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.
References
Ilias, S. (2010). Iran’s Economic Condition. Congressional Research Service. Retrieved 27
June
2013 from http://www.fas.org/sgp/crs/mideast/RL34525.pdf
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