Iran's Struggle for Economic Independence: Reform and Counter-Reform in the Post-Revolutionary Era (Routledge Political Economy of the Middle East and North Africa)

241 Pages·2011·1 MB·English

by  Evaleila Pesaran

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Iran’s Struggle for Economic
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Independence
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It is often assumed that Iran must necessarily submit to the forces of globaliza-
8 tion and liberalize its economy, but the country’s ruling elites have continued
throughout the post-revolutionary era to resist these pressures for neo-liberal
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economic reform, seeking to survive in the battlefield of today’s globalizing
economy while remaining loyal to their own rules of engagement. This
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book analyzes the dynamics of economic reform in the Islamic Republic of
Iran as they have played out in this post-revolutionary struggle for economic
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independence from 1979 up to the present day. It shows how, although some
2 groups within the Iranian elite are in favor of opening up the economy to the
inflow of foreign capital—believing that lasting independence requires
3111 economic growth powered in part by investment from abroad—others argue
that such economic liberalization might endanger Iran’s national interests and
4 put the survival of the post-revolutionary regime at risk.
By examining the political causes of the ongoing tug of war that has taken
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place between these two sides of reform and counter-reform, this book
provides a new approach to understanding the complex process of economic
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policy-making in the Islamic Republic of Iran, which will be relevant to future
examinations of the political economy of the Middle East.
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Evaleila Pesaranis College Lecturer in Politics at Murray Edwards College
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(founded as New Hall) and Pembroke College, University of Cambridge, UK.
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20111
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The Routledge Political Economy of the
Middle East and North Africa Series
Series editor: Hassan Hakimian
London Middle East Institute, School of Oriental and African Studies,
University of London.
Editorial Board:
David Cobham, Professor of Economics at Heriot-Watt University, UK.
Nu’man Kanafani,Associate Professor of Economics at the University of Copenhagen,
Denmark.
Massoud Karshenas,Professor of Economics at the School of Oriental and African
Studies (SOAS), University of London, UK.
Jeffrey B. Nugent,Professor of Economics at the University of Southern California,
Los Angeles, USA.
Jennifer Olmsted,Associate Professor of Economics at Drew University, New Jersey,
USA.
Karen Pfeifer, Professor of Economics at Smith College, Northampton, Massachusetts,
USA.
Wassim Shahin, Professor of Economics and Dean of Business School at the Lebanese
American University (LAU), Byblos, Lebanon.
Sübidey Togan, Professor of Economics and Director of the Centre for International
Economics at Bilkent University, Ankara, Turkey.
Jackline Wahba,Reader in Economics at the University of Southampton, UK.
Tarik Yousef, Dean of the Dubai School of Government, UAE.
1. Trade Policy and Economic 6. Economic Performance in the Middle
Integration in the Middle East and East and North Africa
North Africa Institutions, corruption and reform
Economic boundaries in flux Edited by Serdar Sayan
Edited by Hassan Hakimian and
7. Economic Liberalization and Turkey
Jeffrey B. Nugent
Sübidey Togan
2. State Formation in Palestine
8. The Political Economy of Aid in
Viability and governance during a social
Palestine
transformation
Relief from conflict or development
Edited by Mushtaq Husain Khan
delayed?
3. Palestinian Labour Migration to Sahar Taghdisi-Rad
Israel
9. Money in the Middle East and North
Land, labour and migration
Africa
Leila H. Farsakh
Monetary policy frameworks and
4. Islam and the Everyday World strategies
Public policy dilemmas Edited by David Cobham and
Edited by Sohrab Behdad and Ghassan Dibeh
Farhad Nomani
10. Iran’s Struggle for Economic
5. Monetary Policy and Central Independence
Banking in the Middle East and North Reform and counter-reform in the
Africa post-revolutionary era
Edited by David Cobham and Evaleila Pesaran
Ghassan Dibeh
Iran’s Struggle for
Economic Independence
Reform and counter-reform in the
post-revolutionary era
Evaleila Pesaran
This edition published 2011
by Routledge
2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN
Simultaneously published in the USA and Canada
by Routledge
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Routledge is an imprint of the Taylor & Francis Group, an informa business
This edition published in the Taylor & Francis e-Library, 2011.
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© 2011 Evaleila Pesaran
The right of Evaleila Pesaran to be identified as author of
this work has been asserted by her in accordance with sections 77
and 78 of the Copyright, Designs and Patents Act 1988.
All rights reserved. No part of this book may be reprinted or
reproduced or utilised in any form or by any electronic, mechanical,
or other means, now known or hereafter invented, including
photocopying and recording, or in any information storage or
retrieval system, without permission in writing from the publishers.
Trademark notice: Product or corporate names may be trademarks
or registered trademarks, and are used only for identification and
explanation without intent to infringe.
British Library Cataloguing in Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging in Publication Data
Pesaran, Evaleila.
Iran’s struggle for economic independence: reform and counter-
reform in the post-revolutionary era / Evaleila Pesaran.—1st ed.
p. cm.—(The Routledge political economy of the Middle East
and North Africa series)
Includes bibliographical references and index.
1. Iran—Economic conditions—1979–1997. 2. Iran—Economic
conditions—1997. 3. Iran—Economic policy. 4. Investments,
Foreign—Iran. I. Title.
HC475.P437 2011
330.955—dc22 2010043835
ISBN 0-203-81835-0 Master e-book ISBN
ISBN13: 978–0–415–59025–9 (hbk)
ISBN13: 978–0–203–81835–0 (ebk)
For my parents

Contents
List of illustrations viii
Acknowledgments ix
List of abbreviations x
Note on transliteration xi
Introduction 1
1 Reform and counter-reform: the theoretical framework 7
2 Tracing the desire for economic independence 21
3 Consolidating the post-revolutionary economic system 39
4 Redefining revolutionary goals 63
5 Moving toward reform 97
6 Resurrecting the Revolution 128
7 Negotiating the path of counter-reform 161
Conclusion 189
Glossary 196
Notes 198
Bibliography 205
Index 218
Illustrations
Figures
7.1 Inflows of FDI to Iran, 1979–2009 183
7.2 Oil exports and prices, 1979–2009 184
Tables
3.1 Inflows of foreign direct investment to Iran, 1979–1988 58
3.2 GDP and imports, 1979–1988, in billions of rials at constant
prices 59
4.1 Oil exports and prices, 1988–1991 81
4.2 Foreign debt, 1989–1993, in billions of US dollars at constant
prices 86
5.1 Oil exports and prices, 1996–1998 112
5.2 Inflows of foreign direct investment to Iran, 1989–1999 113
6.1 Foreign investment permits issued by OIETAI, 2001–2004 132
6.2 Inflows of FDI to Iran, Jordan and the UAE, 2000–2004,
in millions of US dollars and as percentage of GDP 135
7.1 Oil exports and prices, 2001–2009 171
7.2 Inflows of FDI to Iran, Jordan, and the UAE, 2005–2009,
in millions of US dollars and as percentage of GDP 183
7.3 GDP and GDP growth rate, 2005–2009, in billions of rials at
constant prices 184
Acknowledgments
This book began many years ago when I began to write my doctoral thesis
at the School of Oriental and African Studies (SOAS) at the University of
London, and the journey I have traveled since then has been both exciting
and challenging. I am hugely grateful to all of those who have helped me
along the way.
First and foremost, my thanks go to Charles Tripp, Massoud Karshenas,
and Ali Ansari for their helpful guidance and support. I am enormously
grateful to Hassan Hakimian for initiating this project, to Peter Sowden for
giving me the opportunity to have it published, and to the anonymous
reviewers at Routledge who provided many useful ideas on the manuscript.
I am also grateful to Murray Edwards College and Emmanuel College at the
University of Cambridge for allowing me the time, space, and resources with
which to complete this book.
My two research trips to Tehran were memorable as well as informative,
and I express my heartfelt appreciation to everyone who took the time to help
me find all the information I needed. I am particularly indebted to Mohammad
Tabibian, Mohammad Sadeq Janan-Sefat, Narges Barahoi, and Masoud
Derakhshan, all of whom worked tirelessly to make my time in Tehran as
productive and efficient as possible. Furthermore, it is important to remember
that, without the enthusiastic participation of various interviewees, this book
could never have been written. I would like them all to know how much I
appreciate their willingness to share with me their experiences, opinions, and
knowledge of the Iranian post-revolutionary economy.
Some sections of Chapters 3 and 4 are based on my 2008 article “Towards
an anti-Western stance: the economic discourse of Iran’s 1979 revolution,”
in Iranian Studies, 41, 5: 693–718. I am grateful to the editor of that journal,
Homa Katouzian, for allowing me to draw on this earlier work, and I thank
him also for his support and guidance.
Last but not least, I am thankful to Kamiar Mohaddes, for everything.
Evaleila Pesaran
Cambridge, September 2010