From Regime to Revolution: What Iran’s Uprising Could Entail for its Economy

By Christina Grossen and Alli Risewick

Iranians have taken to the streets to demand what was considered unthinkable by many in the Islamic Republic – a true democracy of Iran’s authoritarian democratic government. The United States has multiple interests in the outcome of these claims. First, a democratic Iran would likely address US human rights concerns, thereby improving the lives of its citizens. Moreover, a democratic Iran represents new opportunities for the US economy, or, perhaps more accurately, an opportunity to restore old economic ties. And finally, a democratic Iran could work to the strategic advantage of the US, including the opportunity to reduce the influence of unwanted actors in the volatile region.

The demand for the Iranian government to rethink its laws and give the people a better voice began in the tragedy, as revolutions often do. A 22-year-old woman, Mahsa Amini, was arrested by Iran’s morality police for breaking the country’s modesty laws. Is she guilty? Not wearing the hajib according to government standards. While she was in custody, she died, reportedly after being brutalized by authorities. Protests began shortly after and continue today in numbers unprecedented in the past 12 years.

This is not the first time that the Iranian public has supported efforts towards a secular state, however. In the 1960s, Iran took steps towards a democratic parliamentary system of government. The White Revolution oversaw land redistribution, created literacy and health care programs, and advanced the social and legal rights of women by establishing a greater separation between state and religion under Shah Reza Pahlavi. These ambitious economic, political and social reforms helped to modernize the country and address inequalities. After these reforms, literacy rates increased significantly and continued to affect communities well after the revolution changed the type of regime.

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Women also took advantage of these opportunities and continued to do so even after the Islamic Revolution of 1979. Since 1978, there has been a 933% increase in female medical specialists, and a 1700% increase in sub-specialists. Over the past 40 years, the male population of Iran has been decreasing while the number of females has been increasing. Women began to fill these gaps, especially in the medical field and women now represent a significant number of obstetrician-gynecologists, specialists in geriatric medicine, and community medicine doctors serving marginalized and forgotten groups.

The US and Iran are not economic strangers. Before the 1979 Revolution, Iran had close economic relations with the US. Trade peaked in 1978, with imports of American goods from Iran totaling $3.7 billion and American imports of goods from Iran totaling $2.9 billion. American goods such as weapons, industrial equipment, technology, agriculture and consumer goods accounted for 16% of Iran’s imports. n 2020, only $36 million was exported to Iran in the US, with medical instruments accounting for a third of those exports. As of 2022, the United Arab Emirates will account for 31% of Iran’s imports while China will account for 17%. There is significant room for US investments in Iran, an effective trade partnership, and a strategic relationship to counter regional power competition.

The 1979 Iranian Revolution led to a wave of Iranian elites fleeing the country. The exodus of doctors, lawyers, entrepreneurs, and academics all left a professional void in the regime. And there has been no improvement in Iranian emigration trends since then. During the time of the Revolution, the number of emigrants was approximately half a million. As of 2019 that number increased to 3.1 million, mainly due to poor pay and lack of jobs in Iran. But the numbers also include overseas students, as well as doctors and nurses. Currently, the median age in Iran is 29.5 years. With such a young population, it is imperative that Iran’s future includes emerging industries that can support future generations.

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Partnership with the United States would spur new economic opportunities in a democratic Iran. Many Iranian-Americans whose families fled the regime in 1979 and resettled in the United States have contributed significantly to boosting industries within technology, pharmaceuticals and entrepreneurial businesses, such as Uber. At the very least, a new relationship between the US and the Iranians would allow these successful Americans to expand their businesses into Iran. In addition, Iran is one of the leading countries in the Middle East in the cosmetics industry along with Turkey and the UAE, and this industry is expected to grow within the country by 22.72% by 2025. Focusing on these emerging markets, would draw capital into the country and help Iran recover from years of sanctions imposed by the global community. As an added benefit, expanding the domestic economy could solve its mass emigration problem. Iranians would no longer feel compelled to leave because of economic disadvantages. They would be drawn back to their country, especially medical and business professionals.

Additionally, the technology industry, which has struggled to develop and grow within Iran under the current regime, has the potential to become a powerful leveraging force under a democratic government. The Iranian government’s strict internet control and censorship of social media networks have prompted tech experts to leave the country. The establishment and freedom of the press can help draw IT industries into the country, encouraging more innovation and better development of the cyber security sector. Cooperation with US engineers and technology experts could further expand Iran’s democratic cyber security sector, giving the United States a stronger monitoring presence in the region. Also, such a US investment in Iran’s future sends an important signal that the US is committed to tackling the challenges that new democracies will undoubtedly face.

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Economic stability and freedom go hand in hand with democracy. As the citizens of Iran are already upset with the current lack of economic opportunities, Iran needs to commit itself to a market that is willing and able to make stable efforts in the future. But it is not a one-way street. This economic cooperation helps the United States by opening a profitable market that has been closed for the past 43 years. By reconnecting with their shared past, both states can build a stable and mutually beneficial future.

It’s time.

Christina Grossen and Alli Risewick are MA candidates at Seton Hall University’s School of Diplomacy and International Relations. Both are graduate student leaders for the National Security Fellowship graduate program at Seton Hall University providing research and policy recommendations to the Department of State and the Department of Defense this past academic year.

Christina is a Senior Associate Editor at the Journal of Diplomacy and International Relations and her commentaries appear there. She is also a Graduate Research Assistant and a 2022 Andi Leadership Fellow.

Alli, a Turkish-American, is an Associate Editor at the Journal of Diplomacy and International Relations and her commentaries appear there. She is also Vice President of the International Law Society at Seton Hall University and works as an immigration paralegal.

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