Iran Economic Conditions in the 1990’s

By | December 15, 2021

In the last decades of the 20th century. the Iranian economy has been strongly affected by the political and military events that have affected the country ; as a consequence of this, the extraordinary expansion process, which started around the first half of the 1970s and determined above all by the very high proceeds from oil extraction (of which Iran was for a long time the second largest producer in the Near and Middle East, after Saudi Arabia), suffered a sharp setback. The strong fluctuations in the price of crude oil on international markets and the continuous consequent fluctuations in the production volume also negatively weighed, for which the government policy, implemented starting from the second half of the 1990s, has focused on greater diversification of activities in order to break the dependence of the national economy on hydrocarbons. In an attempt to get the Iran the economic emergency, and in response to the trade embargo decreed by the United States in April 1995, the government launched, with the Second Five-Year Plan (1995-2000), an austerity and reform program, pursuing the economic recovery of the country also through drastic cuts in imports. The country’s financial credibility is linked, among other things, the reduction of the huge foreign debt. An economic and financial recovery of the Iran it was favored, at the end of the 1990s, by the rise in oil prices, which significantly increased oil revenues; however, some fundamental problems remain unsolved, such as inflation, which is still very high, and the prosperity of an underground economy, which deprives the State of considerable tax revenues. In 2006, around 195 million tons of oil and 105 billion meters were produced still very high, and the prosperity of an underground economy, which deprives the State of a considerable tax revenue. In 2006, around 195 million tons of oil and 105 billion meters were produced still very high, and the prosperity of an underground economy, which deprives the State of a considerable tax revenue. In 2006, around 195 million tons of oil and 105 billion m3 were produced¬†of natural gas and both accounted for over 80% of national exports.¬†For Iran economics and business, please check businesscarriers.com.

The agricultural sector – which absorbs about 23% of the workforce and contributes to the formation of GDP for 20% – has seen its production increase; however, the agricultural balance remains passive and Iran is forced to import food and especially cereals. Only a modest percentage (10.8%) of the land area is devoted to arable land and tree crops: moreover, not all of it is used regularly, while the chronic lack of water hinders the expansion of arable areas. Main cereals are wheat, rice and barley. Among the industrial plants, cotton, beet and sugar cane have a notable diffusion; tea production is also relevant. In the province of Fars the opium poppy is grown (under strict government control). Among the other products of the earth, vegetables and fruit deserve to be mentioned; there. is one of the largest producers of dates and pistachios. Sheep breeding is relevant, for which Iranholds the fourth place in the world. Sturgeon fishing is developed along the coasts of the Caspian Sea, prized for the eggs with which caviar is prepared: a collection and processing center operates in Bandar-e-Anzali.

The political and military events of the 1990s also had heavy repercussions on the industrial apparatus, which during the previous decade had found itself in a situation close to paralysis; Subsequently, new perspectives opened up, thanks also to a liberal turn of the government, which in September 1999 announced the end of the public monopoly and the privatization of a certain number of businesses and services. However, the expansion of the secondary sector is conditioned by the scarcity of technological resources and the inadequacy of infrastructures: it is almost totally oriented to the processing of hydrocarbons, with refining and petrochemical plants, while traditional industry is of modest economic importance, in agri-food, textile and mechanical sectors.

The vastness of the territory, its orographic configuration and the distribution of the population create difficult conditions for the communication routes, which are still scarce. The road network measures approximately 172,927 km of which 125,908 are asphalted (2008). The railway network (8367 km in 2008) radiates with its main axes from the capital to Tabriz and the Turkish and Armenian borders to the West, to Mashhad to the East and to Kerman to the SE. The merchant navy (74 ships in total in 2008; 5,270,000 gross tons in 2006) has its most important ports in the Gulf (Khark, Khorramshahr, Bandar-e Khomeini, Bandar-e Abbas); less intense traffic on the Caspian (Bandar-e Anzali). The national airline serves the main provincial cities and connects Tehran (headquarters with Abadan of the major airport) to the capitals of other states; in addition, numerous airlines belonging to European, American and Asian companies make stopovers in Tehran.

Iran Economic Conditions in the 1990's