Could Iran’s Economy Be Huge But They Don’t Care?

Iran’s potential for a thriving economy is immense, but its realization is stifled by ongoing US sanctions. If Iran were to fully open its market to the world, it could potentially surpass some of the world's most powerful economies. However, geopolitical constraints such as sanctions have hindered its economic progress. This article delves into the factors that could make Iran a prosperous economy and the role of US sanctions in impeding its growth.

Iran: A Potential Economic Giant

Iran has the potential to become one of the most prosperous and powerful economies in the world. With a young and well-educated population, vast natural resources, and a strategic geographical location, it is poised to achieve remarkable economic success.

Young Population and Education: Iran's population is composed of 88 million individuals, many of whom are young and well-educated. This demographic is a significant factor in workforce potential and innovation.

Natural Resources: Iran is rich in natural resources, with significant reserves of metals, natural gas, and oil. It is estimated that Iran has up to 5% of the world's extractable metals. Iran also boasts the second-largest natural gas reserves in the world, surpassing only Russia, and more oil reserves than the combined total of the UAE and Qatar.

Strategic Location: Iran is strategically positioned between Asia and Europe, providing it with easy access to the world's oceans. This strategic location enhances its potential for international trade and economic growth.

The Factors of Modern Economic Growth

To evaluate the potential of Iran’s economy, it is essential to consider the fundamental factors that drive economic growth: Land, Labor, and Capital. Iran has all these resources at its disposal.

Land: Iran is home to some of the richest and best-situated lands in the world. This fertile land supports diverse economic activities, from agriculture to mining.

Labor: With a young and well-educated population, Iran has a pool of skilled and laborious workers ready to build up industries and contribute to economic growth.

Capital: Iran has access to substantial amounts of capital, which can be leveraged to build out industries and spur economic development. This is particularly important for rapid industrialization and expansion.

The Potential of an Iranian Economy on Par with Germany and Japan

Given its resources and demographics, Iran can potentially achieve economic success on par with countries like Germany and Japan. Both economies are known for their advanced industries, robust manufacturing sectors, and high standards of living. If Iran successfully utilizes its resources and capital, it could achieve comparable economic output.

For instance, Germany’s GDP per capita is around $48,000, while Japan’s is around $39,000. Iran, with its rich resources and abundant labor force, could realistically strive to reach similar levels of GDP per capita.

Current State of Iran’s Economy

Despite its vast potential, Iran’s economy is currently lagging. Its GDP is approximately $360 billion, translating to a per capita GDP of $4,091. This figure is comparable to countries like Sri Lanka and Lebanon, which are often considered to be in a state of economic failure.

Several factors contribute to this economic reality:

Authoritarian Regime: Iran is led by an authoritarian government that may not prioritize the well-being of its people. However, this is not the sole reason for the economic failure. Lack of Development: Even if the government does not care about the well-being of its people, the pursuit of economic success is essential for the nation's development and wealth accumulation.

The Role of US Sanctions

US sanctions have played a crucial role in stinting Iran’s economic growth. Since 1979, the US and its allies have imposed continuous and ongoing sanctions on Iran, preventing it from accessing international markets and capital.

These sanctions have thwarted Iran’s ability to flourish economically, particularly in sectors such as trade, finance, and manufacturing. However, international criticism of these sanctions is mounting, as they are often seen as an unreasonable means of exerting geopolitical influence.

Impact on the Average Iranian

The sanctions have left a significant impact on the average Iranian. Despite being a state blessed with natural resources and a capable workforce, the sanctions have hindered the country's ability to capitalize on its potential. The restrictions on trade and access to capital have led to a and general economic hardships.

For instance, Iran's former Huawei executive, Meng Wanzhou, was subject to a three-year arrest merely for dealing with Iran using US dollars, highlighting the arbitrary and harsh nature of these sanctions.

These sanctions not only impact the economy but also influence the daily lives of the average Iranian. Inflation, shortage of goods, and access to basic needs are some of the consequences of these restrictive measures.

Conclusion

Iran has the potential to become a major economic powerhouse, but ongoing US sanctions have impeded its progress. To unlock its full economic potential, Iran needs a more open and supportive international environment.

The world should recognize that sanctions are not an effective way to impose geopolitical influence and should reconsider its stance on this issue. A more cooperative and less restrictive approach could pave the way for Iran's prosperity and contribute to global economic stability.