Chapter 3: Persian Gulf, Arabian Peninsula
Iran: System
Essentials
Economy
/ Trade / Petroleum /
Agriculture
Overview
/ Leadership / Infrastructure
/ Population / Fielded Forces
/ Table of Contents
Siphon irrigation being used in a sugar-beet field near Qazvin
Economy
Iran's economy is a mixture of central planning, state ownership of oil and other large enterprises, village agriculture, and small-scale private trading and service ventures. Over the past several years, the government has introduced several measures to liberalize the economy and reduce government intervention, but most of these changes have moved slowly because of political opposition. Iran has faced increasingly severe financial difficulties in 1992-93 due to an import surge since 1989 and general financial mismanagement. At year end 1993 the Iranian Government estimated that it owed foreign creditors about $30 billion; an estimated $8 billion of this debt was in arrears. Estimated overall growth was a robust 6.3% in 1992 and a moderate 3% in 1993.
Trade
Iran's import partners are Japan, Italy, France, Netherlands, Belgium/Luxembourg, Spain, and Germany from which she purchases a variety of goods such as machinery, military supplies, metal works, foodstuffs, technical services, pharmaceuticals, and refined oil products. Total imports were valued at $23.7 billion in FY92.
Earnings from oil exports--which provide over 90% of Iran's export revenues--are providing less relief to Iran than usual because of declining oil prices. Other commodities which Iran exports are carpets, fruits, nuts, and hides. In FY92, Iranian exports totaled only $15.5 billion.
Petroleum
Oil revenues have been affected by the decline of oil prices. Oil accounts for 90% of Iran's exports; because of reduced revenues, the government has imposed austerity measures, adding to the hardships of the Iranian people. In 1993, Iran's OPEC quota was about 3.4 million barrels per day, and estimated production was 3.5 million barrels per day.
Agriculture
Agriculture accounts for about 20% of the GDP. Iran's principal agricultural products are wheat, rice, other grains, sugar beets, fruits, nuts, cotton, dairy products, wool, and caviar.
The country is not self-sufficient in food; agriculture has suffered from shortages of capital, raw materials, and equipment, as well as lingering after-effects from the war with Iraq. In addition, a major area of dissension within the regime has been how to proceed with land reform. Finally, Iran is an illicit producer of opium poppy for the domestic and international drug trade. A net opiate importer, Iran is a key transshipment point for Southwest Asian heroin to Europe.
