Self-Employment Initiatives In Iran—A Case Study

A few years after the Islamic Revolution in 1979, the Government of Iran was confronted by a rapid growth in the population, vast migrations from rural areas to urban cities such as Tehran (currently numbering 15 millions), and increasing unemployment. Available statistics, according to sociologists and statisticians, indicate that unemployment in Iran is an “urban” phenomenon affecting high school and university graduates. In an attempt to address the problem of unemployment and the concentration of wealth in the hands of a few individuals in business, the Government decided to introduce several models to promote self-employment enterprises. In order to implement these models the Parliament of the Islamic Republic of Iran has approved several decrees that allow the Government to extend credit to unemployed persons provided they form production co-operatives. There are mainly two self-employment models developed by the Government through the Ministry of Co-operation and the Ministry of Employment and Social Affairs. In order to evaluate these models, this author conducted intensive interviews with a number of staff members in the Ministry of Co-operation and the Ministry of Employment and Social Affairs, reviewed relevant literature, and surveyed 20% of active co-operatives in the Tehran province to gather first-hand information. An important attribute of the scheme is that, through establishing self-employment enterprises for unemployed persons, the Iranian Government attempted to replace mortgages by education or managerial ability as a basis for extending credit. The study revealed that, despite the attractiveness of the models, their success is dependent upon careful implementation and handling of the problems such as management training and the education of self-employed persons.