Weekly word: bonyad

June 25, 2010

Bonyads are “charitable” Islamic foundations in Iran.

Wikipedia offers this introduction to the concept:

Bonyads are controversial charitable trusts in Iran that dominate Iran’s non-petroleum economy, controlling an estimated 20% of Iran’s GDP.  Exempt from taxes and government control, they have been called “bloated”, and “a major weakness of Iran’s economy”, and criticized for reaping “huge subsidies from government”, while siphoning off production to the lucrative black market and providing limited and inadequate charity to the poor.

Founded as royal foundations by Shah Mohammad Reza Pahlavi, the original bonyads were criticized for providing a “smokescreen of charity” to patronage, economic control, for-profit wheeling and dealing done with the goal of “keep[ing] the Shah in Power.”  Resembling more a secretive conglomerate than a charitable trust, these bonyads invested heavily in property development – such as the Kish Island resort – but the developments’ housing and retail was oriented to the middle and upper classes, rather than the poor and needy.

After the 1979 Iranian revolution, the Bonyads were nationalized and renamed with the declared intention of redistributing income to the poor and families of martyrs, i.e. those killed in the service of the country. The assets of many Iranians whose ideas or social positions ran contrary to the new Islamic government were also confiscated and given to the Bonyads without any consequence.

Today, there are over 100 Bonyads, and they are criticized for many of the same reasons as their predecessors. They form tax-exempt, government subsidized, consortiums receiving religious donations and answerable directly (and only) to the Supreme Leader of Iran.  (Internal citations omitted)

Putting it more succinctly, Middle East expert Ray Takeyh describes bonyads as “massive semi-government foundations with vast religious and philanthropic missions [which] have metamorphosed into huge holding companies that dominate the trade and manufacturing sectors while evading competition, taxes and state regulations.”


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