Mostazafan Foundation

Last updated
Islamic Revolution Mostazafan Foundation
PredecessorPahlavi Foundation
FoundedFebruary 21, 1980;38 years ago (1980-02-21)
Founder Ruhollah Khomeini
Key people
Mohammad Saeedikia (President)
Website Official website

The Mostazafan Foundation of Islamic Revolution (Persian : بنیاد مستضعفان انقلاب اسلامی) formerly Bonyad-e Mostazafan va Janbazan (Foundation of the Oppressed and Disabled or "MFJ") 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 [1] and biggest holding company in the Middle East. [2] 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. [3] [4] Bonyad-e Mostazafan va Janbazan represented approximately 10 percent of the Iranian government’s annual budget in 2003.[ clarification needed ] [3] [4] the MJF has an estimated value of more than $3 billion. [3]

Persian language Western Iranian language

Persian, also known by its endonym Farsi, is one of the Western Iranian languages 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.

Bonyad foundation

Bonyads are charitable trusts in Iran that play a major role in Iran's non-petroleum economy, controlling an estimated 20% of Iran's GDP, and channeling revenues to groups supporting the Islamic Republic. Exempt from taxes, they have been called "bloated", and "a major weakness of Iran’s economy". 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.

History of the Islamic Republic of Iran aspect of history

One of the most dramatic changes in government in Iran's history was seen with the 1979 Iranian Revolution where Shah Mohammad Reza Pahlavi was overthrown and replaced by Ayatollah Ruhollah Khomeini. The patriotic monarchy was replaced by an Islamic Republic based on the principle of rule by Islamic jurists,, where clerics serve as head of state and in many powerful governmental roles. A pro-Western, pro-American foreign policy was exchanged for one of "neither east nor west", said to rest on the three "pillars" of mandatory veil (hijab) for women, and opposition to the United States and Israel. A rapidly modernizing, capitalist economy was replaced by a populist and Islamic economy and culture.


It was founded in 1979 as a successor to the Pahlavi Foundation. As an economic, cultural, and social welfare institution, the Foundation controls manufacturing and industrial companies, whose profits are used—according to the foundation—to promote "the living standards of the disabled and poor individuals " of Iran and to "develop general public awareness with regards to history, books, museums, and cinema." [5] The Mostazafan is associated with the Revolutionary Guard where some of its head officials have come from. [6]

Islamic Revolutionary Guard Corps Islamic defense branch of Irans military

The Islamic Revolutionary Guard Corps (IRGC) is a branch of Iran's Armed Forces, founded after the Iranian Revolution on 22 April 1979 by order of Ayatollah Khomeini. Whereas the Islamic Republic of Iran Army defends Iran's borders and maintains internal order, according to the Iranian constitution, the Revolutionary Guard (pasdaran) is intended to protect the country's Islamic republic system. The Revolutionary Guards state that their role in protecting the Islamic system is preventing foreign interference as well as coups by the military or "deviant movements".


Pahlavi Foundation

Muhammad Reza Shah Pahlavi established the Pahlavi Foundation as a tax-exempt charity in 1958. This foundation held the assets of Muhammad Reza Shah, his predecessor, and many of his family, who later served on the corporate board and received commissions. The Pahlavi Foundation’s wealth was estimated at $3 billion at its height. The Pahlavi Foundation was dogged by accusations of corruption. [7] [8]

The Pahlavi Foundation was said to have owned in Iran four leading hotels: the Hilton, the Vanak, the Evin and the Darband. The Foundation gained international attention for purchasing the DePinna building on Fifth Avenue, New York, valued in 1975 at $14.5 million. Such investment in a foreign market by the Pahlavi Foundation gained media attention because in order to do such foreign investment the Foundation had to register as an American charitable foundation with the declared aim of using the rental to pay for Iranian students studying in the United States.

Fifth Avenue avenue in Manhattan

Fifth Avenue is a major thoroughfare in the borough of Manhattan in New York City. It stretches north from Washington Square Park in Greenwich Village to West 143rd Street in Harlem. It is considered one of the most expensive and elegant streets in the world.

The advantage of such charitable status was that the US authorities could not investigate the books of the Pahlavi Foundation in Iran. [9]

Mostazafan Foundation

Following the Islamic Revolution, the Pahlavi Foundation was renamed the Bonyad-e Mostazafan (Foundation of the Oppressed), and its economic assets increased by more than double after the property of fifty millionaires was confiscated and added to the endowment. [7]

A decade after the Revolution, the Foundation's assets totaled more than $20 billion, and included "some 140 factories, 470 agrobusinesses, 100 construction firms, 64 mines, and 250 commercial companies." [7] By 1994, the Foundation conducted six trillion rials' worth of business transactions, compared with 5.5 trillion rials collected by the government in taxes. [10] By 1996 the foundation began taking government funds to cover welfare disbursements. [1]

Because of the Iran–Iraq War, the foundation was given the responsibility to supervise and aid veterans wounded in the war and the name Janbazan (disabled) added to it. [2] Sometime before December 2005 the foundation changed its name back to Bonyad Mostazafan as the "Martyrs and War Veterans Foundation" took over war veterans affairs. [11]

Important Revolutionary Guards who have headed the foundation include Mohsen Rafighdoost, who served as Minister of the Revolutionary Guards from 1982 to 1989 before heading the foundation until 1999; and Mohammad Forouzandeh, the chief of staff of the Revolutionary Guard in the late 1980s and later Defense Minister, who is head of the foundation as of 2006. [6]

Economic activity

The Foundation is involved in numerous sectors of the economy, including shipping, metal, petrochemicals, construction materials, dams, towers, farming, horticulture, tourism, transportation, hotels, and commercial services. [6] It controls 40% of Iran's production of soft drinks, including Zamzam Cola which it owns and produces; the newspapers Ettelaat and Kayhan . [7] It "controls 20% of the country's production of textiles ... two-thirds of all glass products and a dominant share also in tiles, chemicals, tires, foodstuffs." [12] Its total value was estimated by one source at "as much as $12 billion," [6] by another as "in all probability exceed[ing] $10 billion." [1]

Mostazafan's largest subsidiary is the Agricultural and Food Industries Organization (AFIO), which owns more than 115 additional companies. Some of the foundation’s contract work also includes large engineering projects, such as the construction of Terminal One of the Imam Khomeini International Airport. [4]

Mostazafan also has a history of soliciting contract work abroad. It currently maintains economic connections with countries in the Middle East, Europe, Africa, and South Asia, as well as in Russia and other former states of the Soviet Union. [4]


As employers of approximately five million Iranians and providers of social welfare services to "perhaps several million more", bonyads such as Mostazafan "have a large constituency and are able to build support for the regime among the working and lower classes." [6] Nonetheless the Foundation has been subject to a number of controversies common to other bonyads in the years since its inception. The Foundation and other bonyads are “exempt from official oversight as key religious leaders and former or current government officials control them. They enjoy virtual tax exemption and customs privileges, preferential access to credit and foreign exchange, and regulatory protection from private sector competition.” [1] [6]

In 2003 there was talk of the foundation "spinning off its social responsibilities" and becoming "a purely commercial conglomerate," leaving open the question of who would own it and why it should exist as a foundation. [1]

See also

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  1. 1 2 3 4 5 Millionaire mullahs by Paul Klebnikov, 7 July 2003, The Iranian Originally printed in Forbes, Retrieved 15 May 2009
  2. 1 2 Bonyad-e Mostazafan van Janbazan: Oppressed and Disabled Veterans Foundation (MJF) Page last modified: 10-07-2008. 15 March 2009
  3. 1 2 3 Iran’s Economy
  4. 1 2 3 4 "The Rise of the Pasdaran" (PDF). Rand Corporation. 2009.
  5. Mostazafan Foundation. About the Bonyad. 2 Oct. 2008 Archived 26 January 2009 at the Wayback Machine . Retrieved 15-March-2009.
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  7. 1 2 3 4 Abrahamian, Ervand. A History of Modern Iran. New York: Cambridge University Press, 2008
  8. "A Bazaari's World", by Robert D. Kaplan , The Atlantic , March 1996
  9. Graham, Robert (23 April 2012). Iran (RLE Iran A). CRC Press. p. 232.
  10. Behdad, Sohrab. "From Populism to Economic Liberalism: The Iranian Predicament". The Economy of Iran: The Dilemma of an Islamic State. Ed. Parvin Alizadeh. New York: I.B. Tauris
  11. Bonyad Chief Reinstated Archived 5 May 2009 at the Wayback Machine .
  12. NHH Sam 2007, Destructive Competition [ permanent dead link ]