Since its inception in 1979, the Islamic Republic of Iran has been ruled by a political system that has been intensely dominated by a closed ideology.
Based on the sharia, the system has faced a dual pressure; (like all revolutions) protecting the revolution against internal and external “enemies” and initiating/facilitating/coordinating neighbouring upheavals which would introduce similar values as their revolution. And Iran’s dual pressure has not only influenced the political and social orientations of the country but also shaped its economic fundamentals directly.
Due to ideologic disclosure intervening every dimension of the daily life, autarchic practices fuelled largely by country’s vast energy resources and punitive policies carried out by the international community, Iran’s economy has not been able to integrate itself to the global markets during the post-revolution era. This isolation which has also led to irrational management of economy, is basically risen from nationalist and anti-imperialist tendencies that has found its voice during the first half of the 1950s.
More than a century, the people of Iran have tried to introduce democracy to their country. Although, the Constitutional Revolution (CR) took place in 1907 intended to replace absolute monarchy with parliamentary monarchy, it had a limited success. The dictatoria brought by the CR (not intentionally) has prevailed until 1950s. However, in the begining of 1950s, a conflict has occured between nationalists led by the Prime Minister Mohammed Musaddık himself and the Shah on Shah’s powers, influence on economy and nationalization of Iranian oil.
This conflict has led to the fall of Musaddık by the US-led coup in 1953. Originating partly from the fear of Soviet dominance over Iran, this coup enable Shah, who left the country during the upheavals, to restore and extend his power through strict measures. But these measures could only worked for another 20 years.
Despite the popular uprising in late 1970s embraced groups from different ideologies and political orientations, the islamic clergy has seized power during the turmoil and requalified the uprising as an “Islamic Revolution”. This new ingredient (religion) has further complicated Iran’s sui generis ideologic tendencies at that time. However, security and political environment was so unstable that it is widely recognized that the new regime, which has organized a comprehensive purge towards opposition groups, has lost a significant amount of financial and human capital during the early years of its reign.
Nonetheless, vast energy resources, a major source for budget revenues, has enabled Iran to preserve its anti-western, fundamentalist and nationalist ideology and repressive political system against “internal and external enemies” for over 30 years.
Ostracized by the international community from global politics and markets, Iran has established a closed economic system which lacks transparency, income equality and efficiency in terms of production of goods and services. Hence, this system currently provides a limited level of prosperity to Iranian people which is way below its potential. Together with political repression and social tensions, these economic woes paved the way for the rise of the opposition, despite regime’s attempts to choke it. Having difficulties to supress the opposition, ayetullahs often resort to subsidies which could be deemed as basic tool in terms of maintaining economic leverages. However, subsidies, when used as a long term policy option, would cause heavy burdens on national budget and macroeconomic imbalances. And the islamic clergy’s frequent use of religious references does not help either.
In sum; the current situation of the Islamic Republic could be defined as a two way street. As the regime tries to buy out loyalty and support (be they domestic or foreign) through oil revenues, country’s overall economy and the prosperity of an average Iranian deteriorate. In this regard, this blog believes that neither a sanction nor a military intervention could overthrow the Islamic Regime at the moment. It is the oil market which has the final say.
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