Blog #7: Economy of Iran

The World Bank In Islamic Republic of Iran

This page from The World Bank Organization talks about Iran’s economy. It was published in Apr 01, 2017, and It provides basic information about the country like the GDP, the unemployment rate, and the poverty rate. The page also introduced the development plan that has a significant reflection on the Iranian economy.
Iran has the second largest population in the MENA region, and with a Gross Domestic Product (GDP) of US$412.2 billion, Iran is considered the second largest economy in the region. The Iranian economy is dependent on agriculture, services sector, manufacturing, and the hydrocarbon sector. Must noticeably, Iran has very large reserves of crude oil and natural gas; and the economic activity and government revenues are heavily dependent on oil revenues as a result. 20-year national vision, development plan, has been adopted by the government in 2004. The vision includes market-based reforms and consists of three main objectives; developing a resilient economy, progressing in science and technology, and promoting cultural excellence. A growth rate of 8 percent is targeted annually by the development plan. Nevertheless, the unemployment rate is 12.7 percent, which is considerably high. Poverty on the other hand has decreased from 13.1 percent to 8.1 percent between 2009 and 2013. Significantly, the removal of oil sanctions in 2016 boomed the Iranian economy and reduced the deficit. Still, the global trade relationships and foreign direct investment inflows to Iran are still restrained and preventing the country from progressing more quickly.


Iran’s economy under Rouhani: achievements and obstacles

This article by Mohammad Mostafavi-Dehzooei was published in The Belfer Center for Science and International Affairs in May 17, 2017. The author is basically analyzing the economic accomplishments of president Hassan Rouhani. The article explains the positive and negative outcomes of Rouhani’s presidency, and it was published two days before the presidential elections in May 19, 2017, which Rouhani’s won obviously.

When president Rouhani was elected in 2013, the Iranian economy was literally deteriorated especially after intensifying the international sanctions in 2011. Rouhani has fulfilled his promises and made some positive shifts to the Iranian economy, while some obstacles remained the same. He could control the inflation that was dramatically increasing during the past thirty years. He also caused the GDP to grow by 7.2% in 2016 due to re-integrating Iran with the world. However, Rouhani’s administration has not shown a real progress toward solving the unemployment problem which is one of the top concerns of the Iranians. The university graduate are increasing but no jobs are there to be offered for them. Notably, the oil sector demands less labor and more capital, while opening the market for foreign investment and privatization could create more jobs.


I liked reading about the Iranian economy and I found It weird to see a country like Iran that was one of the first countries in the world to discover oil in such economic crisis. This country seems to have a long history of struggle from the nationalization of the Iranian oil by president Mosaddegh, until the implementation of the economic sanctions on Iran. However, the authorities recently realized that the survival of the country is dependent on holding the economy from collapsing. I liked the 20 years vision and it reminded my of the 14 year’s vision of Saudi Arabia. Both countries have enormous reserves of oil, and both are realizing how danger it is to depend solely on such unstable revenue resources. I have noticed shared objectives between the two countries like the tendency of diversifying the economy, empowering the private sector, and encouraging the foreign direct investment. Market liberals in Iran and those who care would encourage Iran to open its doors for foreigner investors and to build strong ties with the global banks; especially after removing the international sanctions from Tehran. The successfulness of the Iranian government to finally reach to a nuclear deal with the P5+1 could be regarded to the existence of some political liberalists who see the necessity to strengthening there state and know that could not be accomplished while having a deteriorating economy.


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