Morteza Aminmansour
Seattle, WA, USA



Persian Gulf Economy, Environment, Urbanization:
Part I
IRAN: With a population of 71 million, and a GDP more than 115 billion, Iran is the second most populous country and the second largest economy in the middle –eastern region. It is also second largest OPEC oil producer and has the world second largest
Reserves of gas. In the recent year Iran has given strong and special emphasis to human, social protection. As a result of major investments in the social sector over the last
Few years with virtually universal education extensive health coverage, an active distributive strategy through direct transfers and indirect subsidies Iran is now at the closing of the gender gap in education, where the enrolment rate for boys and girls show only small differences. In literacy and in political representation, however, there are development changes. The country suffers from a significant prevalence of poverty and a significant rate of unemployment. Iran does have an extensive social safety net and transfer system that reaches a large number of the poor these include education scholarships and health and social security coverage. Iran’s central position has made it a crossroad of migration.
The Population explosion in the countries like Iran and Egypt is experienced.
From economical perspective in many countries like (Iran, Persian gulf states) children are viewed as capital goods to help with the labor force.
From social perspective children provide security for the aged parents.
From cultural perspective children are viewed as gifts from god (they add to number of following the religion (Islam, Judaism).
Because of economical difficulties Iran suffer the lack of:
*Investment in public health to reduce infant mortality
*Improve female education and labor force participation
* Family planning (educates the poor about the population problem and provides contraceptive at minimal cost.
*Increase employment and income
*Improve income distribution: increase income share of the poorest 40% of the population.
However, people may resist family planning because of:
*Lack of education and understanding of the population problem
*Ideology: overpopulation is a capitalist problem
*Religious belief: Contraception and /or abortion are not permitted.
Human capital formation is central to economic development. It has been the major factor in explaining rapid and sustained output growth.
Human capital formation improve the quality and productivity of labor in the form of:
*Technical and vocational training

*On –the-job training

*Formal education at the elementary, secondary and higher levels
*Adult education: extension programs in agriculture
*Migration: internal (rural-urban – and urban-urban) external (the brain drain)
If the Iranian government is not capable of solving the economic problems, the economic problems could ultimately overwhelm the government.
Iran’s economy can be called “chronic illness” after two decades of economic mismanagement a widespread sense of urgency has left them increasingly exposed
Iranian economy is a centrally controlled economy that enjoys little foreign investments.
Only one-fifth of Iranian economy is in private hands.
The lack of economic security is visible in the Iranian economy sector.


Iran is in spite of great achievements in the provision of education opportunities, the quality of education has remained below the desired standards and massive investment
In human capital has not fully contributed to social, economic, and political development. Some of problems include:
Shortage of qualified teachers and administrators and materials
Lack of emphasis on critical thinking and analytical skills development
Expansion of educated unemployment and underemployment due to limited labor absorptive capacity of the economy
Increase income inequality since higher education is generally available to the already affluent people
Inability to accommodate foreign educated professionals ,contributing to the brain drain
Economic development will take place as a result of structural transformation from a rural-based agrarian to the urban-based industrial economy. Urbanization rate and GDP per capita are positively related. High-income countries such as UAE, and Kuwait are more urbanized than the middle-income nations (IRAN, Saudi Arabia, Bahrain) and low – income nations (Egypt, Sudan, Morocco).
The Iranian economy seems to be divided into two sectors:
Urban (modern or industrial) and rural (traditional or agricultural)
In Iran the marginal productivity of labor is very low in rural sector.
Productive activities in the urban sector result in an increased demand for labor and thus offer a wage rate well above the rural subsistence rate. Such a wage differential attracts the rural labor force to the urban sector. The profit in the urban sector is now quite since the urban wage rate is slightly above the rural subsistence wage rate.
Urbanization in the countries like Iran and Turkey has been very rapid grown.
People moved from rural areas into urban areas in search for better job and future
With higher paying rate and better living conditions.
The urbanization has also created major problems in the capital and major coties.\
The problems in this field are:
1) Unemployment and underemployment
2) Congestion and pollution.
3) Insufficient accommodation such as housing and transportation
4) Possibility of political unrest.
Iran does have major problem with brain drain large numbers of educated people emigrated to western countries and United States in search of better economical opportunities and socio-political security and freedom.
The massive outflow from countries such as Iran.
Iranian are typically skilled and semi-skilled workers to make higher wages gain legal resistance.
The cost of human capital emigration is greater than expected. These resources could be used in educating or training the emigrants.
Benefits of their labor are realized be the host country as they participate in economic activities. In some cases the migrant workers commended high wages. The politic of Persian Gulf states were to replace Arab migrant workers with workers from south and East Asia since they are willing to work for lower wages and do not interfere in internal political situation of the host country. And do not advocate political change
And stay only for a period of time for the contracts, which they are obligated.



Iran’s economy, which relies heavily on oil, exports revenues (around 80% of total earnings, 40%-50% of the government budget, and 10% - 20 % of GDP).
A rapidly growing, young population with limited job prospects and high levels of unemployment. A significant external debt (including short term debt), high levels of poverty, expensive state subsidies on many basic goods, inefficient public sector and state monopolies which control quarter of the economy.
The country is attempting to diversify by investing some of its oil revenues in other areas like petrochemicals.
Iran is hopping to attract billions of dollars worth of foreign investment to the country by creating a more favorable investment climate. The variety of measures need to be involved including better constitutional amendments with reduced restrictions and duties on imports
Iran holds 90 billion barrels of proven oil reserves. The vast majority of Iran’s crude oil
Reserves are located in giant onshore fields in the Khuzestan region near Iraqi border and Persian Gulf terminals.
Iran is OPEC’s second –largest oil producer with average crude oil production of 3.6
Million bb/d. (the year 1999). Iran’s productions capacity is estimated as high as 4 million bb/d, but this figure is controversial .In 1974 Iran has produced 6 million bb/d by using methods which have permanently damaged the fields.
The 1987 petroleum Law permits the establishment of contracts between the ministry of petroleum, state companies and local and foreign natural persons and legal entities.

In 1998 the oil ministry announced invitations to bid on 43 petroleum projects worth some $8 billion in what has come to be known as the “buy back” contract. Several US
Firms are reportedly interested in the buy back offers, including Arco, Unocal, and Chevron, mobile.
The first major project under the buy back investment became operational in October 1998, when the offshore Sirri an oil field (operated by Total and Petronas began production at 7,000 bb/d), Sirri is now producing more than 20,000 bb/d.

As of 2000, Iran had nine operational refineries with a combined capacity of 1,47 million bb/d. In order to meet burgeoning domestic demand for middle and light distillates, Iran imported refined products and is attempting to boost its refining capacity to more than 2 million bb/d.
Iran largest non-associated natural gas field is south pars and identified in 1988 and appraised at 128 TCF in the early 1990’s.
Although domestic gas consumption is growing rapidly, including use as a motor fuel, Iran continues to promote export markets for its natural gas. Iran is attempting to attract US and European Private investors for planed privatization of the country’s Power
Generation industry to break up the state monopoly into competing private companies and reducing large state subsidies.
The international atomic agency predicted that Iran would be a major global natural gas supplier in the future, especially to Europe.
The environmental issues have become important. Ongoing air pollution in urban areas, which reached a crisis level in Tehran, have highlighted the need to improve Iran’s
Environment record .The rush to developed oil and gas resources in the Caspian Sea makes oil pollution in the Caspian a real environmental threat.
The huge increase in energy consumption has contributed to pollution levels as Iran’s carbon emissions have tripled over the same time span.
Environmental concern has been one of the most debated issues in recent year for the country such as Iran.
Hence the search for environmental quality has been uniquely widespread and impassioned.
The spread and nature of environmental change has brought a series of environmental problems for Iran.
The rapid urbanization has been argued to be the cause of urban environmentally related problems for Iran. The urban population has been grown at double the rates in the last decades and could not sustained by available resources and the needed expansion in public provision.
Only a few cities governments in the developing countries are able to provide resources, trained personnel for rapidly increasing populations with land, services, facilities needed for an adequate human life. This results in the mushrooming of illegal settlements with primitive facilities increased overcrowding and rampant disease linked to an unhealthy environment as a result of conditions, crime.
The rapid urbanization and expansion without effective governance means that in all urban centers a proportion of the population is at risk from natural and made environment hazards which become particularly serious where there is rapid expansion in population with little or no consideration for environmental implications.
In studying urban environmental problems, issues on urban housing, urban poverty,
Sanitation, energy use, access the impacts of urbanization without adequate public provision in our cities and how the rapid urban growth leads to urban decay and depletion of our urban neighborhoods.





Iran is involving of dealing with several firms to do the oil swaps. In order to get around with restrictions. Receiving of Caspian oil to refineries in northern Iran, while the same amount of Iranian oil exported through Persian Gulf terminals.
Iran is geographically and economically on the transit route for oil and gas exports. From central Asian countries to the world markets.


Iran is in the process of preparing a master plan for the development of Tourism, which is nearly close to completion and initiating its implementation. That is one of the main objectives is sustainable development of tourism in the country.

The tourism development and Management Master plan for Iran targets the sustainable development and management of tourism, and its impacts in some major areas like:
In terms of the natural environment, the master plan addresses its sustainable development through development of an appropriate legal framework, improved management planning approach, greater local community participation and world heritage listing of prime sites.
In the terms of socio-cultural environment, the master plan stresses its sustainable development by strengthening the application of sustainable principles and practices in the planning development and operation of cultural sites. Public awareness and host awareness programs are included in the plan.
The tourism master plan also addresses the economic environment and its sustainable development through strategies to reduce imports, increase information on local suppliers, promoting decentralization of tourism products and services, creating better climate for investment through review visa facilitation and E-visa and improved custom Laws. The responsibility of the relevant ministries in terms of public sector is also developing infrastructure, resources, facilities and services and the institutional framework. The strategies at the highest level are framed its development in the line with national policy plan and spreading the economic and social benefits of tourism to the grass root level. Iran is on of the first five countries in the world in its range of Biodiversity, But the particular concern to us is deteriorated Coastal areas in the Caspian sea, inappropriate tourism development has exacerbated beach erosion and amenity loss, while on the Persian gulf the impact of the war, and ongoing oil mining transport and processing activities has exacted its roll on this precious coastal environment.
With the expansion of tourism activities into the desert, mountain, lakes and river regions of Iran, there is the concern that the potential threat to these environment
Will increase unless sustainable development and management principles and processes are adopted towards their use.
From economical perspective the economic environment is not prepared in terms of the services and markets approach for tourism related activities.
A comprehensive platform for the promotion of eco tourism is needed to develop and manage this industry. In the field of natural, socio-cultural and economic environment the new regulation and Laws needed to be anchored and the importance of these factors can not be undermined .A solid and stable foundation for tourism is required to promote
Economy on international level despite the difficulties and lack of experiences in Iranian
Society and the new motion must be set for better use of opportunities.



References:
*Population growth and employment Dr: Grammy

*Asia –pacific ministerial conference (Maldives- 2002)
*Iran at the glance UNPD
*Gulf news- 2004
*EIA country analysis briefs
*Iran Beauty and majesty
*Urbanization as a cause of urban environmental problems