by Waseem Shehzad (News & Analysis, Crescent International Vol. 48, No. 9, Rabi' al-Awwal, 1441)
Early last month, the Financial Times reported that “the stock market of Iran, for a long time dogged by US sanctions, has notched up a notable achievement: ranking among the world’s best performing over the past 12 months, as domestic investors seek refuge from rampant inflation.” This is not the kind of news one expects from a leading Western newspaper about a country considered an enemy and under severe Western sanctions for 40 years.
Since day one of the Islamic Revolution in 1979, Iran has been under Western sanctions. From developing its medical sector to the level of rivaling global medical leaders and becoming a regional destination for medical tourism, to significantly reducing its dependency on oil income, Iran’s economic performance is extremely impressive.
From 2013 onward, Iran embarked on an economic program geared toward significantly reducing its budgetary reliance on oil. Even according to the US dominated World Bank, in 2014 while under severe sanctions, the Iranian economy expanded by 3%. By 2016, Iran had managed to reduce its dependency on oil revenues from over 50% to about 33%.
One of the leading economic websites covering Iran from a secular capitalist perspective noted that “in early-2014, Iran’s Ministry of Energy unveiled its plans for adding some 5 GW of renewable power capacity, mostly wind, to the country’s power fleet by 2018. Since the beginning of 2014, construction for around 400 MW of renewable capacity has started, and contracts for more than 500 MW have been awarded. The Iranian government increased its budget for renewable energy by more than 400% last year to around $60 million; although still small, the growth is going in the right direction.”
Since the US unilaterally withdrew from the multilateral nuclear agreement referred to as JCPOA, Donald Trump’s regime turned to economic sabotage in an effort to undermine Iran’s economy. Perhaps Trump does not realize that Iran has been under Western sanctions for decades and has mastered the art of bypassing sanctions.
In the field of economics trust and belief in a system are crucial factors in overcoming economic obstacles. People buy Coca-Cola in preference to other soft-drink brands because they trust and believe in the Coke brand. It is not because Coca-Cola is healthier or significantly different from other brands of soft drinks.
Iran’s ability to withstand decades of sanctions clearly created trust in the domestic market as the stock market data shows. Confidence of the domestic market and domestic consumption are crucial economic factors making Iran resistant to external economic terrorism.
Iran’s resistance economy policies outlined by Imam Seyyed Ali Khamenei insulated Iran from the severe effects of Western sanctions. One of the key aspects of its resistance economy is “consumption management based on the promotion of consumption of local products parallel to the qualitative improvement of domestic production.”
As recently pointed out by Amin Saikal, Professor of Political Science at the Australian National University, “US President Donald Trump’s approach to bringing Iran’s Islamic regime to heel clearly is not working.”
Soon after the JCPOA was signed in 2015, Crescent International pointed out that “sooner or later sanctions will be re-imposed. The Islamic leadership in Iran understands this as well. Therefore, they will make the maximum effort to use this new phase to prepare for future possible sanctions. At the economic level, Islamic Iran will continue to boost its non-oil and manufacturing sector as this is part of the resistance economic plan outlined by Imam Seyyed Ali Khamenei years ago. Iran will most probably continue enhancing its regional trade.”
Iran’s near-miraculous economic performance under very tough externally imposed obstacles is a strategic step in highlighting the fact that a non-Western economic framework can work. To understand Iran’s economic achievement, one needs to do a simple comparison of its performance with Egypt, Morocco, Azerbaijan, Tunisia, or many other countries that regularly receive handouts from Western financial institutions. They function with no obstacles within the Western designed economic system. NATO-imposed or tolerated regimes in the Muslim world are not known for any indigenous economic achievements. Their survival is due to their ties to capitalist economic institutions and following the Western paradigm.
Iran’s economic successes are deliberately downplayed, and its economic challenges exaggerated. If Iran’s stock market had underperformed, this news would dominate headlines of the corporate media for weeks. However, since its stock market outstripped others in performance, this news was barely reported. Those Western corporate media outlets that reported it did not give it much prominence.
A good example of how Iran’s economic performance is constantly misrepresented would be to recall the financial crisis of 2009. At the time, the Western media was constantly beaming absurd messages of how the financial crisis negatively affected Iran even though the Islamic Republic was under sanctions and was not exposed to the US sub-prime mortgage crisis in any way. Such false reports were deliberately spread simply to undermine the Iranian people’s confidence in the Islamic economic paradigm.
For the foreseeable future, Iran’s economic sector will be under intense pressure. It is primarily due to the fact that Western economies are not doing well. In these circumstances if an economic system outside of the capitalist framework manages to perform well, it will put the entire Western economic paradigm into question.
The economic performance of any state is dependent on several factors, not all of them related to economics. Self-confidence of leaders of any state is a crucial starting point. This cannot come about if one suffers from mental colonization as most rulers in the Muslim world do. They cannot think outside the Western framework and have little understanding or respect for Islamic principles. Most of these rulers also do not enjoy mass support. Hence, they are dependent on Western military, political, and economic support. In short, they are slaves of the West.
In Islamic Iran’s case, it has made a conscious choice to detach itself from the dependency syndrome and while it has been subjected to severe sanctions— economic terrorism, in the words of its Foreign Minister Dr. Javad Zarif — the leadership in Iran has stood firm on Islamic principles. Its success in many diverse fields is nothing short of miraculous.
Its path to success is paved by the resistance economy. This is an important lesson for other countries — Muslim as well as non-Muslim — that are subjected to Western bullying and economic terrorism.