Bonyad
Encyclopedia
Bonyads are charitable trust
s in Iran
that play a significant role in Iran's non-petroleum economy, controlling an estimated 20% of Iran's GDP
. Exempt from taxes, they have been called "bloated", and "a major weakness of Iran’s economy
", and 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.
, 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." 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.
, the Bonyads were nationalized and renamed with the declared intention of redistributing income to the poor and families of martyr
s, 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 consequence.
Today, there are over 100 Bonyads, and they are criticized for many of the same reasons as their predecessors. They form tax-exempt, government subsidized, consortium
s 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 hotel
s to soft drink
s 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." 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. In addition to the very large national Bonyads, "almost every Iranian town has its own bonyad", affiliated with local mullahs.
Estimates of how many people the bonyads employ ranges from in excess of 400,000 to "as many as 5 million".
, and generally unprofitable. In 1999 Mohammad Forouzandeh
, a former defense minister, reported that 80% of Iran's Bonyad companies were losing money.
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
.
and control of these foundation
s has also hampered the government's efforts in creating a comprehensive, central and unified social security
system in the country, undertaken since 2003. Iran has 12 million people living below the poverty line, six million of whom are not supported by any foundation or organization.
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. 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. Local city and town bonyad have been accused of sometimes using extortionate tehniques to draw the traditional Shia Islamic 20% khums
donations from local business owners.
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.
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.
Charitable trust
A charitable trust is an irrevocable trust established for charitable purposes, and is a more specific term than "charitable organization".-United States:...
s in Iran
Iran
Iran , officially the Islamic Republic of Iran , is a country in Southern and Western Asia. The name "Iran" has been in use natively since the Sassanian era and came into use internationally in 1935, before which the country was known to the Western world as Persia...
that play a significant role in Iran's non-petroleum economy, controlling an estimated 20% of Iran's GDP
Gross domestic product
Gross domestic product refers to the market value of all final goods and services produced within a country in a given period. GDP per capita is often considered an indicator of a country's standard of living....
. Exempt from taxes, they have been called "bloated", and "a major weakness of Iran’s economy
Economy of Iran
The economy of Iran is the eighteenth largest in the world by purchasing power parity and according to Iranian officials' claims is going to become the 12th largest by 2015. The economy of Iran is a mixed and transition economy with a large public sector and some 50% of the economy centrally planned...
", and 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.
Monarchy
Founded as royal foundations by Shah Mohammad Reza PahlaviMohammad Reza Pahlavi
Mohammad Rezā Shāh Pahlavi, Shah of Iran, Shah of Persia , ruled Iran from 16 September 1941 until his overthrow by the Iranian Revolution on 11 February 1979...
, 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." 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.
Islamic Republic
After the 1979 Iranian revolutionIranian Revolution
The Iranian Revolution refers to events involving the overthrow of Iran's monarchy under Shah Mohammad Reza Pahlavi and its replacement with an Islamic republic under Ayatollah Ruhollah Khomeini, the leader of the...
, the Bonyads were nationalized and renamed with the declared intention of redistributing income to the poor and families of martyr
Martyr
A martyr is somebody who suffers persecution and death for refusing to renounce, or accept, a belief or cause, usually religious.-Meaning:...
s, 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 consequence.
Today, there are over 100 Bonyads, and they are criticized for many of the same reasons as their predecessors. They form tax-exempt, government subsidized, consortium
Consortium
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....
s receiving religious donations and answerable directly (and only) to the Supreme Leader of Iran
Supreme Leader of Iran
The Supreme Leader of Iran is the highest ranking political and religious authority in the Islamic Republic of Iran. The post was established by the constitution in accordance with the concept of Guardianship of the Islamic Jurists...
. The Bonyads are involved in everything from vast soybean
Soybean
The soybean or soya bean is a species of legume native to East Asia, widely grown for its edible bean which has numerous uses...
and cotton
Cotton
Cotton is a soft, fluffy staple fiber that grows in a boll, or protective capsule, around the seeds of cotton plants of the genus Gossypium. The fiber is almost pure cellulose. The botanical purpose of cotton fiber is to aid in seed dispersal....
fields to hotel
Hotel
A hotel is an establishment that provides paid lodging on a short-term basis. The provision of basic accommodation, in times past, consisting only of a room with a bed, a cupboard, a small table and a washstand has largely been replaced by rooms with modern facilities, including en-suite bathrooms...
s to soft drink
Soft drink
A soft drink is a non-alcoholic beverage that typically contains water , a sweetener, and a flavoring agent...
s to auto-manufacturing to shipping lines
Iran Shipping Lines
The maritime fleet of the Islamic Republic of Iran Shipping Lines comprises 115 ocean-going vessels with the total capacity of . The ownership structure of the fleet comprises 87 ocean-going vessels in IRISL and 28 different types of ships under the flag of subsidiaries, including Khazar Shipping,...
. The most prominent, the Bonyad-e Mostazafen va Janbazan
Bonyad-e Mostazafen va Janbazan
The Mostazafen Foundation of Islamic Revolution formerly Bonyad-e Mostazafen 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...
, (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." Some economists argue that its chair, and not the Minister of Finance
Ministry of Economic Affairs and Finance (Iran)
The Ministry of Economic Affairs and Finances function are:*acting as the state treasury,*public finance,*economic and financial policy making,*implementing tax policies,*in charge of foreign direct investment,...
or president of the Central bank, is considered the most powerful economic post in Iran. In addition to the very large national Bonyads, "almost every Iranian town has its own bonyad", affiliated with local mullahs.
Estimates of how many people the bonyads employ ranges from in excess of 400,000 to "as many as 5 million".
Criticism
Bonyads are criticized as enormously wasteful: overstaffed, corruptPolitical corruption
Political corruption is the use of legislated powers by government officials for illegitimate private gain. Misuse of government power for other purposes, such as repression of political opponents and general police brutality, is not considered political corruption. Neither are illegal acts by...
, and generally unprofitable. In 1999 Mohammad Forouzandeh
Mohammad Forouzandeh
Mohammad Forouzandeh is the head of the Bonyad-e Mostazafen va Janbazan, or Foundation of the Oppressed and Disabled, the second-largest commercial enterprise in Iran and biggest holding company in the Middle East. His tenure as head of the foundation was renewed "for another five years" on...
, a former defense minister, reported that 80% of Iran's Bonyad companies were losing money.
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
Competition
Competition is a contest between individuals, groups, animals, etc. for territory, a niche, or a location of resources. It arises whenever two and only two strive for a goal which cannot be shared. Competition occurs naturally between living organisms which co-exist in the same environment. For...
, efficient use of capital and other resources, and growth
Economic growth
In economics, economic growth is defined as the increasing capacity of the economy to satisfy the wants of goods and services of the members of society. Economic growth is enabled by increases in productivity, which lowers the inputs for a given amount of output. Lowered costs increase demand...
.
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. Unaccountable to the Central Bank governor, the bonyads "jealously guard their books from prying eyes." Lack of proper oversightOversight
Oversight may refer to:*Oversight , a French Thoroughbred racehorse*Regulation – rulemaking*Separation of powers - the concept of separate branches of government or agencies exercising authority over one another...
and control of these foundation
Foundation (charity)
A foundation is a legal categorization of nonprofit organizations that will typically either donate funds and support to other organizations, or provide the source of funding for its own charitable purposes....
s has also hampered the government's efforts in creating a comprehensive, central and unified social security
Social security
Social security is primarily a social insurance program providing social protection or protection against socially recognized conditions, including poverty, old age, disability, unemployment and others. Social security may refer to:...
system in the country, undertaken since 2003. Iran has 12 million people living below the poverty line, six million of whom are not supported by any foundation or organization.
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. 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. Local city and town bonyad have been accused of sometimes using extortionate tehniques to draw the traditional Shia Islamic 20% khums
Khums
Khums is the Arabic word for One Fifth . According to Shia Islamic legal terminology, it means "one-fifth of certain items which a person acquires as wealth, and which must be paid as an Islamic tax"....
donations from local business owners.
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 CourtIslamic Revolutionary Court
Islamic Revolutionary Court is a special court in the Islamic Republic of Iran designed to try those suspected of smuggling, blaspheming, inticing violence or trying to overthrow the Iranian government...
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.
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.
List of major bonyads
- Bonyad-e Mostazafen va JanbazanBonyad-e Mostazafen va JanbazanThe Mostazafen Foundation of Islamic Revolution formerly Bonyad-e Mostazafen 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...
(Foundation for the Oppressed and Disabled), one of the largest welfare organization, A semi-public foundation originally founded in 1979 with the assets of the last ShahMohammad Reza PahlaviMohammad Rezā Shāh Pahlavi, Shah of Iran, Shah of Persia , ruled Iran from 16 September 1941 until his overthrow by the Iranian Revolution on 11 February 1979...
’s family; it operates a wide variety of charitable activities. With a reported $10 billion in assets (2003). - Astan Quds RazaviAstan Quds RazaviAstan Quds Razavi is a Bonyad, or autonomous charitable foundation, in Mashhad, Iran. It is the administrative organization which manage Imam Reza shrine and institutions belonging to the organization....
(Imam Reza shrineImam Reza shrineImām Reza shrine in Mashhad, Iran is a complex which contains the mausoleum of Imam Reza, the eighth Imām of Twelver Shi'ites. It is the largest mosque in the world by dimension and the second largest in capacity...
Foundation), with $15 billion in assets (2003). - Bonyad Shahid va Isaar-Garaan (Foundation of the Martyrs and the Affairs of Self-Sacrificers),
- Bonyad Shahid va Omur-e JanbazanBonyad Shahid va Omur-e JanbazanThe Bonyad Shahid va Omur-e Janbazan, or Foundation of Martyrs and Veterans Affairs is an Iranian governmental entity that receives its funding directly from the national budget. Former Islamic Revolutionary Guard Corps Air Force commander Hossein Dehghan acts as president and director of this...
(Foundation of Martyrs and Veteran Affairs), one of the biggest with over 100 companies. Provides welfare assistance to families of the MartyrMartyrA martyr is somebody who suffers persecution and death for refusing to renounce, or accept, a belief or cause, usually religious.-Meaning:...
s of the Iran-Iraq warIran-Iraq WarThe Iran–Iraq War was an armed conflict between the armed forces of Iraq and Iran, lasting from September 1980 to August 1988, making it the longest conventional war of the twentieth century...
. - Pilgrimage Foundation,
- Housing Foundation,
- Foundation for War Refugees,
- Imam Khomeini Relief CommitteeImam Khomeini Relief CommitteeImam Khomeini's Relief Committee was founded in March 1979 as a charity organization to provide support for poor families. The aim is to help such families regain financial stability.-Sources of Funding:...
, provides sickness, maternity, and work injury benefits to some workers in the private sector.
See also
- Smuggling in Iran
- Economy of Iran
- Privatization in IranPrivatization in IranAccording to the Fourth Five-Year Economic Development Plan , the Privatization Organization of Iran affiliated to the Ministry of Economic Affairs and Finance is in charge of setting prices and ceding shares to the general public and on the Tehran Stock Exchange...
- List of Iranian companies
- Iranian labor law
- International rankings of Iran
- Banking in Iran
- Health care in IranHealth care in IranHealth care in Iran and medical sector's market value was almost US $24 billion in 2002 and was forecast to rise to US $31 billion by 2007. With a population of almost 70 million, Iran is one of the most populous countries in the Middle East...
- Agriculture in IranAgriculture in IranRoughly one-third of Iran's total surface area is suited for farmland, but because of poor soil and lack of adequate water distribution in many areas, most of it is not under cultivation....
- Mining in IranMining in IranMining in Iran is under-developed. Yet the country is one of the most important mineral producers in the world, ranked among 15 major mineral rich countries, holding some 68 types of minerals, 37 billion tonnes of proven reserves and more than 57 billion tonnes of potential reservoirs....
- Tourism in IranTourism in IranTourism attracted 2.3 million people to Iran in 2009. Iran plans to have 20 million tourists annually by 2015 ....
- Transport in IranTransport in IranTransport in Iran is inexpensive because of the government's subsidization of the price of gasoline. The downside is economic inefficiency because of highly wasteful consumption patterns, contraband with neighboring countries and air pollution...
- Energy in IranEnergy in IranEnergy resources in Iran consist of the third largest oil reserves and the second largest natural gas reserves in the world. Iran is in a constant battle to use its energy resources more effectively in the face of subsidization and the need for technological advances in energy exploration and...
- Taxation in Iran
Further reading
- Annual Review by the Central Bank of Iran, including statistics about social security in Iran.
- "A mess." The Economist, July 19, 2001.
- "Stunted and Distorted." The Economist, January 16, 2003.
- "Still fading, still defiant." The Economist, December 9, 2004.
- "Inside Iran's Holy Money Machine." Wall Street Journal, June 2, 2007. Details about the Imam Reza shrineImam Reza shrineImām Reza shrine in Mashhad, Iran is a complex which contains the mausoleum of Imam Reza, the eighth Imām of Twelver Shi'ites. It is the largest mosque in the world by dimension and the second largest in capacity...
, the largest active bonyad in Iran. - "Bonyad-e Mostazafen va Janbazan, (Foundation for the Oppressed and Disabled)" globalsecurity.org
- World Bank Statistics Human development, social and economic indicators for Iran
- Iran's Ministry of Welfare and Social Security policies still based on charity
- Iran Para-governmental Organizations (bonyads) By Ali A. Saeidi (Source: The Middle East Institute)
- Poverty and Inequality since the Revolution By Djavad Salehi-Isfahani (Source: The Middle East Institute)
External links
- Imam Khomeiny Relief Foundation
- Bonyad Shahid va Isaar-Garaan (Foundation of the Martyrs and the Affairs of Self-Sacrificers)
- Bonyad Shahid va Omur-e Janbazan (Foundation of Martyrs and Veteran Affairs)
- Bonyad-e Mostazafan va Janbazan (Foundation for the Oppressed and Disabled)
- Bonyad Panzdah Khordad (Foundation of the 15 KhordadMovement of 15 KhordadThe demonstrations of June 5 and 6, 1963 in Iran, were a protest against the arrest of Ayatollah Ruhollah Khomeini after an angry speech by him attacking Shah Mohammad Reza Pahlavi, Israel and the United States...
) - Astan Quds Razavi (Imam Reza Shrine Foundation)