Structural Adjustment Policies and Transformation of Rural Economy in Rezvanshahr, Iran

Document Type : Research Paper

Authors

1 Associate Professor of Geography and Rural Planning, Kharazmi University, Tehran, Iran

2 PhD Candidate in Geography and Rural Planning, Kharazmi University, Tehran, Iran

3 PhD of Geography and Rural Planning, Kharazmi University, Tehran, Iran

Abstract

Introduction
 
The rural settlements of Rezvanshahr are faced with shortage of capital, lack of suitable economic infrastructure. These conditions resulted in improper use of productive and active rural labor forces in three economic sectors. This can lead to hidden and seasonal unemployment and consequently reduction of economic power and living standards of rural residents in the study area. The rural people are dependent upon agriculture and agricultural income without any industrial potential, such as agricultural conversion industries. This led to the lowest value-added agriculture products for the villagers. Therefore, severe economic vulnerability, rural income instability and employment constraints and the lack of job opportunities are the important structural features of rural economy in Rezvanshahr. These have been aggravated by disregarding of government. Therefore, the study attempts to examine the impact of subsidies, as one of the structural adjustment policies, on rural economy in study area. The villagers as the most vulnerable sectors of society are faced with economic and social problems. The important reasons are low income in the rural areas and even the productivity of the agricultural sector. It is obvious that the study of the impacts and the consequences of implementing this project, especially in the rural households affected by their economic conditions, can be helpful for decision-makers and policy-makers. Accordingly, the present study attempts to investigate the reflection of subsidy payments in rural settlements in Rezvanshahr area.
Methodology
This research with a qualitative approach as a methodological framework mainly focuses on grounded theory approach. To examine the reflection of targeted subsidy plan, collaborative observations and semi-structured interviews are based on exploratory approach. Statistical population is all the villagers and local people including council members, governors of rural districts and other villagers. The villages have been classified into three categories in terms of receiving subsidy. About 20% of the villages were selected as samples. Snowball sampling was used for selection of the villages under study. The sample size was 53 based on theoretical saturation. According to grounded theory, data from interviews were analyzed in three steps: open, axial and selective coding. The research validity was examined via members control and self-monitoring.
Results and discussion
Investigating the views of local community have revealed that in the villages of Rezvanshahr area, similar to other regions of Iran, the liberalization of energy carrier price both in non-manufacturing and manufacturing sector has led to increased costs in moving different goods and rural travels. Income growth among rural households due to receiving subsidy improved the savings for some households with previous financial ability. Some rural dwellers with no financial ability, on the other hand, said that the subsidy as second sources of income has partly influenced the trust among villagers, especially in lending and borrowing money among relatives. The urban relatives could more easily borrow money to the people because they believe that if agricultural revenues were not sufficient they could pay off by the subsidies. According to the views of the villagers in the Rezvanshahr area, after implementation of the Targeting Subsidy Act, the owners with more agronomic background gained more advantages from production subsidies in form of receiving fertilizers and poisons. Accordingly, it can be said that economic inequality has been fueled by subsidies in the villages. In the rural area of Rezvanshahr, as the dominant pattern of most rural areas in Iran, the households can be divided into two economic situations in relation to subsidies. Based on a six-year experience from targeted subsidies plan and its cash payment, the villagers become dependent on the determined "supplementary income" (subsidies). As cash subsidy payments, in one hand, depends on the ruling government and on the other hand, is a function of the country's oil revenues, rural income system has always been exposed to political and economic (mainly psychological) shocks especially during the elections.  
Conclusion 
The targeted subsidy plan as one of the implemented structural adjustment policies in Iran has caused reflections in the rural economy of Rezvanshahr. Based on selective coding, it can be said that there were three core categories as the result of implementing this policy. The categories are including change in the cost and income of villagers, changes in the system of production and consumption of wealth in the rural economy, and risk-taking growth in rural economy. Given that the subsidies are usually spent shortly after payment (up to 5 days), it creates a significant momentum in the flow of capital between rural and urban economy and then a depression appears in the market and trading sector. This situation is a reflection of growing dependence of the economic cycle (on the trading side) on subsidy payments in rural areas. The system and the source of subsidies, along with more and more dependence of villagers upon the subsidies have led to a drastic increase in the process of globalization and politicization of rural economy. Finally, it can be said that despite that rehabilitation has not happened in the rural economy in relation to its constituent elements (villagers) and the compensation for losses of stagnation does not happen very quickly, the targeted subsidies and its current support pattern (cash payments only to households) does not result in strengthening of the foundations of this economy. 

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Main Subjects

References

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Human Geography Research
Volume 51, Issue 1
April 2019
Pages 159-175

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History

  • Receive Date: 07 July 2017
  • Revise Date: 03 October 2017
  • Accept Date: 03 October 2017

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