People-Centered Economy (Part Seven)

 Amirhossein Khodaei, Researcher

 

People-Centered Economy (11)

**Effective Legislation or Futile Repetition of Articles?

Where Does the Core Problem of Governance Lie?**

The Fundamental Importance of the Issue

If the popularization of the economy is not placed at the top priority of legislation, regulation, and economic adjudication, all documents, plans, and academic articles will amount merely to content production, not transformation. The Supreme Leader’s continuous emphasis—through naming successive years around themes such as production, public participation, resistance economy, production leap, and people-based investment—clearly indicates that the country’s main problem is not the “absence of the people,” but rather the absence of a legal framework that enables meaningful public participation.

From the perspective of public law, any economic policy implemented without reforming its legal foundations is doomed either to failure or deviation.

The tangible reality is that popularizing the economy is not a slogan, but a vital necessity for sustainable national development. Without the people’s active participation, even the best-designed programs will remain confined to dusty library shelves.

The Main Legal Problem: People Locked Behind the Doors of the Law

The most serious problem of Iran’s economy is the imprisonment of popular capacities within outdated, monopolistic, and rent-seeking legal structures. Obsolete laws, dense regulations, contradictory directives, and discretionary administrative practices have effectively confined economic participation to limited groups.

As a result, low-income deciles, youth, young couples, retirees, female-headed or unsupported households, and uninsured individuals—rather than becoming participants in production and trade—have been reduced to subsidy recipients. This situation stands in clear contradiction to economic justice and citizens’ rights.

If a clear and comprehensive law were enacted today, millions of young talents could enter the economy and steer the country toward genuine growth.

Law as Principle and Practical Pathways for Popularizing the Economy

Passing a law alone is not sufficient. Experience has shown that without proper implementation, even the most progressive constitutional principles fail to materialize. A clear example is Article 44 of the Constitution, which explicitly opens the economic arena to the people; yet due to the lack of effective enforcement mechanisms, much of its potential has remained unused for years.

Within this framework, the Law on Facilitating the Issuance of Business Licenses was enacted precisely to realize the spirit of Article 44—by eliminating unnecessary permits, increasing transparency, and reducing “golden signatures.” However, incomplete implementation and resistance from administrative structures have left many citizens still standing behind closed licensing doors.

Popularizing the economy cannot be achieved merely by drafting laws; the law must be executable, facilitative, and non-obstructive.

This path rests on several legal principles rooted in the Constitution and fully implementable in practice:

• Justice and Elimination of Economic Discrimination:
  All citizens must have fair access to economic participation.
  Executive solution: Transparency in licensing and targeted support for small businesses.

• Equality of Opportunity:
  Laws must not favor specific groups.
  Executive solution: Revising restrictive regulations affecting youth, women, and retirees.

• Security of Property and Investment:
  Without legal certainty, popular capital will not enter the market.
  Executive solution: Judicial protection of contracts and fast, low-cost arbitration.

• Economic Freedom within the Law:
  Article 44 has no meaning without legitimate economic freedom.
  Executive solution: Removing redundant permits and replacing ex ante controls with smart supervision.

• Reducing State Ownership and Strengthening the People’s Role:
  The state should regulate, not operate businesses.
  Executive solution: Genuine privatization and support for cooperatives and people-based funds.

• Transparency and Conflict-of-Interest Management:
  A prerequisite for trust and real participation.
  Executive solution: Mandatory disclosure of interests and separation of decision-making from benefit-taking.

Article 44 of the Constitution is the roadmap for popularizing the economy, while laws such as the Facilitation Law are its execution engines. If this engine does not function properly, the people-centered economy will remain merely a slogan. Full and uncompromising enforcement of the Facilitation Law is the missing link that can revive small-scale trade, mobilize popular capital, and genuinely democratize the national economy.

Liberating Public-Sector Talents: The Key to a People-Centered Economy in Iran

A significant portion of the population—millions of educated and specialized government employees—are currently restricted from genuine participation in the people-centered economy. Existing laws prohibit them from registering companies or serving on boards of private firms. These restrictions effectively eliminate the economic capacity of a large social class and reduce public participation in economic activity.

Consequently, only individuals outside the public sector can engage in business, pushing the economy toward rent-seeking and reduced transparency. Cooperative foundations and various funds are not available in all institutions and could be made mandatory through proper directives.

Lessons from Successful Countries

• Germany and France:
  Civil servants may own companies and serve on boards, but must declare and obtain permission if activities conflict with their public duties.

• United Kingdom and Canada:
  Company registration and board membership are permitted, provided full disclosure of interests and conflicts.

• South Korea:
  After experiencing corruption challenges, absolute bans were lifted and replaced with a conflict-of-interest registration system.

Global experience demonstrates that economic freedom for public employees—combined with transparency and accountability—enables broad public participation while effectively managing conflicts of interest.

Utilizing the Experience and Expertise of Retirees

Government retirees, with years of practical experience and accumulated knowledge, represent one of the most important potential resources for strengthening a people-centered economy. By creating targeted advisory and investment mechanisms, conditions can be provided for their participation in private companies and startups—without generating conflicts of interest.

A retiree may operate as a specialized advisor, a non-executive (inactive) board member, or an investor without an operational role. Establishing collaborative networks of retirees and providing mentoring (the transfer of experience from seasoned individuals to less-experienced entrepreneurs for better growth and decision-making) to young entrepreneurs can tangibly expand knowledge transfer and direct public participation in the economy.

Proposed Legal Reforms for Iran

• Differentiation among Public Employees:
  Ordinary employees should be free to invest; mid-level managers may do so with transparent disclosure; and senior decision-makers should face restrictions or require special authorization.

• Subject-Based, Not Personal, Prohibitions:
  Economic activity should be restricted only in areas directly related to one’s public position, not through a blanket ban on company registration.

• Transparency and Interest Disclosure System:
  Registration of ownership, board memberships, and family-related companies under the supervision of oversight institutions.

• Ownership without Management:
  Allow shareholding for all, while restricting executive roles for public employees.

• Smart Ownership Caps:
  Ownership above a specified percentage should require prior authorization.

• Cooling-Off Period for Senior Officials:
  After leaving office, a temporary restriction should apply to activities related to their former area of responsibility.

Structural and Monopolistic Barriers: The Hidden Enemy of a People-Centered Economy

These barriers include legal and quasi-legal monopolies, informational rents, complex licensing regimes, strict foreign-exchange repatriation rules, inflexible import and export tariffs, and lack of transparency in commercial processes. Such obstacles are anti-developmental and violate the principles of equality and economic freedom. Their removal must be a top policy priority.

Conflict of Interest: The Root of Rent-Seeking and Monopoly

When an institution or individual responsible for legislation or regulation is also an economic beneficiary, the result is inevitably the reinforcement of rent-seeking. Transparency of interests, prohibition of simultaneous authority and oversight, and mandatory disclosure of economic interests are essential legal tools for genuine popularization of the economy.

Legal Walls of the People-Centered Economy: Barriers That Must Be Broken

Small-scale trade and a people-centered economy are the engines of national growth and prosperity; yet legal barriers continue to obstruct economic actors.

Many emerging and popular economic activities—such as network marketing, digital marketing, freelancing (independent, non-employed project-based work), platform-based sales (offering goods or services through intermediary digital platforms), and digital services exports (online provision of services to foreign markets)—remain suspended between prohibition, ambiguity, and administrative discretion due to the absence of clear legal frameworks. They are neither formally recognized nor properly regulated.

• Insecure Ownership:
  Small investments and business shares, without legal protection, remain exposed to risk and distrust.

• Complex Contracts and Arbitration:
  Simple disputes can halt businesses; lengthy and costly procedures undermine trust.

• Licensing and Customs Complexity:
  Contradictory regulations and prolonged procedures make small-scale trade risky and slow.

• Lack of Frameworks for Digital Transactions:
  From digital wallets to cryptocurrencies, capital circulates amid uncertainty and legal ambiguity.

• Rent, Monopoly, and Conflict of Interest:
  When legislators or licensing authorities are themselves beneficiaries, people’s access is restricted and the economy becomes rent-based.

The path forward is clear: transparent laws, protection of small capital, rapid arbitration, secure property rights, and effective oversight of conflicts of interest. When these walls collapse, small-scale production and trade can breathe, and a truly people-centered economy can take shape.

The Role of Institutions in Popularizing the Economy

Islamic Consultative Assembly (Parliament):

• Revising economic laws with priority given to supporting and facilitating small-scale trade and small industries, while redefining the role of large industries and powerful economic actors as supporters and beneficiaries of empowering smaller enterprises.

• Enacting anti-monopoly and conflict-of-interest management laws.

• Obliging the government to regulatory transparency and periodic reporting.

• Defining tax, insurance, and banking incentives for low-income groups.

Government and Council of Ministers:

• Eliminating redundant and contradictory regulations.

• Simplifying, digitizing, and smartening licensing processes.

• Drafting facilitative—not restrictive—bylaws.

• Providing executive support for small-scale trade, small exports, and the knowledge-based economy.

• Facilitating and mandating the establishment of cooperative foundations across all governmental, quasi-governmental, military, and private institutions.

Judiciary:

• Judicial protection of property rights, contracts, and legitimate economic activity.

• Developing a fast and low-cost economic arbitration system.

• Utilizing and empowering qualified official judicial experts through proper guidance and capacity-building.

Supervisory and Security Institutions:

Supervisory and security bodies must seriously combat corruption, rent-seeking, and money laundering—without creating fear, uncertainty, or unnecessary interrogations for healthy and lawful economic actors.

Separating Legitimate People-Based Economic Activity from Organized Violations

Banks and Insurance Companies

• Designing financial facilities and insurance coverage tailored to small businesses, youth, and retirees.

• Providing credit support to cooperative foundations, cooperatives, and various people-based funds.

• Active regulation by the Central Bank and the Central Insurance Authority to ensure credit justice and risk reduction.

• Supplementary proposal: Facilitating diverse domestic guarantees and recognizing the credit value of foreign guarantees.

Acceptance of Various Forms of Guarantees

• Banks and people-based support funds should accept a wide range of domestic and foreign guarantees.

• Gold and movable/immovable assets as collateral:
  As legally recognized guarantees, these assets can secure micro-loans and people’s investments, subject to expert evaluation and judicial arbitration.

• Foreign guarantees:
  Their importance and impact in creating financial credibility for individuals and small enterprises must be duly recognized.

• Domestic credit creation:
  The possibility of generating internal credit should be ensured through legal support by domestic institutions.

• Validation of domestic guarantees for trade:
  Clear laws and procedures must be established and implemented for the approval, registration, and use of domestic guarantees in commercial activities.

Developing Trade, Funds, and the Participation Ladder

• Expanding small-scale trade through supportive tariffs, appropriate insurance, domestic and foreign guarantees, and the complementary role of large industries in completing the trade cycle.

• Recognizing cooperative foundations and people’s participation funds as lawful non-governmental public institutions.

• Objective: Enabling people to move from awareness to participation, investment, and ultimately ownership and decision-making.

Legal Solutions for Breaking Monopolies and Enabling Small Trade to Enter High-Profit Markets

From a legal perspective, dismantling monopolies in high-profit markets requires strengthening competition laws, increasing transparency in licensing, and limiting exclusive privileges. Reducing barriers to entry by eliminating unnecessary permits, setting caps on market concentration, and mandating public disclosure of operating conditions provides the legal groundwork for small economic actors to enter these markets.

Moreover, establishing fair contractual frameworks—such as subcontracting, small consortia, and guaranteed equal access to infrastructure and supply chains—enables small traders to participate in monopolized markets. Legal incentives and support mechanisms for large enterprises to cooperate with small units further pave the way for breaking monopolies and popularizing high-profit trade sectors.

Smart Customs: A Launchpad for People-Based Production and Trade

Legal gaps in customs regulations have turned production and trade for domestic producers and small businesses into a risky and costly path. Complex permits, contradictory directives, and lack of transparency in customs clearance have caused small capital and economic activities to stagnate rather than grow.

Simple legal solutions include:

• Transparency in customs regulations and procedures through executable and digital guidelines.

• Facilitating and accelerating customs clearance for domestic products and small businesses.

• Legal support for domestic producers to compete fairly with imported goods.

• Establishing special channels for small trade and people’s cooperatives to convert small capital into productive activity.

When the legal pathway becomes clear and simple, producers gain confidence, small-scale trade grows, and the people-centered economy regains momentum.

“Smart customs are not an obstacle, but a launchpad for the national and people-based economy.”

Popularizing the Economy from a Legal Perspective:

Education, Facilitation, and Institutional Synergy in Small-Scale Trade**

From a legal standpoint, popularizing the economy cannot be achieved without empowering small economic actors through legal and commercial capacity-building. The experience of successful countries shows that education is effective only when combined with legal awareness of contracts, domestic and international trade regulations, professional rights, and dispute resolution mechanisms.

Within this framework, trade guilds, the Ministry of Agriculture Jihad, chambers of commerce, and trade development centers—by establishing free legal and commercial advisory centers at provincial and municipal levels—play a facilitative legal role for small businesses.

From the perspective of public and commercial law, customs authorities are also a key pillar of economic popularization. By providing simplified legal pathways, streamlining procedures, offering regulatory support to small exporters, and reducing administrative costs, customs systems can enable small enterprises to access regional and international markets.

A strategic coalition among these institutions—while preserving their legal independence—through memoranda of understanding and non-exclusive consortia is not only feasible but essential. In this model, large industries act as legal and economic supporters by outsourcing production, transferring know-how, guaranteeing purchases, and concluding fair contracts, thereby completing the supply and production cycle of small industries.

The main legal challenges include fragmented regulations, weak enforcement mechanisms, and lack of incentives for institutional cooperation. The solution lies in legal reform with a facilitative approach, introducing legal and financial incentives, formally recognizing provincial coalitions, and institutionalizing free legal and commercial advisory services—paving the way for genuine people-centered economic development.

A Legal Coalition for Popularizing the Economy:

Linking Institutions and Universities**

From a legal perspective, the formation of a strategic coalition among the country’s economic institutions—including Customs, Chambers of Commerce, Chambers of Guilds, the Ministry of Agriculture Jihad, and Trade Development Centers—will be effective and sustainable only if it is formally connected with universities and law faculties through official memoranda of understanding. Such cooperation, while preserving institutional independence, enables the use of academic and research capacities to address the real challenges of small-scale trade.

Academic institutions can contribute by defining applied topics for master’s theses and doctoral dissertations, proposing innovative legal solutions, publishing specialized articles, conducting expert interviews, and clarifying legal advocacy mechanisms. Through these efforts, legal and executive gaps in the popularization of the economy can be identified, and pathways for reform can be clarified and facilitated. This linkage between theory and practice lays the groundwork for more precise legal policymaking and more effective protection of small economic actors.

Exchange Offices: Secure Facilitators of Small-Scale Trade and Sanctions Mitigation

The experiences of China and Russia demonstrate that sanctions do not necessarily prevent small-scale and people-based trade, provided that secure and flexible legal pathways exist. Exchange offices can compensate for restricted banking channels and mobilize small-scale capital into the economy. However, legal barriers—such as the absence of a clear framework for holding deposits, restrictions on fund transfers, and ambiguous legal risks—have undermined public and business trust.

Practical solutions include:

• Holding deposits in escrow or trust accounts with legal and insurance guarantees.

• Using alternative instruments such as domestic remittances, barter trade, and local currencies.

• Risk-sharing among multiple trusted institutions with transparent reporting to build public confidence.

• Accepting real collateral and insurance-backed or bank-backed guarantees to reassure all parties.

• Removing unnecessary restrictions on investment and economic participation by individuals and small businesses.

With these mechanisms, exchange offices can make small-scale trade secure, fast, and people-centered, rendering sanctions manageable rather than paralyzing.

Trusts: Legal Guarantees and Transaction Security

Trusts or trustee institutions serve as legal and insurance-backed safeguards for transactions. Current challenges include incomplete legal definitions, lack of enforceable liability guarantees, and insufficient transaction transparency.

Practical solutions:

• Formal legal recognition of trusts and clear definition of their duties and responsibilities.

• Trusts acting as legal and financial custodians of funds and assets, releasing them only upon fulfillment of contractual obligations.

• Integration with exchange offices and escrow accounts to form a secure, flexible, and transparent network.

• Transparency in ownership, transactions, and obligations to strengthen public trust.

Through these instruments, transaction risks are reduced, small capital is transformed into productive trade, and genuine, sustainable public participation in the economy becomes possible.

Smart Navigation of Sanctions:

Lessons from China and Russia and Secure Trade Pathways**

Sanctions have restricted formal banking channels, yet the core challenge is not a lack of resources but the absence of flexible legal mechanisms for secure capital movement. The experiences of China and Russia show that sanctions can be neutralized calmly and systematically.

China relies on multi-layered resource transfer networks:

• Settlement using local currencies and barter of goods and services

• Escrow accounts to securely hold funds until obligations are met

• Trusted intermediary institutions overseeing compliance

In Russia, joint guarantee funds, multi-stage contracts, and trust arrangements have enabled continued trade despite banking restrictions. By emphasizing domestic settlement in rubles, layered transfer networks, and guarantee-based contracts, Russia has reduced sanction risks and enabled active participation by private and small-scale actors.

The key element in both cases is the use of trusts—commercial trustees that stand between buyer and seller under legally binding contracts, backed by guarantees and liability insurance. Trusts are neither exchange offices nor brokers; they are trust-builders and facilitators of secure, efficient trade. This model is also scalable to regional frameworks such as BRICS, where joint guarantee funds, trusts, and local-currency settlements can replace high-risk traditional channels.

Legal recommendations for Iran:

• Formal legal recognition of trusts and their responsibilities

• Transaction transparency and legal protection of capital

• Mandatory liability insurance and strict oversight

• Integration with exchange offices and escrow accounts to create a secure, flexible, people-based network

With this framework, sanctions become a manageable challenge rather than a crippling barrier, paving the way for secure, sustainable, and people-centered trade.

Barriers to the Transfer and جذب of Financial Resources

The lack of a transparent legal framework for payments, settlements, digital wallets, financial platforms, cryptocurrencies, and modern transfer tools has pushed a significant portion of public capital into ambiguous and risky channels. The result has been the growth of speculative cryptocurrencies, fraudulent projects, increased financial scams, and an accumulation of legal cases—benefiting neither the public nor the judiciary.

In trade and commerce, financial transfers related to exports, imports, customs, international contracts, and digital trade have become costly and risky due to the absence of clear legal rails. When legal pathways are neither simple nor reliable, capital either stagnates or shifts toward informal routes—often ending in legal disputes and economic losses.

In the digital economy—from fintech and e-banking to micro-financial services—laws have yet to clearly define responsibility, ownership, and public rights in financial transfers. This legal vacuum undermines public trust and prevents broad-based participation in the economy.

Filling these legal gaps is not merely a technical reform; it is a social catalyst. When people see that:

• Money transfers are secure and lawful

• Contracts are transparent and enforceable

• Small capital rights are formally recognized

a collective economic movement emerges, directing capital toward productive and sustainable investment rather than speculative behavior.

A people-centered economy materializes only when both small and large capital can safely enter production and trade through transparent legal channels. The core issue today is not capital scarcity, but the lack of secure pathways for capital mobilization and transfer.

Global experience shows that instruments such as banking credit lines, escrow accounts, micro-guarantee funds, letters of credit, participation bonds, regional settlements, and digital payments—when clearly regulated—can massively activate public participation. Legal transparency leads to increased trust, reduced risk, smoother capital flows, and transforms citizens from subsidy recipients into genuine economic partners. Without such secure pathways, popularizing the economy will remain a slogan.

Final Remarks

A people-centered economy cannot emerge without legal security, and legal security is impossible without up-to-date and transparent laws. When the legal rails are properly laid, public capital moves, trust is strengthened, and the national economy gains new vitality.

The government and parliament are obligated to guarantee the people’s right to economic participation—not in rhetoric, but in law and practice. The following constitutional principles serve as guiding lights for a people-centered economy:

• Article 3: Social justice

• Article 20: Equality of opportunity

• Article 22: Security of property

• Article 43: Economic independence

• Article 44: Opening the economic arena to the people

• Article 48: Regional and social justice

Together, these principles transform popularizing the economy from a slogan into a binding legal and constitutional duty.