11 November 2010

International Political Economy (USM)

Foreign trade and its importance in the economy of Iran in the international sanctions context: focus on the unilateral United States sanctions

Eduardo Oliveira*
School of Social Science |University Sains Malaysia
School of Economics and Management |University of Minho


Iran is one of the world’s most closely watched nations as a historical entity, about 2.500 years ago, of the Achaemenids Dynasty (559 to 330 BC) period. The Islamic Republic of Iran (denomination after the revolution in 1979), also know as Persia territory, as historical entity and despite political, religious, and historic dimensions of the society, Iranians maintain a deep connection to their past. The Iran’s economy is a mirror of the International Community nowadays. 

Economic policies and decision-making process in economic terms are guests from the international sanctions, particularly the unilateral sanctions from United States of America, which accuse Iran of supporting international terrorism and maintain the nuclear programme as global weapons. Kinzer et al. (2005: 61) wrote about the impact of sanctions against countries, he said “this isolation has hampered the short and long term growth of its markets, restricted the country´s access to high technology, and impeded foreign investment”. A form of foreign pressure, sanctions are typically meant to alter the policies of other countries. There is much pessimism on whether they ever work.

The main question, related with this working paper, and we should do is how Iran can trade in the economic global arena, in the contemporary global markets in the sanctions context? Can we found true economic policies in this context and with the contemporary conservative politicians, with the leadership of Mahmoud Ahmadinejad, since 2005? Can the economic sanctions destabilize the Iran government, the target of the International Community? 

Understand the political economy, especially the foreign trade and the impact of the international sanctions in the economy of Iran is the purpose of this paper, with special focus on the United States sanctions, in the line of Marinov (2005). We using the electronic database of The World Factbook published by Central Intelligence Agency (CIA), The Statistical Centre of Iran, World Trade Organization, United Nations and European Union, and a qualitative research based in published academic work until 2003.

Key-words: International community; International sanctions; Impacts; Foreign trade; Iran;