Economy, Domestic Economy

Moving Capital From Tehran: Pros and Cons

Moving Capital From Tehran: Pros and Cons
Moving Capital From Tehran: Pros and Cons

After over 40 years of on-and-off interest in transferring the capital to another city, the Guardians Council last week approved the formation of a 15-member research commission to make a final announcement on whether it makes sense to strip Tehran of its capital status.

The commission would have to determine within two years whether Tehran could feasibly remain the country’s capital, and, if not, decide on a suitable replacement.

The Minister of Interior summed up government efforts to relocate the capital by saying that “no successor city has been determined yet, but it’s under review.”  

The history of Iran is a history of capital relocation. Since Hamedan was made the center of the Median Empire over 2,500 years ago, Iran’s capital has moved over 40 times. Every time a new dynasty took power over the plateau, the capital often changed too. However, Tehran, the capital since 200 years ago, has defied the trend. Even when the Russians and British occupied large swaths of Iran during the First World War, the government was unable to relocate the capital.

Since 1976, Iran has tried to relocate the capital on the basis that extreme centralization is harmful to the national interests. In 1995, an extensive report by a group of Japanese researchers concluded that Tehran would face a human crisis if it experienced an earthquake of more than 5 on the Richter scale.  

Despite the apocalyptic report, plans were delayed during the 1990s and early 2000s because Tehran experienced a flourishing of fortunes. Not only did private investment in the city’s construction industry increased exponentially, the city’s infrastructure was also redesigned, giving way to ring roads and highway systems.

While pollution and traffic levels soon shot up, wrangling and indecision on all sides delayed further action. Efforts did not even gather momentum after the Bam earthquake in 2004. Although three years later the Minister of Labor announced that relocating the capital is a top priority, no tangible plan materialized until two years ago.

It was only in January 2013 that a group of 52 MPs first signed a proposal to relocate the capital.  

According to Bijan Khajehpour, managing partner at Atieh Group, an international consultancy, officials were first inspired by the Istanbul-Ankara model. This model would see a less congested, more central city become the capital, like Isfahan.

Soon this plan was shelved and the Brasilia model gained in popularity – building a completely new capital city from scratch. Most recently, the Egyptian government has proposed a plan to build a new capital in the desert. The project is estimated at $45 billion. Indeed, when it became clear to Tehran that a Brasilia solution would be enormously costly and face the difficulty of moving citizens to the new capital, policymakers retracted the decision.

Nowadays, the Karachi-Islamabad model has become talk of the town. In this model, experts point to the dangers of keeping Tehran as capital for national security reasons. Among the proponents of this model is Abolfazl Abutorabi, a member of parliament. Abutorabi believes Tehran suffers from an imminent threat of earthquakes. He also points out that extensive construction on the slopes of the Alborz mountain range has exacerbated the risk of floods and landslides into residential areas. If a disaster hits the city, the political, scientific, cultural and economic capital would be severely undermined. For Abutorabi, decentralization is the solution.

Policymakers also believe pollution, traffic congestion and economic centralization are good reasons why there is need for decentralization. Home to 11 percent of the country’s population, Tehran accounts for 25 percent of GDP. This is to the detriment of provincial cities, which face higher unemployment than Tehran.

Interestingly, President Hassan Rouhani was himself involved in research and politics surrounding the relocation of the capital for over a decade as head of the Supreme National Security Council.

One serious bone of contention is that the program would cost at least 300 trillion rials ($10 billion) and take up to 25 years to complete, while lower oil revenues and western sanctions imposed against Iran over its nuclear energy program have strapped the government coffers of the long-term development funds.

In February 2014, President Rouhani announced that a research group would be created with the aim of “looking into the possibility of transferring the political and bureaucratic capital and organize the decentralization of Tehran.” The bill went through the Parliament last December only to be confirmed last week by the Guardians Council – the body in charge of making sure that all parliamentary decisions are in conformity with the Constitution.

The research group would first investigate whether Tehran could remain the capital. Minou Rafiei, an expert on housing, believes water scarcity is the reason why Tehran might well remain the country’s capital. While Tehran has been suffering from drought over the past year, it still appears the best option in terms of water resources.