Faramarz

مقصود بودجه ایران در سالهای ۱۹۷۰ بود

Well, I guess I created the confusion by using a term like GDP. The book is in Farsi and does not use terms like GDP or GNP.

The relevant point however is that when the price of a barrel of crude went from $9 in 1970 to $34 in 1974 (and the export level remained relatively the same) the money available to the government to purchase goods quadrupled and created a rich target for those who could have sold military products.

I totally agree with the point that corruption and bribery is a part of our rich culture and in this case the amounts were much higher (in $ millions) and in the case of the current Regime (in $ billions).

Anger Management 101

"Anybody can become angry - that is easy, but to be angry with the right person and to the right degree and at the right time and for the right purpose, and in the right way - that is not within everybody's power and is not easy." Aristotle

Are you stealing my ideas, now?

I mentioned auditing a few days ago on this site!

Anyhow, read the post again very carefully! And TRY to grasp the meaning as a whole and not in bits and pieces! And if you have questions try to ask them like a civilized person.

As I said yesterday, you have problems I cannot solve for you!

You even twisted and changed what I wrote to suit your attack on my post in a similar manner your Islamist counterpart does with people's posts on this site!!!

GNP, GDP ,...all these estimates are off at least %10 to %15

due to Informal Economy and all the activities within the Informal sector. The percentage for informal economy in today's Iran could be even higher than ten to fifteen percent due to Sepah and it domination in the national economy. 

To heck with the integrity of the operation,do whatever it takes

to get ahead. Right? Wrong.

Real people who have had real jobs and careers, in real corporate world, also have  had to deal with a thing called Audit (internal and external).

Now you're an Iranian, running a bussines or a department within a corporation, everyone waiting for you to make your first and last mistake, and your take is to treat honesty and fairness as metaphors?!? You give a new definition to professionalism.

What line of bussines are you in exactly? How many audits have you passed? Honesty and fairness as metaphors!?! Are you an MBA from the "Gordon Gekko Bussines School?"

I don't really know, GR.

A couple of decades ago when GNP was being replaced by GDP in the U.S. there was a lot of discussion about definitions and differences which finally settled down. Possibly there were ambiguities in the definitions which were eventually nailed down. Just a guess!

Thanks, Ari!

Is that definition US-specific or accepted worldwide? I know US sets the trends because of its huge GDP and because the related literature is in English! Where I am, they do differentiate between the two, but they also use GDP when they talk about the economy as a whole!

GR

GDP = Consumption + investment + government spending + (exports – imports).

GNP = Same as GDP + Net income from assets abroad.

For example the income to Iran from an Iranian baaghlavaa making plant in Israel (Iranian assets abroad) would count towards Iran's GNP but not towards her GDP. Exports isn't the distinguishing factor between GDP and GNP as it is included in both.

Source.

On Corruption!

The form of government has much less to do with corruption than is commonly believed. Corruption takes different forms not only because of the political system, but also cultural and individual traits and characteristics.

A former South Korean President committed suicide because of corruption. In South Korea corruption is common practice as it is in Japan. And they are democracies. Don't forget India!

As I have written before on this site, Japan has one of the worst systems when it comes to corruption. There have also been suicides among the Japanese officials related to corruption.

Remember Norwegian oil company, Statoil and Rafsajani's son's deal?

DK has mentioned Chirac. Italians are not immune from corruption, either.

I'd like to repeat something that I told a former NIOC high-ranking employee yesterday.

"You didn't know how rampant corruption was because as a young man you had no way of knowing it."

I told him the same thing more than twenty years ago when he had to take a position he did not want. He quit the company at the age of 50 because of his frustration with the born-again, bearded corrupt Islamists.

So, to those who haven't lived with real people in the real world and have spent all their lives in classrooms and behind typewriters or computers, I have this message:

Go start businesses and deal with real people out in the society and see how long it will take YOU to become corrupt yourselves.

It is easy to read books in the comfort of one's home and imagine the outside world in simplistic terms of black and white as it appears in the print. It is something else when you are doing business and see others around you getting ahead because of the relationships they have built with those in positions of power.

It is then that you start having real thoughts about how to get ahead, yourself. It is at that point when you start justifying what you do "wrong." And you start having second thoughts about the great metaphors such as honesty, fairness, etc.

Please don't give up your daytime jobs, yet!

Great Information Faramarz, Thanks!

Pahlavi regime was one of the most corrupt governments on earth, ran by people who put “Organized Crime”, the MAFIA to shame.   In fact in the late 60’s American Senate tried to find out some of the corruption that had taken place in the form of bribery to American corporations and personnel dealing with Iran and the Iranian government.   They, the US Senate, concluded that all leads  stopped, or DRIED UP, at certain juncture, making it impossible to go any further with the investigation.   Calling it the best SCAM they have ever seen, done by the Pahlavi Criminal Enterprise.   This same group of people brought us the second wave of criminals, namely Khomeini, Khamenei, and the rest.

To Aynak & Roozbeh_Gilani:

I could not agree with you gentlemen more, thank you for the blog!

To Add To Ari's Clarification!

When exports are included the term used is, GNP ( Gross National Product) as opposed to GDP (Gross Domestic Product). However, GDP has become an accepted common "mistake!"

Sorry Faramarz, I haven't read the blog, yet.

Shah Responds to Mike Wallece on 'Corruption' in his Country

Shah of Iran and Corruption in the Country

Speaking of 'Corruption' How about looking in the other courtyard too  ?:

Most Recent:

I'm going to read the book...

should be interesting.....

but to 'oversimplify' and say that whatever corruption was there led to the revolution is very naive.

there are many, many factors- the biggest, arguably, being shah's refusal to extend the 25 oil revenue contracts with the brits and carter.....also his lack of leadership in crushing khomeini and responding to the bs propaganda spread right under his nose in keyhan and other 'publications'

as far as corruption goes, unfortunately, you see it everyday with us iranians.....today, in iran, it is exponentially worse 

A thanks and a clarification.

Thanks for the review Faramarz. 

Iran's GDP in 1977 was around $75 billion--not $20 billion as cited by the book's author, according to your review. Our GDP includes export income (mostly oil) as well as other goods produced inside the country that we sell to each other. 

Confusing Iran's oil income with her GDP is a common pitfall even for educated Iranians. This type of error has lead to the impression in your review that almost half of Iran's economic output during the Shah was spent on the military, whereas the figure seems to be about 12% (still outrageously high by any country's standard except Saudi Arabia). A similar mistake is made when we hear that almost 80% of Iran's expenses are paid with oil money. This just means that 80% of the money that the government spends comes from oil, not 80% of the entire Iranian economy.

To see this more clearly, compare a nominal oil revenue of $75 billion distributed between 75 million Iranians. This allows the government to spend $1000 oil money on each Iranian every year--roads, defense, yaaraaneh, ekhtelaas... Surely individual Iranians make and spend more than this amount every year. Where is the rest of the money coming from?  A few dollars of it comes from other exports like carpets and such, but by far most of it comes from what we make and sell to each other inside the country--sikh kabab and such. 

How did I miss this book?

Interesting read Framraz. How could we buy the book. I googled the title in Persian nothing showed up. Iranbook.com?

Ali P. There's also one more thing that survives: old soldiers. Old soliders never die, they just fade away.

No one can EVER accuse Khomeini of corruption either!!

Dear Faramarz

Thanks for the review.  Not having read the book but your summary:   Corruption will rise in any society that rule of law takes back sit to any of the followings:  Dictatorship/Nepotism/Favoritism ... and in general : Lack of accountability is the main feed for corruption.

A society like ours can change, only with time and good ethical practices, with the rule of law above all else.  The reason I think in the minds of many the 53 coup was such a huge tragedy, is precisely because NO ONE EVER could accusee Mossadegh and his associates with corruption, including his British and U.S adversaries.     If you ever get a chance, please read a book by Mossadegh about the laws of taxes and how to implement a *clean* taxation system, where he outlines relience on tax revenues instead of oil etc.   So in some way, when that young tree was derooted, it was more like a whole notion of turning Iran to a less corrupt and better run country died.   By the same token, when all the power was then placed in the hands of Shah, again that lack of accountability was the most fetile ground for corruption.   

BTW, one significant difference between corruption in U.S and say Iran, is that once the corrupts are identified, the legal system will go after the offenders.   At a minimu, someone who does expose of such corruption is not murdered.   It is human nature to sway in the wrong direction perhaps, absent checks and balances.   But how it is dealt with once is exposed is a different story.   

Faramarz Jaan, what about the sheep and the Khar factors?

During the DOT.COM era, the sheep factor in America resulted in herds upon herds of people (i.e., sheep) rushing to their stock brokers and buying junk stocks using their salaries, savings, credit cards, home equities, etc.

Then, once the stock market crashed, all these sheeps left out on the streets with nothing but their underwear! These sheeps fell victims to the bankers, financiers, and stock market moguls hoping that they would all become millionaires one day!

On the other hand, the khar factor in the Iranian populace prevented them from catching up with the late Shah's modernization programs (e.g., modern Air Force, etc.)

The kharness of Iranians caused them go blind and fall victims to the Khomeini's promise for free naft, free homes, free bargh, free aabb, free gaz, etc.

The conclusion we arrive at here is that Khar = Sheep => Iranians = Americans!

Q.E.D.

..

Thanks faramarz khan

unfortunately back then the peoples in circle were able to 'BOLGHOR' some English,French or german to get the under the table bribes and now they only do it in ARABIC and in day light since its HALLAL.

Maziar

Thanks Faramarz for an interesting blog

I like how you compare what went on in 70s in Iran to over spending and wrong analysis by private companies during Dot Com era. 

Another issue dicussed in the book that you outlined in your blog and is important is where you wrote:" 

General Secord appeared to be a conduit between major US military manufacturers and Iranian military and even after the revolution he established a connection to the current Regime in Iran with his business partner Mr. Albert Hakim. The two partners and Colonel Oliver North of the Fox News were the masterminds of Iran-Contra affair that provided military equipment to the Islamic Regime and then channeled the proceeds to the Contras in Nicaragua who were fighting the Sandinistas. This was all taking place in the early 80’s when Rafsanjani, Khamenei and Mousavi (currently under house arrest) were running the show in Iran." 

Thanks for sharing.

Great blog Faramarz

My family, like many many ordinary iranian families  never benefitted from Iran's "corruption bubble of 1970's" and it's inevitable consequence, theFascist  islamist regime. They suffered by being imprisoned, tortured, executed. Why? Just because people like us had empathy with the vast majority  our compatriots who were not allowed to "share the loot"...

On a happier, personal note though, the "1990's bubble" was good for me. i was doing my post grad in engineering in Europe at the time  and had no problem finding research oppurtunities, funding and a furure job in US. But I was just lucky. There were many many people hundred times brighter than me who did not leave Iran as a teen ager and suffered the consequences....The painful memories of seeing & hearing of friends and family members being taken away by   criminals of  SAVAK and SAVAMA,  will always fill our hearts. Occasional looks through old family albums, The smiling, youthful pictures of those who were taken away from us  forever, just for their idealism, for their passion in books and music and litrature,  , will only makes people like myself appreciate how  Shah and Islamic regime's dictatorships were two sides of the very same coin.....   

"Personal business must yield to collective interest."

The conclusion is all mine

As he details in the book, he had some issues with some of his colleagues. He also praised some other ones.

Generally speaking, he did provide sufficient level of detail and not just hearsay.

Is this your conclusion or the book's?

The “corruption bubble” of the 70’s combined with Savak and a few other things burst in ’79 and brought us the disaster that we call the Islamic Republic."

If this is the book's conclusion then there is no suprise:General Barzin has had a grudge against his commanders so deep that after Iran's victory aganist the Iraqis he can't still see the wisdom of all those "disproportionate" military spending.

But if it yours, then, I suggest you write a book about it- with copyrights protected, so no one else come up with such conclusions LOL.

Sadly,...

In the Middle-east, leaders come and go, regimes come and go, and what always survives is corruption.