Wednesday, November 23, 2011

Is Iran about to collapse?

Regarding the pressure of sanctions the United States and Britain are leading against Iran, there is a presumption of a collapse in the Iranian economy. The United States and Britain are targeting Iran´s banks and oil industry after following the International Atomic Energy Agency´s report that said Teheran worked for many years to develop nuclear weapons and it is still doing so.

As a result of these sanctions, there are two central narratives that affirm that Iran is suffering a collapse. First of all, Iran is running out of money. However, this statement does not correspond to the facts, as the World Bank sets the economic growth of Iran at 3.0% in 2010. Furthermore, Iran seems to be economically isolated. On the other hand, foreign direct investment to the country has increased exponentially from $1.6bn to $3.6bn, but it does not mean that the Iranian government does not have economic problems: corruption is a big problem of Iranian´s economy and there is a structural inefficiency. The United States and the European Union are disqualifying themselves from the Iranian market and China and Russia are benefiting from that.

Iran has developed in the technological aspect, due to systematic investments in a functioning research and development infrastructure. There has been a growth in scientific publication. They are also developing a Nan technological center and 4% of GDP is set aside to research and development. Recently, Iran successfully launched the Rassad satellite.

Secondly, there is another statement that augurs the decease of the Islamic republic. The author argues the idea that the Iranian state is collapsing “is ideologically opportunistic and remote from the political realities in the country”.

In addition to the fact that the Iranian state is remaining stable, there is no over dependency on the west that could lead into a crisis, and there is no submission to Israeli demands. The country emphasizes on national independence and the confrontation over the nuclear file nourishes that nationalism.

Iran is one of the few major economies that has maintained positive growth since the 2008 global economic crisis, despite sanctions imposed to the country. But there is no doubt that the economy of Iran continues to be encumbered by high unemployment, inflation, expensive subsidies, corruption, and an inefficient public sector. The percentage of the country's wealth devoted to the development of weapons of mass destruction continues to be a controversial issue in the West.

Source: http://www.guardian.co.uk/commentisfree/2011/nov/22/iran-sanctions-economy-government

1 comment:

  1. According to the situation that the Middle- East is going through, Iran contemplates a future full of possibilities regarding their on-going nuclear energy or weapon development policies. it is certainly an unstable situation, but at the same time a much broader opportunity for the country. After the "Arab spring" phenomenon, the US and international organizations are more aware about intervening in Iran due to instability that the region is going through and the risk to turn some "friendly" Arab countries into enemies. and second, it is much easier for Iran to find support among other countries interested in nuclear energy a becoming a predominant force over the wrecked Middle-East.

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