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Thursday, June 27, 2013

Essay on Economic Development in Iran

The research paper is focused on economic issue in iran specially in last 30 years (after 1979 revolution)is about the issue of economic development and why iran  have not developed as much as other countries.

The most important reasons could be populism, oil economy, political instability and ideological essence of the country.  Its an political economy related paper.

The following order can be a good instruction for the paper:

1) Introduction – describe the problem or issue in general with respect to the middle east (can be
paraphrased, but not directly copied from the book, can use original sources)
2) The Country – describe the history of the problem or issue in the country you have chosen to
focus on (can be paraphrased, but not directly copied from the book or you may need to find
original sources for this if it is not covered in the book)
3) The Nature of the Problem or Issue Today  and in the last few years
4) Solution(s) to the Problem or Issue – think about realistic solutions, what could be done to address the problem in the iran
5) Reasons why the Solution(s) may be hard to achieve – what might hold back the solution(s)  proposed from happening in this country
6) Conclusion

Iran’s Economic Development
            Before the Islamic revolution of 1979, Iran’s economy was rapidly developing. Under the Pahlavi era, the country experienced both political and economic stability. Iran was introduced to modern industries in 1925 by Reza Shah Pahlavi. The shah’s government invested in industries such as mining, manufacturing, as well as constructions. Industrial plants were also established along with the improvement of infrastructures.  Similarly, the state also took advantage of the country’s rich oil reserve and abundant raw materials through export. Germany became its main trading partner as it contributed almost 50 percent of its foreign trade. The United States and Soviet Union were also important trading partners during this period. However, not everyone enjoyed the benefit of industrialization. Primarily an agricultural country, about 90 percent of agriculture workers suffered from this economic reform as modern sectors absorbed a menial four percent of the labor force (Illias, 2010, p. 3).          
            During the reign of Mohammad Reza Shah Pahlavi, there was an obvious lack of economic developments although the country experienced a brief surge in oil revenue from 1954 to 1960. Subsequently, the national currency plummeted down as the foreign trade depreciated. Inflation similarly increased which placed the country in the brink of economic downfall. The government passed a number of policies in an attempt to combat such problems. These however, only resulted in the further decline of per capita income and very minimal economic improvement (Illias, 2010, p. 4).
            By the 1970s, Iran opened its doors to foreign investments and imports. This caused the country’s economy to increase as construction, gas, and oil hiked to 500 percent. The revenue which the government received from oil made up bulk of the country’s total revenue as it remits more than $20 billion every year (Illias, 2010, p. 6).
            By 1979 however, the revolution changed Iran’s political and economic acceleration. The reign of Ayatollah Ruhollah Khomeini transformed the country into an internationally isolated economy. The Iran-Iraq War which lasted from 1980 to 1988 pushed the nation into severe economic decline with a significant decrease in oil production and high levels of inflation. Unemployment was also rampant at that time with Iranians from the middle and lower class faced limited work opportunities. Iran’s economic downfall continued with the embassy-hostage crisis that took place in Tehran. Consequently, the international community pressured Iran to stop its nuclear programs as well as its support for terrorist organization. Such events pushed the international community to implement economic sanctions by limiting and curtailing financial and commercial business with Iran (Illias, 2010, p. 7).
            By the 1990s, Iran worked hard to rebuild its war-torn land by attracting international investors as well as by enhancing foreign relations. An economic plan which included liberalized trade was also implemented in an attempt to recover its economy. Despite of the efforts however, the country continued to suffer because of the decrease in the international prices of oil. Additionally, Iran opposed the United Nation sanctions against nuclear energy development which caused travel bans and lower investments from other countries (Illias, 2010, p. 10).
Despite of their rich oil reserves as well as the high oil prices in the recent years, Iran’s economy continues to stagnate because of several factors. This includes poor domestic environment, poor government leadership, bruised international relations and reputation, as well as inadequate investment.
Ilias, S. (2010). Iran’s Economic Condition.  Congressional Research Service. Retrieved 27 June
2013 from

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