The Relationship between Economy and Foreign Policy: The Case of Iran (2011-2016)

Year 2018, Volume: 1 Issue: 1, 66 - 76, 21.12.2018

Sayyad Sadri Alıbabalu

Abstract

Since 2011, Iran has had two problems in its state-run and oil-dependent economy. The first problem was a set of severe sanctions against Iran for its nuclear program. The second was the
war in the Middle East after the Arab uprisings in which Iran was engaged directly or indirectly. Along with other factors, especially the corrupt management in the economy, Iran's economy suffered structural bankruptcy. The statistics show the depth of the impact of these two factors. The comparison between the two periods of 2005-2010 and 2011-2016, shows that in the second period the Iranian economy has damaged seriously. In fact, Iran's foreign policy was facing serious challenges before 2011, and UN Security Council resolutions also put pressure on it. Under the effects of these fluctuations, the non-oil economy's production capacity declined, and Iran’s currency lost its value especially after Donald Trump rising to power in the United States. The effects of these problems are concretely seen in the Iranian economy. In these few years, a huge number of factories were affected by the crisis. But, after assignment of an agreement named The Joint Comprehensive Plan of Action in July 2015, some economic indicators are recovering. The purpose of this study is to identify the relationship between Iran's economy and foreign policy, especially in the case of Syria and Iraq, which has been conducted in a descriptive-analytical manner. The results of the study indicate that Iran's economy is strongly linked to foreign policy, and if the crisis continues in the Middle East, Iran's economy will suffer more. 

Keywords

Iran, economy, foreign policy, stagnancy

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