Presently Iran’s economy is largely dependent on oil revenues. The dependence began between 1954 and 1960 when a rapid and sudden increase in the oil prices led to Iranian main export being oil. In fact, between the fiscal years of 1964 and 1978 Iran’s gross product grew at the phenomenal rate of 13 percent. The oil, gas and other petroleum industries expanded by almost 500 percent. Even after the tumultuous events such as the 1979 revolution and the Iran-Iraq war oil the revenue on the oil production remained the principal earner for the government.
When one examines the attributes of a “rentier”, state Iran fits the bill almost perfectly. The Iranian government derives a large portion of its revenues from the “rent” of oil to external clients. Iran’s economy also relies on the revenue generated from the oil revenues, so its internal and domestic economies are weak and non-productive. The national economy is seen in the high unemployment and inflation rate. In addition, despite the substantive percentage of the population that engages in farming the agricultural production has fallen consistently for the last half century. It is also apparent that only a few members of the population are a part of the oil production. The final and most significant attribute is the fact that the government receives most if not all of the oil revenues.
The political result of the rentier state is that the government does not need its people for its upkeep. In contrast, most governments sustain themselves through collecting taxes from their citizens. Such a situation means the government becomes responsible to its population. In contrast, in a rentier state such as Iran there is noticeable financial disconnect between the administration and the people. Consequently, the government has only to keep its citizens in line as it earns revenues from the rent or the oil. As such, democracy in such a state is discouraged and suppressed. In the absence of the oil revenues, economic necessity would have forced the Iranian government to have genuine democracy in time. However, with the revenue the Iranian government can afford the Islamic Republicanism grand experiment.
Works Cited
Feldman, N. After Jihad: America and the Struggle for Islamic Democracy. New York: Farrar, Straus and Giroux, 2003. Online.
Karshenas, Massoud. "Management of Oil, Democracy, and Economic Growth in Iran." Future of Iran; Economy (2013): 1-7. Online.
