Beyond Iran: Time To Focus on the Economy

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A cleric walks past a currency exchange shop in Tehran's business district on January 17. Iran’s nuclear deal with the United States has caused concern in the Arab region. REUTERS/Raheb Homavandi

By Dr. Habib Al Mulla

Iran is not unique among the diverse nation states of the Middle East in terms of the pressures influencing its actions on the global stage.

However, it is a particularly dramatic example of just how compelling those pressures can be.

One can argue that based on past actions, such as a willingness to open up to the West, the Iranians do not seem to want to live in the age of an ongoing revolution as much as they wish to lead a stable and prosperous life.

In fact, the Iranians, much like any other population, seek jobs, a stable currency, and affluence to create a secure future for their children.

No official in his right mind would dare deny his political constituency this, and Iran’s obvious motive behind the recent nuclear deal would ultimately be lifting the sanctions which hung so heavy on its populace.

An Unfortunate Timing

No sooner were the sanctions lifted than the oil market spiraled further downward and since, Iran’s core economy has remained at risk.

Tehran’s apparent reliance on higher revenues from selling its oil, which it had stocked over the past years, seems to be facing a hiccup as oil prices dropped under $30 a barrel in January, and faltered under $35 so far.

Meanwhile, the Chinese economy faltered as well, generating a mood of global uncertainty as keenly felt in Tehran as on Wall Street.

Under such pressures, governments of all stripes will often go looking for scapegoats, whomever they may be.

In Iran, the temptation has exacerbated because the imminent lifting of economic sanctions had raised expectations.
It shows that the same basic economic prods are at work here as they have often been at work in other countries that make fateful decisions to go to war or persecute minorities.

A Need for Diversified Economies

It is practically difficult to name a single country in the Middle East with an economy diversified enough to withstand these recent buffetings and the political pricks that follow.

“Diversified” is a magic word; if there is an elixir, it is that kind of sound economic modeling that we must seek—for Iran, Iraq Afghanistan, Jordan and Saudi Arabia, even throughout the region. The oil producers are paying now for their past privilege because as oil prices fall, so does their socioeconomic self-assurance. The one great long-term goal for the region has to be an economy that does not depend on one product; that is sufficiently hedged to weather diverse global storms.

With diversification of revenues comes a whole new perspective on how modern nation states need to operate. As long as welfare systems define the public sector in the Middle East, those nations will be belligerent.

As long as no-tax regimens are the order of the day, sufficient infrastructures will not be built. The people of the region will not have sustainable blueprints for personal and collective progress. And if oil continues to falter, what resources can be expected to maintain the status quo?

Political Games

Right now, Iran is playing both sides of the fence: placating the West while expanding and saber-rattling its own region.
Iran’s aggravating tensions with Saudi Arabia, which spiraled out of control leading to the Kingdom—and its allies—severing their diplomatic ties with the Islamic Republic after angry mobs attacked the Saudi embassy in Tehran following the Kingdom’s execution of Saudi Shiite cleric Nimr Al Nimr last month, implies that Iran still intends to play an aggressive and destabilizing role in the region.

At the same time, Tehran’s release of 10 U.S. sailors last month, after their vessel strayed into Iranian territorial waters, might seem a diplomatic master-stroke, as if to commend the U.S. nuclear arms and sanctions’ deal, which has significantly eased tensions between the two countries.

But the dynamics here are more fundamental and subtle than either of what the previous broad scenarios entail. With much needed steps to address the socio-economic issues at hand rather than carrying on with its unfeasible dream of regional hegemony, Iran’s retrograde strategy will eventually come up short.

The rest of regional powers, however, must answer for their own internal responsibilities—to expand healthcare and education systems, and to create wealth tomorrow where there is no wealth today.

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