Iran's Struggle for Economic Independence: Reform and Counter-reform in the Post-Revolutionary Era (review)

This book deals with the politics and ideology of economic policy-making in Iran since the Revolution in 1979. It begins with a theoretical introduction about the nature of the Revolution and its aftermath, particularly the question of whether there was a Thermidoran reaction or a weakening of revolutionary fervor. In fact, Iran has gone through phases of partial economic liberalization followed by reaction and partial closing to external influences.

The author then traces aspects of Iran's economic history since the Qajar period and examines Iranian literature on how the country should develop. The dominant theme is that of economic relations with other, especially Western countries. Subsequent chapters examine economic policy-making since 1979 during the premiership of Mir-Hosayn Musavi and the presidencies of 'Ali Akbar Hashemi-Rafsanjani and Mahmud Ahmadinejad.

The main preoccupation of the book and the debate in Iran is with the role of foreign investment. In view of Iran's relations with the West and Russia from the 19^th century, there has always been hostility to permitting significant foreign investment or borrowing from abroad. There have been different strands to this hostility ranging from Marxist to Islamic. Since the Revolution, ideological issues have mixed with political ones in the sense that vested interests have played a role in the debate, trying to generate policies that suited their interests.

Pesaran notes the importance of Jalal Al-e Ahmad's work Gharbzadegi (A Plague from the West), written in 1962. Al-e Ahmad suggested that Iran suffered from the West and its technology: its native industries suffered unfair competition while Iranians were besotted by the effectiveness of Western machinery. The 1979 Revolution incorporated his thinking in its Islamic agenda. A closely-related issue was the balance between consumption and production. If Iran was not to become a nation of consumers and not producers, it would need foreign technology. This tension has remained part of the debate ever since. Added to this was a "distinct blend of Shi'i social justice and leftist anti-imperialism-cum-nationalism ... Different elements of this blend had been emphasized in the economic policies of each of the key post-revolutionary phases in increasingly nuanced ways: the premiership of Musavi had seen a predominantly statist economic approach; the presidency of Rafsanjani had featured a curious blend of mercantile and pragmatist tendencies; and the presidency of Khatami has been characterized by the views of an even more diverse mix of pragmatists and statists-turned-reformists" (pp. 128-129). According to Ahmadinejad, both Hashemi-Rafsanjani and Khatami had moved Iran away from the values of the Revolution (p. 161).

One of the most important measures taken by Hashemi-Rafsanjani in an attempt to reform the economy and accelerate economic growth was to "mercantalize" the Iranian Revolutionary Guard Corps (IRGC) by encouraging their economic activities.¹ This was to have profound political and economic effects; however, this whole issue is omitted by the author.

Iran's blessing and curse is oil, but the centrality of this issue somewhat eludes Pesaran. Although she notes changes in foreign investment, there are no figures on that in the oil sector. There is no evaluation of Iran's objectives for the oil sector and how successful it was in achieving them. The reason is that there was no clear debate about the issue in Iran: there were numerous debates and struggles over ideological issues fought by those with different interests, but overall strategy was subsumed in this. Those favoring more foreign investment wanted to develop the oil industry using foreign technology, capital, and knowhow. They hoped that this would spur development in the economy as a whole. Those who were more hostile came to power with Ahmadinejad in 2005. They wanted to spread the benefits of oil so that they would reach the dinner table of all Iranians, but they did not create the framework to make this...