Focus
Wed, May 18, 2005
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People’s Participation
Rewriting Subsidies

People’s Participation
The past decade has witnessed an increased interest among policy-makers, scholars, and advocates in expanding and deepening citizen participation processes, particularly in community and economic development activities.
Modern-day administrations have philosophized about the idea of a “citizen centric“ government. They have worked on numerous citizen participation initiatives.
In democratic theory, popular sovereignty refers to the capacity of a people for independence and self-government.
Expanding and deepening citizen participation is a way to make democracy more democratic Ñ that is, direct, deliberative, and participatory.
Many believe that governments which reach out to citizens likely will gain credibility from greater openness, transparency, and responsiveness.
When a government is credible, citizens will support government programs, projects or initiatives. Today, much social science research finds a public increasingly alienated and disconnected from governments at all levels. Less than half of registered voters have bothered to show up at the polls over the last 40 years.
Re-engaging alienated citizens is a challenge to those who seek to restore governments’ credibility.
The most sought-after product of citizen participation and the least controversial is the opportunity it provides to allow citizens to give valuable input on how programs or policies should be crafted, how well they work, and how they might be improved. The notion is that citizens as consumers are best positioned to answer these questions. A major development in this area is the citizen satisfaction survey in which government asks a representative group of citizens formally for feedback on services, in the same way that businesses do. Many community development agencies, for example, periodically survey citizens to gain insight into their needs and expectations.
Accountability of public officials for the decisions they make and the services they provide is a major goal of citizen participation processes. If citizens have a say in government, they can influence decisions more frequently and more specifically than simply voting in elections. Public officials who know that citizens are engaged likely will make better decisions.
People with low and moderate incomes, particularly those living in slums or blighted areas, represent a special focus.
At the local level, few communities mandate specific citizen participation processes, except for hearings on budgets, land use planning and the like. Most citizen participation activity is mandated by either federal or state law or regulation.
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Mohammad Sattarifar is one of those economists who advocate the concept of citizen participation for achieving development. He says self-sovereign citizens can act as the driving engine behind the process of development.
Sattarifar has held many top positions in the government. His views and beliefs have undoubtedly helped shape macro-level economic and development policies. His capacities have included heading the Social Security Organization and the Planning and Management Organization.
In a recent interview with weekly Atieh, Sattarifar said how citizens equipped with justice (in power and wealth) and freedom can contribute to an all-progressive society:

Role & Responsibility
Today the role and responsibilities of governments, both in developed and developing countries, have simplified compared to the past, he says.
The focus in advanced countries is on rendering quality services to the public and good governance. A development-oriented government benefits from transparency, accountability, respect for human rights and its pro-democracy endeavors.
He points out that classical economists such as Douglas North believe “good governance“ automatically paves the way for economic progress.
According to the 1994 Nobel laureate governments are ultimately responsible for success or failure of national drive towards development.
This view holds that governments are not to involve themselves in executive matters but lay the policies for maximum use of potentials and implementation of development-oriented policies, Sattarifar notes.
“Broad-based development requires a set of preconditions. A government committed to this concept is one which is capable of creating economic and social capacities, is highly adaptable to changing conditions at national, regional and international levels, promotes justice and freedom for all, and strives for rule of law“, he adds.
Such governments hold themselves accountable to providing adequate levels of education, health and social security services to their people through laws, while at the same time allowing for public participation in state affairs and formation of a civil society.
He further says the notion of government here applies to the system as a whole which comprises of the three branches and its subdivisions.
“A government capable of enhancing the available potentials is able to meet the people’s basic demands. An adaptive government is one that upgrades policies and laws and keeps in tune with time’s demand. It makes constant attempts to improve performance by monitoring the activities of state and non-state affiliated bodies and makes rearrangements in power structures when necessary.“
At the higher level, the government works for freedom and justice. Justice covers equality in wealth and power.
Evolving governments work closely with the market, civil institutes and the people at large. They share their responsibilities with the people and are their coworker rather than rival, he points out.
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Mohammad Sattarifar
Ultimate Goal
The ultimate goal is to achieve political and economic freedom and justice merely to survive. Humans by nature are in constant struggle to progress. This is an innate characteristic.
To what extent governments succeed in progress depends on how well they preserve and promote justice and freedom.
Accordingly, mankind is the starting point for embarking on the mission.
“Only those persons can bring about development equipped with freedom and justice to a fair level. They are hence called capable citizens“, he observes.
Once forming the bedrock for initiating development programs, governments should form united working parties dedicated to development values.
In other words, they should adopt a unified approach towards concepts such as power, citizenship, security and freedom, according to Sattarifar.

Competition
Competition, by itself, could for some reasons intensify inequality in society such as widening the gap between the poor and the rich. Only a society blessed with justice and freedom can compete on a healthy and constructive basis.
The ruling system in Iran lacks a unified approach towards the most crucial concepts. Moreover, the government considers itself a superior authority and the sole decision-maker naturally reducing chances for the citizens to participate in the simplest of affairs, he says.
The spirit of teamwork does not exist and therefore the people often consider the government as their rival rather than partner.
As a result, political offices act on factional and personal predispositions.
Definitions as to freedom, justice and rights of citizens differ if not stand in contradiction within the political establishment at the leadership, parliamentary, and presidential levels, he adds.

No Understanding
Lack of understanding and agreement of the most basic principles of political and economic growth has caused most macro development plans to deviate from their right path and even produce the opposite results.
In most cases it is the way polices are handled and implemented that causes problems because these polices are in nature target-oriented and well-planned.
“Lack of commitment to and skepticism, at the official level, to common and globally recognized development principles continue to strike down such policies in this country because in addition to competent laws, we also need capable managers to implement them successfully,“ Sattarifar says.
The economic strategy of successful governments aims to improve growth and employment by creating economic stability based on low inflation and prudent government borrowing, and a better environment for long-term investment in industry, infrastructure, science and technology, and education and training.
Such economy is based primarily on private enterprise which accounts for a great portion of both output and employment.
“To establish justice in the economic field, all the avenues of economic exploitation must be closed and an economic system that will ensure justice and fair play between man and man, between different classes and regions must be established“, he stresses, adding that the ultimate goal, as mentioned, should be establishment of economic and social justice.

Rewriting Subsidies
One of the biggest economic hurdles is the existence of double pricing mechanism for goods as determined by the government and the free market, plus the unfair allocation of subsidies.
Inefficient allocation of funds, increase in consumption levels, wastage of resources as well as smuggling of goods and economic corruption are some of the current challenges for the country as a direct consequence of double-pricing of goods, according to ISNA.
In addition, subsidies which are given to consumers are not goal-oriented either. Subsidies such as those for petrol only benefit the well-off or vehicle-owners. They don’t include the poor and low-income households who may not have cars.
According to official statistics, 30,000 billion rials of subsidies go for basic goods, with 75 percent for bread and 25 percent for other products such as rice, oil, medicine and sugar. Allocation of a great portion of government budget for such subsidies leads to wastage of national resources and hampers economic development.
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The total amount of subsidies in government’s annual budget comprises around 20 percent of GDP and could reach 40 percent if non-government organizations and many other entities are also included. Subsidies in Iran are way too high and cannot be easily ignored. The rich are always better off in terms of subsidies as they consume much more petrol than the poor. Petrol is imported into the country at far higher prices than the rate at what it is sold thanks to subsidies.
The plan to have cash subsidies is designed to overcome inefficiency in the production sector and to reinforce participation of the private sector in economic activities. Government officials are of the opinion that the huge mountain of subsidies eludes the underprivileged classes because the rich get five times more subsidies than the poor. They argue subsidies should be eliminated and the focus should be on social justice in the form of fair distribution of wealth and income.
According to government officials, the total amount of subsidies for the current year stands at around 40,000 billion rials, of which 18,928 billion rials is for wheat, 7,712 billion to coupon products, 5,964 billion to state-run organizations and agriculture, 1,879 billion to producers of goods and services and 1,981 billion to price differences in goods and services to help control the market. In addition, 1,605 billion rials has been earmarked for price differences of goods and services with official price tags, as per Article 30 of the Fourth Development Plan, and 1,406 billion has also been allocated to compensate losses in guaranteed purchase of oil seeds and sugar.
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Almost 30,000 billion rials of subsidies go for basic goods, with 75 percent for bread and 25 percent for other products such as rice, oil, medicine and sugar.
In the 20-Year Perspective, the Islamic Republic of Iran has been projected as a developed nation ranking first in terms of economy, science and technology in the region through effective interaction and dialogue in international relations. It seems major reforms in allocation of subsidies could be a huge step towards realization of such a long-term objective.