MaxShimba
Platinum Member
- Apr 11, 2008
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Iran Economy on the Verge of Collapse
There seems to be somewhat of a consensus that sanctions against Iran are working. Exports are way down, revenues are suffering, and vital resources are drying up. However, most people ignore the fact that Iran's economy has been struggling to keep its head above water since the 1979 revolution.
Just days before new talks with the P5+1 on Iran's nuclear program, President Ahmadinejad recently stated, "We must say to them that we have that much saved that even if we didn't sell oil for two to three years, the country would manage easily." He suggests that Iran has enough reserve cash on hand to weather the effects of sanctions, but this simply isn't true.
Historically, Iran has used a series of five-year plans to manage its economy. Every plan thus far has been a failure. Recurring goals include the elimination of subsidies (finally accomplished in 2010), less state control, increasing foreign direct investment, reducing inflation, expanding non-oil sectors, and job creation. The inner circles of the Iranian government are rife with indecision based on a clash between those who favor a more progressive economic stance that would integrate more fully with world markets and a traditional, protectionist model that wants to maintain state dominance.
Due to this constant battle, economic reform moves slowly. Combine this with Iran's resource curse and the fact that the country continues to allow its energy sector to dictate its fate, and you have a recipe for imminent disaster.
Iran Economy on the Verge of Collapse