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Politics of Globalization and Iran - Essay Example

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The Islamic Republic of Iran is a country that abounds in natural resources and at the same time represents a very ancient and important civilization. Since the times immemorial, Iran has played a pivotal role in the international trade and the celebrated Silk Route that stretched between the Mediterranean Sea and China passed through this critical trade centre (Lendering)…
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Politics of Globalization and Iran
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Politics of Globalization and Iran

Most of the enervating problems of the modern day Iran stem from its complicated and atypical political system that aspires to harmonize the elements of an Islamic theocracy with a fledgling democracy (BBC). The anachronistic seeming Iranian polity is a strange mix of elected democratic institutions such as a president, a cabinet, and a parliament being constitutionally and unambiguously superseded by a gamut of unelected power centres such as a guardian council, an expediency council, and the armed forces, which are administered by the highly influential and theocratic Supreme Leader. It is realistically impossible for the foreign policy and the trade policy in Iran to remain uninfluenced by the aforementioned power centres. President Mahmoud Ahamadinejad who came to power in 2005 has been trying hard to refurbish and realign the Iran's economic policies with the contemporary global trends. At the same time, the world community is resorting to a series of measures like active diplomatic engagement and trade sanctions to alter the Iranian state and trade policies.
Iran subscribes to a primarily industrial economy that contributes more then 45 % of its GDP and is a profitable mix of oil and gas, textiles, steel, petrochemicals and automotive manufacturing (Ilias 13). The next major stakeholder in the Iranian economy is its services sector that represents another 43 % of its GDP (Ilias 13). Though the contribution of the agriculture sector to the Iranian economy is roughly 11 %, still it happens to be the major employer, absorbing nearly 20 % of Iran's workforce (Ilias 13). Iran boasts of the world's third largest petroleum reserves and the second largest gas reserves. Though the internecine war with Iraq severely jeopardized the Iran's oil production facilities, still they account for a bulk of the Iranian export earnings and are the single most vital source of government revenue. The oil sector in Iran is the primary enticer of the foreign investment and nascent fears are cropping up that such an intense concentration of investment in this sector could practically stifle the other emerging sectors in this developing economy (Ilias 13). The behemoth oil and gas sector in Iran solely comes within the ambit of state administration and are managed by the state run National Iranian Oil Company (NIOC). Being a potent and founding member of the Organization of the Petroleum Exporting Countries (OPEC), Iran wields a considerable influence in the world economy, courtesy its ability to stir the world oil supply and prices (Sarkis). The top importers of the Iranian oil are India, China, Italy, South Korea and Japan. Still, the greatest delimiting factor that the Iranian oil industry has to contend with is a constricting lack of access to the new technologies owing to highly constrained investments and the running US sanctions (Ilias 14). Going by the Iran's exclusive dependence on oil reserves for economic sustenance, its economy is pathetically susceptible to any unforeseen changes in the international oil prices (Ilias 14). Despite sitting on the mindboggling 15 % of the world gas ... Read More
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