How much of a negative impact do bonyads have on Iran's economy?

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Bonyads are charitable trusts that control about 20% of Iran's GDP and have been criticized for being "a major weakness of Iran's economy" and providing inadequate charity to the poor(Mackey, Sandra Iranians, Persia, Islam, and the soul of a nation, New York: Dutton, c1996 (p.370)). How much of a negative impact do bonyads have on Iran's economy?

Tyler Mc

Posted 2020-01-25T12:07:46.310

Reputation: 3 876

2I'm not sure why you think Bonyads are any worse than the 70% of Iran's economy which is state-controlled according to the IMF. (Your link doesn't work for me and it looks like to goes to an UAE website, which I would consider a doubtful source for anything regarding Iran given that they are fighting a proxy war.) – Fizz – 2020-01-25T17:12:11.020

Added different new links that would be better sources. Also, the reason why I think that is because the current sources talk about how bonyads are corrupt and unprofitable since they -according to Wikipedia (https://en.wikipedia.org/wiki/Bonyad#Criticism) and more reliable sources like the Washington Examiner and the Economist ("Business: A mess; Iranian privatisation", The Economist. London: Jul 21, 2001. Vol. 360, Iss. 8231; pg. 51)- are overstaffed, corrupt, and unprofitable since they control a sizable portion of Iran's economy in spite of these problems.

– Tyler Mc – 2020-01-26T02:06:38.710

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Funnily they've been compared with Fannie Mae and Freddie Mac in one (French) paper on the "parastatal sector". https://mpra.ub.uni-muenchen.de/37926/1/Soft_Budget_constraint_and_parastatal_sector-oct2011-pdf.pdf

– Fizz – 2020-01-26T04:31:26.497

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Keep in mind that Iran follow Islamic banking rules on the immorality of charging interest rates. While bonyads may or may not be a drag on the economy (I'd never heard of them), this needs placing into the context of a financial system that is likely to have other challenges as well. Wikipedia entry, badly outdated : https://en.wikipedia.org/wiki/Banking_and_insurance_in_Iran.

– Italian Philosophers 4 Monica – 2020-01-26T17:11:18.950

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