Although inflation remains still quite high at around 20%, broad money growth has shown signs of moderating. Debt levels are also now below the average for emerging market economies. Perhaps above all else, it is encouraging that the authorities have not rested on their laurels, but have instead sought to take advantage of this recent more favourable economic environment to increase the momentum of reform. The overall macroeconomic prospect, therefore, is a positive one. The Third Five-Year Development Plan represents an ambitious step forward. It maps out a realistic sequence for a balanced liberalisation of Iran’s economy. The aim of increasing growth to 6% per annum, from an average of 2.5% between 1997 and 2000, should generate employment opportunities for the growing labour force and help to raise living standards. The plan aims to promote growth through privatisation and liberalisation, and to enhance stability by further encouraging diversification of the economy. Macroeconomic policies under the plan are aimed at fiscal consolidation to help reduce inflation, broadening the tax base (including the introduction of VAT), and unifying exchange rates at a market-determined level. Exchange controls will be further loosened. And it is planned that 1  BIS Review 83/2000  price distortions due to state subsidies will also decline. These are ambitious and wide-ranging plans and the key is now implementation. The climate for business investment in Iran has steadily improved over the past decade, in particular following the election of President Khatami in 1997, as the process of liberalisation has accelerated.
There is no doubt that the updated recommendations will enhance the level and methods of protection of the economic system against such type of crimes threatening it. In conclusion, I would like to express my thanks and gratitude for your respected group for its achievements accomplished during its short life, wishing you continued success. I thank the organizers for their efforts. I also welcome you again in the Kingdom of Saudi Arabia and I hope that your meetings in this session will be a success. 2  BIS central bankers’ speeches