Bonyad

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Bonyads (Persian : بنیاد "Foundation") are charitable trusts in Iran that play a major role in Iran's non-petroleum economy, controlling an estimated 20% of Iran's GDP, [1] and channeling revenues to groups supporting the Islamic Republic. [2] Exempt from taxes, they have been called "bloated", [3] and "a major weakness of Iran’s economy". [4] They have also been criticized for reaping "huge subsidies from government", while siphoning off production to the lucrative black market and providing limited and inadequate charity to the poor. [3]

Persian language Western Iranian language

Persian, also known by its endonym Farsi, is a Western Iranian language within the Indo-Iranian branch of the Indo-European language family. It is a pluricentric language primarily spoken in Iran, Afghanistan and Tajikistan, Uzbekistan and some other regions which historically were Persianate societies and considered part of Greater Iran. It is written right to left in the Persian alphabet, a modified variant of the Arabic script.

Charitable trust irrevocable trust established for charitable purposes

A charitable trust is an irrevocable trust established for charitable purposes and, in some jurisdictions, a more specific term than "charitable organization". A charitable trust enjoys a varying degree of tax benefits in most countries. It also generates good will. Some important terminology in charitable trusts is the term ‘corpus’ which refers to the assets with which the trust is funded and the term ‘donor’ which is the person donating assets to a charity.

Iran Islamic Republic in Western Asia

Iran, also called Persia, and officially the Islamic Republic of Iran, is a country in Western Asia. With over 81 million inhabitants, Iran is the world's 18th most populous country. Its territory spans 1,648,195 km2 (636,372 sq mi), making it the second largest country in the Middle East and the 17th largest in the world. Iran is bordered to the northwest by Armenia and the Republic of Azerbaijan, to the north by the Caspian Sea, to the northeast by Turkmenistan, to the east by Afghanistan and Pakistan, to the south by the Persian Gulf and the Gulf of Oman, and to the west by Turkey and Iraq. Its central location in Eurasia and Western Asia, and its proximity to the Strait of Hormuz, give it geostrategic importance. Tehran is the capital, largest city, and leading economic and cultural center.

Contents

Background

Monarchy

Founded as royal foundations by Shah Mohammad Reza Pahlavi, the original bonyads were criticized for providing a "smokescreen of charity" to patronage, economic control, for-profit wheeling and dealing done with the goal of "keep[ing] the Shah in Power." [5] Resembling more a secretive conglomerate than a charitable trust, these bonyads invested heavily in property development, such as the Kish Island resort; but the developments' housing and retail was oriented to the middle and upper classes, rather than the poor and needy. [6]

Shah Persian title

Shah is a title given to the emperors, kings, princes and lords of Iran. It was also adopted by the kings of Shirvan namely the Shirvanshahs. It was also used by Persianate societies such as the rulers and offspring of the Ottoman Empire, Mughal emperors of the Indian Subcontinent, the Bengal Sultanate, as well as in Afghanistan. In Iran the title was continuously used; rather than King in the European sense, each Persian ruler regarded himself as the Shahanshah or Padishah of the Persian Empire.

Mohammad Reza Pahlavi the last shah of Iran

Mohammad Reza Pahlavi, also known as Mohammad Reza Shah, was the last Shah of Iran from 16 September 1941 until his overthrow by the Iranian Revolution on 11 February 1979. Mohammad Reza Shah took the title Shahanshah on 26 October 1967. He was the second and last monarch of the House of Pahlavi. Mohammad Reza Shah Pahlavi held several other titles, including that of Aryamehr and Bozorg Arteshtaran ("Commander-in-Chief"). His dream of what he referred to as a "Great Civilisation" in Iran led to a rapid industrial and military modernisation, as well as economic and social reforms.

Kish Island Place in Hormozgān Province, Iran

Kish is a 91.5-square-kilometre (35.3 sq mi) resort island in Bandar Lengeh County, Hormozgān Province off the southern coast of Iran in the Persian Gulf. Owing to its free trade zone status, the island is touted as a consumer's paradise, with numerous malls, shopping centres, tourist attractions, and resort hotels. It has an estimated population of 26,000 residents and about 1 million visitors annually.

Islamic Republic

After the 1979 Iranian revolution, the Bonyads were nationalized and renamed with the declared intention of redistributing income to the poor and families of martyrs, i.e. those killed in the service of the country. The assets of many Iranians whose ideas or social positions ran contrary to the new Islamic government were also confiscated and given to the Bonyads without any compensation.

Martyr person who suffers persecution and death for advocating, refusing to renounce, and/or refusing to advocate a belief or cause, usually a religious one

A martyr is someone who suffers persecution and death for advocating, renouncing, refusing to renounce, or refusing to advocate a belief or cause as demanded by an external party. In the martyrdom narrative of the remembering community, this refusal to comply with the presented demands results in the punishment or execution of an actor by an alledged oppressor. Accordingly, the status of the 'martyr' can be considered a posthumous title as a reward for those who are considered worthy of the concept of martyrdom by the living, regardless of any attempts by the deceased to control how they will be remembered in advance. Originally applied only to those who suffered for their religious beliefs, the term has come to be used in connection with people killed for a political cause.

Today, there are over 100 Bonyads, [7] and they are criticized for many of the same reasons as their predecessors. They form tax-exempt, government subsidized, consortiums receiving religious donations and answerable directly (and only) to the Supreme Leader of Iran. The Bonyads are involved in everything from vast soybean and cotton fields to hotels to soft drinks to auto-manufacturing to shipping lines. The most prominent, the Bonyad-e Mostazafen va Janbazan , (Foundation for the Oppressed and Disabled), for example, "controls 20% of the country's production of textiles, 40% of soft drinks, two-thirds of all glass products and a dominant share also in tiles, chemicals, tires, foodstuffs." [8] Some economists argue that its chair, and not the Minister of Finance or president of the Central bank, is considered the most powerful economic post in Iran. [9] In addition to the very large national Bonyads, "almost every Iranian town has its own bonyad", affiliated with local mullahs. [10]

Consortium association of legal entities, usually businesses

A consortium is an association of two or more individuals, companies, organizations or governments with the objective of participating in a common activity or pooling their resources for achieving a common goal.

Supreme Leader of Iran Supreme Leader of the Islamic Republic of Iran

The Supreme Leader of Iran, also referred to as Supreme Leader of the Islamic Revolution, but officially called the Supreme Leadership Authority, is the head of state as well as the ultimate political and religious authority of the Islamic Republic of Iran. The armed forces, judiciary, state television, and other key government organizations are subject to the Supreme Leader. The current longtime officeholder, Ali Khamenei, has been issuing decrees and making the final decisions on economy, environment, foreign policy, education, national planning, and everything else in Iran. Khamenei also makes the final decisions on the amount of transparency in elections, and has dismissed and reinstated presidential cabinet appointees. The Supreme Leader directly chooses the ministers of Defense, Intelligence and Foreign Affairs, as well as certain other ministers, such as the Science Minister. Iran's regional policy is directly controlled by the office of the Supreme Leader with the Ministry of Foreign Affairs' task limited to protocol and ceremonial occasions. All of Iran's ambassadors to Arab countries, for example, are chosen by the Quds Corps, which directly report to the Supreme Leader.

Soybean legume grown for its edible bean with many uses

The soybean, or soya bean, is a species of legume native to East Asia, widely grown for its edible bean, which has numerous uses.

Estimates of how many people the bonyads employ ranges from in excess of 400,000 [11] to "as many as 5 million". [4]

Bonyads also play a crucial role in the spread of Iranian influence through extensive transnational and international activities, including philanthropy and commerce as soft power as well as providing hard power support. [12]

Criticism

Bonyads are criticized as enormously wasteful: overstaffed, [13] corrupt, and generally unprofitable. In 1999 Mohammad Forouzandeh, a former defense minister, reported that 80% of Iran's Bonyad companies were losing money. [13]

Bonyad companies also compete with Iran's unprotected private sector, whose firms complain of the difficulty of competing with bonyad firms whose political connections provide government permits and subsidies which eliminate worries over the need to make a profit in many market sectors. These Bonyads, by their very presence, hamper healthy economic competition, efficient use of capital and other resources, and growth. [7]

Unification of Iran's social security system

As charity organizations they are supposed to provide social services to the poor and the needy; however, "since there are over 100 of these organisations operating independently, the government doesn't know what, why, how and to whom this help and assistance is given." Bonyads do not fall under Iran's General Accounting Law and, consequently, are not subject to financial audits. [14] Unaccountable to the Central Bank governor, the bonyads "jealously guard their books from prying eyes." [15] Lack of proper oversight and control of these foundations has also hampered the government's efforts in creating a comprehensive, central and unified social security system in the country, undertaken since 2003. [7] [16] Iran has 12 million people living below the poverty line, six million of whom are not supported by any foundation or organization. [17]

So as to clearly distinguish its activities from the formal Social Security Organization (SSO), bonyads would have to be in charge of vocational training centers, rehabilitation centers, socioeconomic centers, all drug-related rehabilitation centers, cooperative banking (while financing these activities with the bonyads large commercial holdings, which then could be privatized). The SSO, on the other hand, could have sole responsibility for unemployment-insurance, professional-rehabilitation/training costs, retirement-pensions, disability funds, etc.[ citation needed ]

Rather than charitable organizations, the bonyads have been described as "patronage-oriented holding companies that ensure the channeling of revenues to groups and milieus supporting the regime," but don't help the poor as a class. [2] Another complaint describes them as having kept to their charitable mission for the first decade of the Islamic Republic, but having "increasingly forsaken their social welfare functions for straightforward commercial activities" since the death of Imam Khomeini. [10] Local city and town bonyad have been accused of sometimes using extortionate techniques to draw the traditional Shia Islamic 20% khums donations from local business owners. [10]

Seized assets

In certain well known instances, such as the confiscation of the properties and assets of the Boroumand family of Esfahan, the Islamic Revolutionary Court judge responsible for unjustly ordering the seizure and confiscation of that family's belongings was identified as a criminal, who was subsequently executed by the Islamic regime on charges of "corruption on earth", yet his confiscation ruling was let to stand.[ citation needed ]

In the rare instances where courts have ordered the Bonyad Mostazafan to return the properties of individuals whose belongings were unjustly seized, the Bonyad Mostazafan has refused to do so, instead offering to remunerate those individuals at the prices prevalent at the time at which those assets were seized in 1979, effectively denying the legitimate owners over 30 years of lost income and compensating them at only a tiny fraction of the true value of their belongings.[ citation needed ]

List of major bonyads

See also

Further reading

Related Research Articles

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The Mostazafan Foundation of Islamic Revolution formerly Bonyad-e Mostazafan va Janbazan is a charitable bonyad, or foundation, in the Islamic Republic of Iran, the second-largest commercial enterprise in Iran behind the state-owned National Iranian Oil Company and biggest holding company in the Middle East. According to one of the foundation's former directors, Mohsen Rafighdoost, Mostazafan allocates 50 percent of its profits to providing aid to the needy in the form of low-interest loans or monthly pensions, while it invests the remaining 50 percent in its various subsidiaries. With over 200,000 employees, it owns and operates approximately 350 subsidiary and affiliate companies in numerous industries including agriculture, industry, transportation, and tourism. Bonyad-e Mostazafan va Janbazan represented approximately 10 percent of the Iranian government’s annual budget in 2003. the MJF has an estimated value of more than $3 billion.

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References

  1. Molavi, Afshin, Soul of Iran, Norton, (2006), p.176
  2. 1 2 Roy, Olivier, The Failure of Political Islam by Olivier Roy, translated by Carol Volk, Harvard University Press, 1994, p.139
  3. 1 2 Mackey, Sandra Iranians, Persia, Islam, and the soul of a nation, New York: Dutton, c1996 (p.370)
  4. 1 2 Katzman, Kenneth. Iran’s Bonyads: Economic Strengths and Weaknesses. 6 Aug 2006 Archived 2008-10-25 at the Wayback Machine accessed 15-May-2009
  5. Graham, Robert, Iran: The Illusion of Power, St. Martin's Press, 1980, p.157, 8
  6. Graham, Iran, (1980), p.161
  7. 1 2 3 "Ahmadinejad's Achilles Heel: The Iranian Economy" by Dr. Abbas Bakhtiar
  8. NHH Sam 2007, Destructive Competition [ permanent dead link ]
  9. Molavi, Afshin, The Soul of Iran, Norton, (2005), p.176
  10. 1 2 3 Millionaire mullahs by Paul Klebnikov, July 7, 2003, The Iranian Originally printed in Forbes, accessed 15-May-2009
  11. Abrahamian, Ervand, History of Modern Iran, Columbia University Press, 2008, p.178
  12. Jenkins, WB, Bonyads as Agents and Vehicles of the Islamic Republic’s Soft Power in Iran in the World: President Rouhani's Foreign Policy, eds. Akbarzadeh, S. & Conduit, D., Palgrave Macmillan, 2016, pp.155-176
  13. 1 2 "Business: A mess; Iranian privatisation", The Economist. London: Jul 21, 2001. Vol. 360, Iss. 8231; pg. 51
  14. https://fpc.state.gov/documents/organization/107234.pdf
  15. Molavi, Soul of Iran, (2005) p.176
  16. World bank: country brief
  17. Tehran Times - Poverty in Iran [ dead link ]
  18. 1 2 "Millionaire Mullahs". Forbes. 2003-07-21. Retrieved 2014-03-13.