments representing the will of the majority and bound to respecting the rights of the minority, are subject to alternance and this very principle is the point of departure for modern economics. Modern Economies and Democracy are two sides of a single coin.

- Thank you Professor Mansoor

Professor Mansoor: I am grateful for the time and attention.