The Islamic Republic’s Economic Failure
by Patrick Clawson
Middle East Quarterly
Fall 2008, pp. 15-26
http://www.meforum. org/article/ 1982
The Islamic Republic’s nuclear drive remains a focal point of
international concern. President Mahmoud Ahmadinejad speaks of becoming
a pan-regional if not world power.[1] Much of his defiance is fueled by
unprecedented oil income. Iran has built a US$82 billion foreign
exchange reserve.[2] But behind Ahmadinejad’ s blustery confidence and
defiance, decades-old systemic forces are eroding Iran’s economic
stability. Iran has suffered perhaps more than any Middle Eastern
country from the “oil curse.” As Iran became addicted to oil, it
postponed reform and let the rest of its economy languish. While record
oil prices insulate the Islamic Republic from the consequences of its
leaders’ decisions, any significant decline may force an internal reckoning.
The Imperial Era
As the Islamic Revolution completes its third decade, it would be easy
to blame all economic problems on its leadership. In reality, though,
economic mismanagement has remained a constant during Iran’s imperial
and revolutionary eras.
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