"It's the Economy, Stupid." Trials and Tribulations of the Iranian Economy

By Ghadar, Fariborz; Sobhani, Rob | Harvard International Review, Spring 2011 | Go to article overview

"It's the Economy, Stupid." Trials and Tribulations of the Iranian Economy


Ghadar, Fariborz, Sobhani, Rob, Harvard International Review


The possible implosion of Iran's theocratic regime due to economic pressure reminds one of the quote: "It's the economy, stupid." These famous four words from Bill Clinton's successful US presidential campaign against George Bush in 1992 have an eerie connotation when considered in the context of untangling the myriad of issues in today's Middle East, and specifically Iran. Years of economic sanctions on Iran have not changed the regime's behavior--as some in Washington have hoped for--but the behavior of the Iranian people has changed towards their government due to mismanagement of Iran's economy. Iranians know that they should be living in the midst of wealth, but their leaders have bequeathed to them an economic crisis of monumental proportions.

[ILLUSTRATION OMITTED]

The demonstrations in Egypt were initially dominated by young, educated, and unemployed citizens who poured into the streets to complain about economic conditions and the lack of opportunity. Tunisia's recent regime change was also largely due to the state of its economy. While many speculate about other nations in the region, we should not ignore one of the world's most striking economic mismanagement examples--Iran.

Assuming an average annual 10 percent growth rate since 1978, Iran should be ranked among the world's top five economies today. Unfortunately, the reality is that over 30 percent of its citizens live below the poverty line. The regime is facing its toughest challenge in its 30-year monopoly as the Iranian economy continues to feel the sting of unemployment, sanctions, shortages, layoffs, and inflation fears. This widening gap between the regime and the people is also sharply set against the backdrop of recent civil unrest in the region.

Many international eyes have been solely focused on Iran's nuclear program to the detriment of all other critical factors. While this issue is definitely one of concern, it is not the most important force at work with regards to Iran. Three decades since Khomeini declared, "Economics is for donkeys," the system he helped create is on shaky economic grounds. As Iran's Revolutionary Guard succeeds in monopolizing the engines of economic growth, it is also ironically sowing the seeds of its own potential demise. For example, since its takeover of the natural gas industry, it has not been able to secure financing for expansion of production and thus failed to increase Iran's exports of natural gas.

The lifting of subsidies by the Ahmadinejad government has been welcomed by the International Monetary Fund (IMF) as a necessary step toward divorcing Iranians from a dependence on cheap consumer goods and low gasoline prices. While this belated macroeconomic move should have happened a long time ago, the regime's underlying economic problems remain unresolved. The challenges facing Iran's economy remain the same as they did three decades ago: corruption, mismanagement of Iran's natural resources, lack of foreign investment, unemployment, brain drain, marginalization of Iran's nimble private sector, and last but not least, putting ideology before national economic interests. We only have to take a look at the former Soviet Union for a lesson in failed, ideologically-driven economies. While there were many successful external forces at play during the collapse of the former Soviet Union, ultimately the economy was what led to its downfall. The same situation is very likely to happen again in Iran. The mismanagement of the Soviet economy turned out to be a key issue in determining its fate. Even though the Soviet Union had the most abundant energy reserves in the world, its misguided energy policy turned out to be one of the most disruptive factors in its economy.

Today, Iran suffers from a whole host of economic problems that are very similar to the challenges Soviet leaders faced towards the end of communism. If we can mine from the mistakes as well as the opportunities that the past presents to us, we may be able to better deal with the Iran of today. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

"It's the Economy, Stupid." Trials and Tribulations of the Iranian Economy
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.