People-Centered Economy (Part Five)

 Amirhossein Khodaei, Researcher

People-Centered Economy (9)

Iran’s People-Centered Economy: From Idle Domestic Liquidity to the Investments of Iranians Abroad

Today, Iran’s economy faces two enormous yet largely untapped capacities:

1. The massive accumulation of domestic liquidity,

2. The significant assets and capital of Iranians residing abroad — whether liquid or productive (such as property or income-generating assets) — which, if channeled into Iran’s economy with proper incentives and mechanisms, could drive production leaps, employment, social justice, and geopolitical growth.

People-centered economy means leveraging these two capacities not merely through slogans, but via practical, transparent, and participatory mechanisms, so that citizens — especially lower-income groups — become shareholders and real asset owners.

Domestic Liquidity: Threat of Inflation or Development Opportunity?

a) The scale of domestic liquidity

In recent years, Iran’s liquidity has reached approximately 7–10 thousand trillion tomans (7,000–10,000 trillion IRR). This liquidity has significant potential impact: if it enters non-productive markets like foreign exchange or gold, it fuels inflation, but if directed toward production, it can be the greatest driver of development.

The public’s preference for converting liquidity into dollars or non-productive gold stems from lack of trust and limited attractive financial tools. If tools such as project funds, stock allocations for underprivileged regions, installment-based investments, and minimum guaranteed returns are activated, people will be guided toward productive assets rather than inflationary assets.

Additionally, incentives such as minimum interest on foreign currency deposits, access to production loans in foreign currency, secure withdrawal and transfer of foreign accounts, issuance of currency-backed securities with bank guarantees, and guaranteed currency conversion at transparent rates can strengthen public trust and channel foreign currency into the official economy.

This approach, by creating benefits, easing processes, and properly structuring mechanisms, can attract investments from Iranians abroad and even foreign capital, enabling financing for mega-projects and accelerating balanced development and social justice.

b) Why does liquidity often fuel inflation?

Iran’s economic history shows that when liquidity is left without productive investment, the public prefers assets like dollars, gold, land, or foreign-currency deposits to preserve value rather than invest in production.

Result: Increased liquidity → increased demand for non-productive assets → pressure on commodity, housing, and currency markets → inflation and instability.

c) People-centered economy via domestic liquidity: How to channel it to production

If banking systems, laws, and official institutions are designed to:

• Establish transparent project funds accessible to the public,

• Offer units of these funds to lower-income groups with special conditions (allocation of shares, installment payments from project profits, guaranteed returns, emergency sale options),

• Ensure transparency in returns and capital,

• Allow purchase of shares even with small amounts,

then domestic liquidity can transform into productive and employment-generating capital — not an inflation engine. Lower-income groups, in this process, will not merely be consumers but actual shareholders in national production and infrastructure.

Investments of Iranians Abroad: A Potential of Hundreds of Billions to Trillions of Dollars

a) Estimating the assets of Iranians abroad

Although estimates vary widely, studies suggest:

• Some sources previously estimated the assets of Iranians abroad at up to $1.3 trillion.

• A parliamentary report placed it at around $2 trillion.

• Precise figures are difficult due to geographic dispersion, diversity of assets (cash, real estate, businesses, stocks), and lack of transparency.

Thus, a rough estimate ranges from hundreds of billions to approximately $1–2 trillion in potential liquid or productive assets.

b) Examples of successful investments by Iranians abroad

Iranians abroad are active in diverse sectors:

• Transportation companies and startups (ride-hailing, urban/intercity transport) in Europe and the US

• Passenger and cargo airlines

• Logistics: land (trucks, trains), maritime transport

• Industry and mining: oil, gas, petrochemicals, metals, minerals

• Global commodity trade: gold and other valuable products

• Financial institutions, banks, trusts, fintech, and international banking services

• Ownership of sports clubs, entertainment industries, and professional sports investments

These experiences show that Iranians abroad not only possess capital but also the capability to run large-scale businesses. If this network and capacity are connected to the domestic economy, both national and individual benefits can be realized.

c) Why doesn’t this capital often return?

Key obstacles include:

1. Lack of guaranteed capital return,

2. Instability in policies, tax, and investment laws,

3. Absence of official, secure, and transparent transfer channels,

4. Lack of insurance or credible investment guarantees,

5. No real project backing,

6. Inadequate reporting and auditing.

As a result, capital remains abroad or is locked in non-transferable assets instead of investing domestically.

Proposed Framework for People-Centered Investment of Iranians Inside and Outside the Country

To optimally utilize these capacities, a legal–economic and institutional framework is needed:

1. Special law for protecting overseas Iranian investors

   • Guarantee capital return

   • Free capital exit

   • Tax exemptions or incentives

   • Independent arbitration for disputes

2. Single-window system for overseas Iranian investments

   • Facilitate administrative, banking, currency, and legal processes

   • Coordinate with banks, insurance, stock exchanges, and financial markets

   • Secure capital/currency transfer mechanisms

3. Public and private project funds

   • Define national or regional projects as “project funds”

   • Allow trading of fund units

   • Allocate special units to low-income groups

4. Real project guarantees

   • Backed by tangible assets (land, gold, equipment, future revenue)

   • Investment insurance

   • Capital-return guarantee fund

5. Full transparency and regular reporting

   • Quarterly financial reports audited independently

   • Public disclosure of project data, progress, risks, and profits

6. Diverse modern capital transfer channels

   • International and foreign-currency accounts

   • Cryptocurrencies (with legal framework)

   • Trusts, funds, and independent financial institutions

7. Encouraging participation of low-income groups

   • Special shares for youth, marriage, low-income groups, employment, and underdeveloped regions

   • Long-term installment plans, profit-based installment payments, liquidity options

   • Financial education and awareness

Role of Cryptocurrency and Energy: Opportunities and Challenges

Iran’s relatively cheap electricity provides high potential for cryptocurrency mining. With careful planning (renewable allocation, consumption control, linkage to productive projects, transparent legal framework), crypto mining can generate income, wealth, capital, and attract foreign currency, directly benefiting people through domestic investment projects.

Without management, this may strain the electricity grid and infrastructure. Hence, cryptocurrency use must be part of a broader energy and financial policy with transparent financial tools, insurance, and currency incentives.

Macro Goals: Real Growth, Social Justice, Economic Independence

1. Reducing raw material exports — value-chain development
   Focus on downstream industries (petrochemicals, steel, mining, industrial production, export of high value-added products) to boost employment and foreign currency revenue.

2. Self-sufficiency and import reduction
   Developing domestic industries for essential goods reduces import dependency and prevents currency outflow.

3. Empowering underprivileged regions and income groups
   Real participation via shares, local employment, rural production, cooperative housing reduces social and regional gaps.

4. Supporting youth and marriage
   Special shares to encourage youth marriage and population growth, particularly among low-income groups and deprived areas — as “productive savings” for marriage, employment, housing — mitigating migration and demographic inefficiencies.

5. Enhancing Iran’s economic and geopolitical power
   Attracting investments from Iranians abroad creates international networks in investment, trade, and production — strengthening Iran’s regional position, reducing sanction vulnerability, and increasing economic resilience.

Why Now?

• Domestic liquidity is at an unprecedented level; if it enters non-productive markets, inflation will rise.

• Global economy is shifting: need for clean energy, new supply chains, global financial services, and new markets — Iranian expatriates’ potential is high.

• Young Iranians and deprived regions are eager for opportunity and share.

• Sanctions and external shocks are time-consuming — the best resistance is creating productive capacity and utilizing skilled labor.

• Delay means liquidity fuels inflation, and expatriate capital remains locked or diverted.

Successful International Models in People-Centered Economy

Experience from countries such as the USA, Germany, Singapore, South Korea, India, and Turkey shows that with tools like transparent project funds, low-income shareholding, attracting expatriate capital, and currency incentives, idle domestic liquidity and expatriate capital can be directed to production and employment.

• South Korea: people as shareholders in major industries

• Turkey: guarantees on expatriate capital return

• India: fintech and micro-investment funds

Key lessons: transparency, capital-return guarantees, and small-scale participation are essential pillars of success.

From Currency Control Threat to Production and Tourism Opportunity

If currency-control threats are difficult to manage, people-centered economy can turn them into opportunity: reducing import profits, increasing export gains, attracting foreign tourists, and developing medical tourism brings foreign currency into the domestic cycle while directly involving people in production and services.

When production costs are lowered and legal and credible guarantees enable large companies’ participation in domestic production, people become real shareholders in projects — transforming idle liquidity into productive capital and transitioning the economy from state–rentier to people-centered, production-driven, and shock-resilient.

People-Centered Economy with Golden Facilities: Public Capital, National Production

By creating micro-investment funds and participating in gold refineries and production companies, idle public liquidity can become productive capital. Banking facilities backed by gold ensure investment security and allow low-income participation. Properly managed, these projects turn idle liquidity into production, employment, and economic growth, creating genuine people-centered economy.

Successful domestic and international models, e.g., Zarrin Shuran and Sarigoni mines in Iran, Grasberg in Indonesia, and Muruntau in Uzbekistan, demonstrate that with legal frameworks and reliable guarantees, gold sector people-centered economy can trigger national leaps.

Conclusion: Vision of a People-Centered, Production-Oriented Iran

A people-centered economy can transform domestic idle liquidity and expatriate capital into powerful tools for production, employment, and social justice. Successful experiences worldwide highlight that transparency, guaranteed capital return, and micro-participation are three key pillars.

Currency appreciation is not a threat but a golden opportunity: reducing import profits, boosting exports, attracting tourists, and developing medical tourism channels foreign currency into domestic economy, making people direct beneficiaries. With low production costs and credible legal guarantees, as seen in China, people become real shareholders, moving the economy from state–rentier to a people-centered, production-driven, resilient system.

Iran, in this vision, is no longer just an oil consumer or exporter, but a country with real production capacity, technology, and tourism powered by small and large Iranian investments — an economy where citizens are creators and stakeholders of the nation’s future.