Between Development, Growth and Survival: Some Current Features of Iran’s Model of Socio-Economic Development

Abstract

In recent years, conservative forces in Iran have lambasted their moderate and pragmatic rivals for their inability to solve the country’s economic issues and improve the living standards of its populace. However, since Ebrahim Raisi won the presidential election in 2021, Iranian conservatives have had their own chance to tackle the country’s internal challenges, being the last of the political forces without direct influence on the economic decision-making system for a long time. Nevertheless, their failed attempts to foster economic growth under sanctions pressure may prove critical to the Islamic Republic. Not only the conservative part of the establishment but the entire political system may risk losing what remains of its credibility with the Iranian people, who could perceive it as incapable of eff ectively managing the economy. Furthermore, the government’s success in resolving the current socio-economic development issues is also pivotal to the political future of E. Raisi. His failure would deprive him of any opportunity to claim the post of the next supreme leader of Iran. Meanwhile, the accumulated structural problems of the Iranian economy and the external sanctions pressure can render achieving economic progress a daunting, if not insurmountable, task. This paper seeks to elucidate why there is signifi cant social tension in Iran, resulting in periodic outbursts of protest, and why the economic situation is deemed a crisis, despite the relative resilience of the Iranian economy to external and internal challenges, as well as the macroeconomic performance dynamics, which are not necessarily inferior to those of Iran’s regional neighbors. To answer this question, the paper analyzes the main economic challenges facing the country’s leadership and the extent to which the goals and priorities of the implemented “resistance economy” doctrine provide an adequate response to them. As a theoretical tool, the author employs the ideas of M. Todaro, A. Sen, S. Smith, J. Foster, and C. Handy, justifying the need for any state to transcend the simple parameters of economic growth in formulating its development strategy and think more comprehensively, focusing primarily on creating a social and economic environment that is comfortable for its citizens. As a result, the author concludes that the model of the Iranian economy that has been formed in an aggressive environment prioritizes the survival of the existing political system, approaching the issue of economic growth as secondary and failing to satisfy some popular needs beyond the basic ones. It is incapable of ensuring comprehensive sustainable socio-economic development, which over time leads to the accumulation of internal tension in Iranian society.