Iran: Country Overview

Executive Summary

Iran is not a country like other Middle East countries with monarchy but it has had a chronological political development for more than centuries. After an Islamic revaluation, the country has possessed a western culture and vast economic and economic growth. Its nuclear program has created global debate on sanctions against the country but it is adamant to continue its nuclear program. Besides political evolution and foreign policy, this paper will consider economic development in Iran.

Country Overview

Historical Overview

From 1795 to 1925, Iran was ruled by the Qajar family, from 1965 to 1977, it enjoyed better prosperity, extended regional influence, and comparative stability, and from 1979, it has followed a national plebiscite and was ruled by the provisional government, which was composed of the coalition of nationalist and religious leaders (Library of Congress 2006). Ehteshami (2003) argued that the foreign policy of Iran has changed as Iran and Iraq have shown the capability to cooperate with one another though from 1980 to 1988, Iran fought a bloody, indecisive war with Iraq.

Geographic & Demographic Overview

The short form of the Islamic Republic of Iran is Iran and its total area is approximately 1.650 million square kilometers, coastline includes 2,440 kilometers, located in the Middle East, bounded by Afghanistan, Azerbaijan, Pakistan, Iraq, Turkmenistan, and others.

IndexMundi (2009) stated the data of the population of Iran is approximately 66,429,284 (July 2009) and it was 65,875,224 in 2008. The population growth rate is very low (less than 1), for instance, in 2005, 2006, 2007 & it was 0%, -0.99% and -4.79 % gradually and now the growth rate is 0.84 %.

Total population of Iran from 2003 to 2009
Figure 1: – Total population of Iran from 2003 to 2009
Source: – IndexMundi (2009)

According to the Library of Congress (2008), the major ethnic groups in Iran are Persians but now there are many large and small ethnic groups. The following tables demonstrate the percentage of the various groups of people, Life expectancy, Age groups:

Ethnic Group Percentage
Persians 65.0%
Azerbaijani Turks 16.0%
Kurds 7.0%
Lurs 6.0%
Arabs 2.0%
Baluchis 2.0%
Other 2.0%
Percentage Age (Year)
22.3% 0 to 14
26.4% 15 to 30
45.9% 30 to 64
5.4% 65 and older
Life expectancy Age (Year)
women 72.4
Men 69.39
Total (Average) 70.86

Table 1: – Ethnic Group, Life expectancy, Age groups
Source: – Self-generated from Library of Congress (2008)

Government/Political Structure Overview

Library of Congress (2006) mentioned that Iran is the short form of formal name Islamic Republic of Iran, which has maintained parliamentary system to elect members of the parliament (elected by general voting) and government party has to win a majority of seats. Parliament has passed all the legislation by liberally interpreting the constitution and Islamic law but they don’t follow this approach to make decisions in case of economic, political, and social policies.

Political Evolution

Milani (2005, p. 2) argued that to analyze the political evolution of Iran it would not be wise to consider this country like the other Muslim countries of the Middle East when the other Middle East countries are still under the monarchy, the Iranian people moved for democracy and get their parliament in 1909. The Iranian Islamic culture has originated like western culture and has a long history of thinking independently for the national interest but is eager to reform. Its civilization and people’s motivation have much more advanced even than any western country. The Iranian People do not have any religious blindness and are enough conscious of their rights indigenous democratic movement. Historically the imperialist powers have extended their aggression to Iran to exploit its oil resource but the people of Iran have shown their unity to protect imperialists and their local collaborators.

Thus the local and international collaborators and policymakers of imperialists, who cry for the so-called democracy and human rights in Iran, must have to study the Iranian people and their heritage before propagating any mishaps against Iran. The last election and recent nuclear debate may rise to create the background to interfere in Iran but it would be not wise for the UN and USA to consider Iran as a game like Iraq in the name of nuclear weapon searching. Positively Iran is not a province or colony of the USA but it has independence and sovereignty. The human race has already observed the anarchist role of the USA that played in Iraq with Saddam and the humanity of this planet are no more interested to believe the USA. Moreover, the international relations of Iran are very alarming for the USA as Iran maintains dignified diplomacy has turned a tremendous number of dedicated friends from Latin America to Europe and Asia who are committed to standing beside Iran in any crisis.

Ancient Era

The ancient Achaemenian Empire was founded in 550 BC, which has turned, into Iran later on. Gradually it has ruled by Alexander the Great (330 BC), Greeks (247 BC), and Arabs in 642 AD. The Arabs ultimately ruled Iran with Islamic ideology that became the leading religion for long centuries that followed Iran as a sequence of Arab, Iranian, as well as the Turkic empire. Moreover, in the thirteenth century, the Mongol leader Genghis Khan attacked and conquered Iran and consequently ruled Iran for about two centuries. The Iranian leader Safavis has established Islam as the official religion and shaped a strapping national empire in 1501.

Shah Regime

Library of Congress (2008) mentioned that in 1795, the Qajar ancestors had set up the realm that ruled Iran up to 1925, and during this time Iran lost some of its territories to Russia. Within this period, Iran has influenced and interfered with by Russia and Britain, which shaped the local politics and trade and raised a demand for a government with accountability that ultimately turned to a constitutional reformation and set up a parliament in 1905-7 as a victory of democracy rather than a monarchy.

In 1921, Reza Khan Pahlavi took the state power by a military revolt as prime minister later on he became the shah of Iran as per parliament’s deposition in 1925. In 1951 Mohammad Mossadeq became the prime minister, who was a nationalist leader and concentrated his effort on national interest rather than the interests of Americans and the British by nationalizing oil fields. Both Britain and the United States were forced not to nationalization leave the state power.

In the sixties due to Shah’s prolongation with the USA and westerns but domestic pressure for nationalizing the oil resources, lack of political liberalization Ayatollah Khomeini stands as an anti-government leader and called for revolution but was expelled from the country in 1964. Again, in 1977-8, the anti-government movement become violent with the leadership of Khomeini and in February 1979 Shah was bound to leave the country giving the state power to Khomeini and it was the formal end of the monarchy.

Revaluation & Post Revaluation

Siddiqui (2000) mentioned that the Islamic Revolution in Iran by the leadership of Imam Khomeini exiled the US collaborating ruler the Shah of Iran and take over the state power on 1st February 1979. This victory of the Islamic revolution was a success of the long struggle and sacrifice of hundreds of thousands of people who were committed to sacrifice their life for the removal of the US shadow government and oppressive ruler Shah. Khomeini explained his objective as to put back the pro-western system of Iran by means of an Islamic sociopolitical order to establish a modern Islamic state.

From the very beginning of Khomeini’s regime, the westerns started working with the new government but in November 1979, a revolutionary student movement attacked and occupied the U.S. Embassy in Tehran and apprehended about 53 American diplomats’ convicted for 14 months and this episode derived to the U.S.-Iranian relations fall down. From 1980 to 1988, there were severe differences raised among the sensible and aggressive sections of the revolutionary regime that Khomeini checked out the need for the greater internal unity of the country but the unfortunate war with Iraq lost the life of 200,000 Iranians.

The revolutionaries uphold the parliamentary democracy with the significant majority under the presidency of Rafsanjani (1989–97), Mohammad Khatami (1997–2005), and Ahmadinejad 2005 to till keeping continuous economic reform and the normalization on priority and confronting international relationship with the USA. The foreign relations of Iran have significantly improved with a conflicting relationship with the European Union and the United States for protecting the nuclear program against international intervention.

Political Evolution after Nine-Eleven

Rajaee (2004, p.1) pointed out that the consequences of 9/11, the US government Bush has practiced a vigorous and antagonistic foreign policy for Iran and its neighbors such as the offensive attack in Afghanistan, Iraq aggression, and continuous presser on Syria and Iran. The Iran-US relation has turned more suspicious, antagonistic as well as times violent. The policy Bush has identified, as a stress on the right of the United States to use anticipatory power in opposition to terrorists as well as state sponsors of the terrorists and the success of Bush, was that his mendacious allegation against Iraq that it had a nuclear weapon and international community believed this propaganda and supported the offense against Saddam.

The US foreign policy during Bush had included an aversion to Nuclear weapons and verdict to identify Iran as a patron of terrorists even after having Nobel Prize for peace Obama is following the same directives on Iran rather than regional stability of the Persian Gulf, the Caspian Sea, and the Middle East. Obama has already threatened Iran to impose an economic embargo or even military aggression for having Nuclear weapons.

Trend of the Foreign Policy of Iran

Milani (2005, p 34) pointed out the policy framework of Iran mentioning that in 1905, secular intellectuals have the better to influence the decision-making that resulted from the constitutional reformation of 1905 and pointed as a democratic victory, which was rapidly pursued by the consciousness that merely deposes an oppressor doesn’t lead to democracy. The triumphant democracy necessitates a society with freedom to press freedom to express, the practice of tolerance that was evidenced in Iran in the twentieth century.

The Iranian society consists of civil society, rich, poor, and participation of middle class in politics as well as civic accountability, which was seriously disturbed during the Pahlavi era due to their America faced foreign policy the begins from Reza Shah Pahlavi. Shah served American interest without looking for the betterment of the people of Iran where the government was just a rubber-stamping authority to follow American commands and consequently the socio-economic changes and institutes have not developed that turned the anti-government sentiment of that people. This was the reason behind the fall of shah and the win of Khomeini.

The external motivation of the Iranian Revolution and foreign policy has to put down the wrong morally of westerns and exploitation from the world, reducing persuade of Zionism and the Jewish attack on Palestine as well as condemnation of US affiliation. Milani (2005, p 21)

The Nuclear Debate

Albright (2007, p. 2) mentioned that Iran has a huge investment in the nuclear programs for the last twenty years and gathered a wider variety of technology together with nuclear reactors, uranium renovation facilities to enrich the country with heavy water production plants as well as fuel production plants. Iran was also involved in foreign purchases with the aim to engage multiple efforts to procure research reactors as well as turnkey gas centrifuge plants from an attempt to purchase and Russia agreed to supply them in 1995.

The nuclear infrastructure of Iran is very large and rising as per known information some of the key facilities have not yet completed but it has suspected that Iran is capable of operating a large power reactor nuclear facilities in Iran which facilities are included Kalaye Electric, Gas centrifuge in Tehran, Arak heavy water reactor and the Natanz Fuel Enrichment Plant. On the other hand, the suspicion turned that Iran would have the competence to generate highly enriched uranium and any time can drive for weapon-grade plutonium to manufacturing nuclear weapons. Albright (2007, pp. 1-22)

Iran –USA Conflict & Rest of the Globe:

AFPP (2009, p. 3) has identified criteria of USA to allow scansion against Iran is as followed:

  • The great influence of Iran among the Afghanistan and Iraq struggle and security threats in this region,
  • Strapping threat of Iran to the security issues of Israel
  • Way out to face the challenge of Iran’s nuclear program,
  • Internal democracy and propels respond to the situation

RTT News (2009) reported that while USA, Britain, Germany and France as well as UN Security Council have agreed to impose further sanctions for constructing more nuclear reactors in Iran, Russia asked for more negotiations to resolution the issue and China kept silent but Iran responds that it has driving the nuclear program for peaceful national power generation purposes only. Holland, A (2006 pointed out that Venezuela ready to extend its cooperation for Iran at any strategic level. At the same time, West also propagated that time is running out for Iran to deal with the growing concerns of the world regarding its nuclear projects to hint on the potential sanctions against Iran.

Bozorgmehr (2009, p. 2) added that this stage Ahmadi-Nejad, the president of Iran addressed that his country would develop more uranium with 20% purity that is above of the 3.5% of existing production at Natanz and thus the suspicion turned closer that the country has more advanced step to make a nuclear weapon. Russia and France has interest to convince Iran to export uranium of 3.5% purity to them for further processing for medical research reactor.

King (2009, p. 2) reported that the present global polarization has created a speculating situation about to go back to the days of the Cold War as the circumstances proved that the Russians are gloomy on this present Iran issues and have get ready for any air force missions outer surface of its territory yet again. Even the question rose why USA needed to construct an anti-missile shield to look after Europe keeping missile bases in Poland and Czech Republic. It is not reliable that Europe requires any protection from against Iranian missiles, but if so, why USA when there is the European Union capable to initiate any defense project in the course of NATO and without any concern from EU, USA has direct pact with the Polish and Czech. This evidence proved that the interest of USA and the EU are not same to sanction against Iran and to go against Iran would be a blander to develop Americanization rather than globalization.

Thus, the new US strategy just before Iran have to focus on development an impression that would not prove its own naked interest without accommodating the interest of EU and Russia may not bring ultimate result on Iran issue. Moreover, Iran’s government is most conducting to huge success on its democratic movement. USA ought to end up the embargo, come for a peaceful negotiation, and substitute it sanctions for a war free world and the present humanity do not like to see any further bloodshed in Middle East by USA.

Economic Development

In order to discuss economic situation, this paper will consider Iranian exports, imports, foreign direct investment, Gross Domestic Product (GDP) and third Five-Year Development Plan.

The Iranian Exports

As Iran’s economy is dominated by the oil industry, Petroleum is the main sector of its exports and more than 80% of total export revenue generates from oil and gas though it also exports the following products:

  • Chemical and petrochemical products;
  • Food and live animals such as fruits and nuts;
  • Carpets, and Manufactured goods;
Fiscal Year Total Exports ($billion)
2003 $24,80
2004 $29,88
2005 $38,79
2006 $55,42
2007 $63,18
2008 $88,26
2009 $95,09

Direction of Exports

Country (exports partners) Percent
China 18.5
Japan 15.4
Turkey 6.9
South Korea 6.8
Italy 4.9

Table 2: – The main Export collaborates of Singapore
Source: – Self-generated from Library of Congress (2006)

Imports to Iran

According to the Library of Congress (2008) and Indexmundi (2009), Iran has imported the raw materials and intermediate goods and its other imported commodities are –

  • foodstuffs and other consumer goods;
  • technical services;
  • Chemicals and related products;
  • Machinery and transport equipment;
  • Other products and services;
Fiscal Year Total Imports ($billion)
2003 $21.80
2004 $25.26
2005 $31.30
2006 $42.50
2007 $45.48
2008 $53.88
2009 $67.25

Table 3: – Total imports (Year by Year)
Source: – Self-generated from IndexMundi (2009)

Direction of Imports

Country (Imports partners) Percent
China 13.5
UAE 9.8
Germany 9.1
South Korea 6.1
Russia 5.6
Italy 5.1
France 4.2

Table 4: – The main Import collaborates of Singapore
Source: – Self-generated from Library of Congress (2006)

Iran and its GDP

Anon (2009, p. 1) explains that the financial position of the country is much more stable than any other gulf country in the world as its GDP for 2005, 2006, & 2007 were US$ 188.0 billion, US$ 222.1 billion, and US$ 285.9 billion gradually. It also enlarged in 2008 and it was US$ 335.2 billion but at current it has reduced. Because of the global economic downturn, the real growth rate has reduced unexpectedly from 2008, for instance, in 2004 & 2007 the real growth rates were 5.1% & 7.8% respectively whereas it is now 1.5% only (Anon 2009). It should compare the recent data with previous years to assess the current economic position as foreign policy, internal political situation, oil price, and the global financial crisis have changed the business environment.

Iran and its GDP Source
Table 5: – Iran and its GDP Source: – Anon (2009, p. 1)

Foreign Direct Investment in Iran

Foreign direct investment (FDI) has remained comparatively small as IndexMundi (2009) mentioned that the FDI in Iran has measured as $6.954 billion at the end of 2008, which was $6.026 billion in 2007. On the other hand, Iranian company’s investment abroad where they have 10 % of equity is treated as Direct Investment Abroad (DIA) of Iran, which was $993 million at the end of 2008 and $903 million billion in 2007.

Year Stock of direct foreign investment – at home Rank Percent Change
2008 $6.026 billion 79
2009 $6.954 billion 84 15.40 %
Year Stock of direct foreign investment – at abroad Rank Percent Change
2008 $903 million 66
2009 $993 million 71 9.97 %

Table 6: – FDI of Iran at home and abroad, Source: – IndexMundi (2009)

Development Policies

Khajehpour (2000) stated that post-war and reconstruction-related requirements had supported the government to improve a more diversified and effective financial structure, as a result, the proposed development plan, which emphasized privatization and liberalization policies. He also added that to develop a plan it should require to assess the loophole of current position such as –

  • Absence of a competitive environment;
  • Lack of legal and political stability;
  • Absence of real civil society institutions;
  • Distorted Market Structures
  • Legal barriers;
  • Lack of transparency (Corruption)
  • Terrorism;
  • Its overall policies;
  • Khatami and challenges of the economy

Moreover, the world oil price has a direct impact on its budget as Iran generates 80% of export revenue from oil and gas but it is ill in production, in distribution, and consumption, so, to remove economic illness, it has passed the Third Five-Year Development Plan. Khajehpour (2000) argued that the development plan has identified the problems (such as its economy was unproductive, stagnant, and coarse) and recommended the solutions as well. This plan stated that –

  • It is essential to eliminate production as well as investment barriers;
  • it should control macro-economic policies such as fiscal, monetary, and trade, policies to attain sustainable growth and improvement;
  • It should restructure the public administrative system, decrease the public sector’s financial responsibilities, and privatization.
  • It should promote non-oil exports;
  • it should also reform the structure of the market, normalize monopolies, and boost competition in economic performance;

Conclusion

Under the present global recessionary economy, the world is temper with the atmosphere of the cold war days on the Iran issue. Humankind is no more interested to see any more bloodshed in the Middle East. The USA and the westerns need to come to a resolution of Iran’s issue in a peaceful manner rather than an embargo or sanctions.

Reference List

AFPP (2009). Iran Gateway, American Foreign Policy Project. Web.

Albright, D. (2007). Iran’s Nuclear Program: Status and Uncertainties. Web.

Anon (2009). Iran. Web.

Bozorgmehr, N. (2009) Defiant Iran plans more uranium enrichment. The Financial Times Ltd. Web.

Ehteshami, A. (2003). Iran-Iraq Relations after Saddam. Web.

Holland, A (2006). Venezuela Iran’s Best Friend? p. 1. Web.

IndexMundi (2009) Exports, Import& GDP of Iran. Web.

Library of Congress (2008) Country Profile: Iran. Web.

Khajehpour, B. (2000). Domestic Political Reforms and Private Sector Activity in Iran. Web.

King, C. (2009). The U.S., Russia and the spin-off from Iran, AlJazeera Publishing, Dubai, UAE, pp. 2-5. Web.

Milani, A. (2005). U.S. Foreign Policy, and the Future of Democracy in Iran. Web.

Rajaee, B. (2004). Deciphering Iran: The Political Evolution of the Islamic Republic and U.S. Foreign Policy after September 11. Web.

RTT News (2009). Ahmadinejad: Sanctions Will Not Affect Iran’s Nuclear Program. Web.

Siddiqui, I. (2000). The Islamic Revolution in Iran: an inspiration, an example and an experiment. Web.