Development Of Iran
...sustained and expediential growth. For the last thirty years Iran has been
experiencing boom and bust cycle rather than sustained growth. The close association between
per capita income and per capita oil revenues suggests a reason for the fluctuating level of
income. Both per capita GDP and non-oil GDP increased steadily during 1960-76 while oil
income was rising (Sewer). The decline in per capita oil revenues which started in the mid 1970s
slowed the economy, but is not entirely responsible for the one-third decrease in per capita GDP
in 1977-82 (Sewer). Disruptions due to the revolution and the war with Iraq no doubt also
contributed to economic decline. In the post-revolution years we again observe a close association
between oil and per capita income. This pattern of boom and bust is not peculiar to Iran and is
shared by other oil-exporting countries of the Middle East (Sewer) In contrast, the fast growing
countries of similar characteristics based their growth not on exports of fossil fuels but on human
capital. Replacing oil with human capital as the engine of growth in Iran would be a precondition
for long term, stable growth.
It is clear that Iran is a troubled country. They are currently troubled by international war
and civil unrest within there own country. Oil embargos and standers of exports also play a
critical role in why Iran has a hard time competing in the global market and practicing
international trade. Iran has had a troubled history, from rebellions to removal of political parties
from power. However in this paper I examine the necessary conditions for Iran to take full
advantage of its positive demographic trends that I believe will help move the country into a more
stable economic position. I identify the two most important preconditions for this to be a sound...
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