Centeral Interrelatedness and the Iranian Economy during Pre and Post- Revolution



The primary goal of any economic policy in the production front is, as far as possible to enhance the degree of sectoral interrelatedness (henceforh SI) within the home economy. The focal objective of such policy is not only to increase the sectoral value added of the economy but also to improve the position of the trade balance in the commodity trade front. Iran, being characterized a sole mono- economy with predominance of oil share in the domestic and foreign trade commodity account, has for the past three decades opted to diversity her economy both at home and the foreign trade front (Banouer, and Aruafar, 1990). The past policy package implies that of integration of oil and oil related products to the rest of the domestic economy, i.e. agriculture, industry and sevice sectors and vice- versa in terms of forward and backward linkages on the one hand and the commodity diversification in the foreign trade on the other hand(1). Such laid down development strategy was not only the prime concern of Iran as the other oil producing countries have almost followed the similar exercise right from the late 1973 oil boom (Banouei, 1992).