A general look on the non-observed economy in Iran

The statistical centre of Iran (SCI) has been trying hard to have a complete coverage of economic production. The exhaustiveness of production accounts is a goal for this centre, but there has been difficulties in accounting for some types of non-observed activities. However, there are some works done in pursuit of decreasing the missing data. Here is brief description of the most important works which have been done in this respect.

One approach of categorizing the activities in non-observed economy of Iran, can be the following: A- Productive activities performed in households. B- Productive activities without a determined location and those which are itinerant.

Gathering information from non-observed economy of Iran from households is easier, so most of the information in this area are gathered from different household surveys.

Most of the non-observed activities which are itinerant or without a location, are service producers. The value estimation for many of them is difficult and complicated. The main problem is that the statistical population for each activity of this category is unknown. The variety of activities is much more in this category, besides the problem of determining the border line between legal and illegal activities.

The situation of economic activities in respect of non-observed economy in Iran. 1- Agriculture There is no considerable problem of non-observed agricultural activities. Statistical population of agricultural holdings is known, and the necessary information are gathered from relevant surveys. Agricultural production of households for own final use are compiled from the results of the household budget surveys.

2- Mining and quarrying The unlawful extraction of sand is probable in the rural areas of Iran. Government is trying to have more control on this activity like other mining activities. So the importance of this kind of non-observed activity is getting less.

3- Manufacturing Considerable manufacturing activities are done in the non-observed economy of Iran. SCI has tried to get the information of these activities by different household surveys, general census of manufacturing, cooperation with the handicraft organization of Iran, and some other manufacturing surveys. Most of the non-observed manufacturing activities of Iran are performed in the households. These activities are mostly weaving textiles, weaving rugs and different kinds of carpets, weaving baskets and mats, making apparel and foodstuff, etc. Household budget surveys have the highest importance in providing the information.

4- Construction Construction activities in non-observed economy of Iran is also considerable. Since the information is gathered from different institutional sectors by expenditure approach, the hope exists that there is no missing information about production. Problem exists in respect of the number of people engaged in construction works, because the non-observed labor force do not have a definite location. General idea of expert group in Iran is that almost 50 percent of the labor force engaged in construction works in this country is non-observed.

5- Restaurants, Hotels, and trade activities Activities similar to restaurants and hotels, and also trade activities exist in the informal sector of national economy of Iran. Restaurant and hotel and part of the trade activities of informal sector are performed in households. There is no important difficulty in getting the information of these activities from household budget surveys, but the other part of the trade activities which don’t have a definite location is not easy to be investigated. The statistical population of this part is unknown.

6- Transportation Among the transportation activities, transport of passengers via road has considerable importance in the informal sector of the economy of Iran. The purchasers of informal transport services are mainly households. The use of other institutional sectors from these services is negligible. Production value of this part of transport production is indirectly measured by special questions which were put in the current income and expenditure survey of households.

7- Financial affairs Problem exists for the estimation of services rendered by itinerant money changers. These money changers do not have a definite location, and their statistical population is unknown.

8- Education The importance of education provided by private teachers is becoming more in Iran. The estimation work for the private teachers who teach in their own house is not difficult, because the population of unincorporated enterprises of this kind is known. The population of private teachers who teach in places other than their own house is not known. However the questions relevant to the expenditures for private teaching are asked in the household budget surveys.

9- Business and other services The non-observed economy with respect to business and other services contains a very extensive spectrum in Iran. Because of the diversity of activities and other difficulties, they are not covered in the national accounts. The appropriate recommendations are required in the national accounts.

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