Dr. Sahand E.P. Faez, PhD

Introduction

The purpose of this essay is to give a brief account of Iran’s internal structure; Economic and Political. The reason for such an endeavor is to show evidence as to why Iran and China would collaborate quite extensively. Even though, China is a fully atheist society, while Iran’s constitution is based on a deity religion; Islam. Despite this fact, Iran and China were business partners for the past 40 years. Such a firm partnership may be because of the +2500 years of shared history; or it may be because of their shared hatred for the United States and all that it entails. Nevertheless, the alliance between the two states, given their geopolitical importance, does possess analytical importance amongst scholars as well as policy makers. To shed more light on this argument the current essay will continue as follows: First Iran’s political structure as well as the view of the Iranian people regarding their own political system will be discussed. Next, Iran’s economy will be analyzed from several points of view with emphasis on its labor market. Finally, a brief historical account of Iran-China relations will be presented. This will be complemented with an argument on the possible effects of the Belt and Road Initiative (BRI) on Iran’s national and International position.

Iran’s Political Structure

In this part a brief overview of Iran’s political structure will be discussed. The main objective here is to show some evidence for the statement that Iran is a democracy and its political shortcomings are the result of human error and not that of design.

General Structure

In 1979, after the loss of many lives and a long and costly social revolution, for the first time in 2500 years, Iran became a democracy. It changed its name and structure from an aristocratic system with the Shah being on top of everything, into an Islamic Republic with the Supreme Leader supervising the Macro-Strategies, while a president who is elected by the people would see over the operational aspects of the country. Iran’s constitution comprises of 177 articles, many of which insisting on the people’s right and duty in making the key decisions. The same as Abraham Lincoln’s famous quote:

Government of the people, by the people, for the people…

The very same argument can be found in several articles of Iran’s constitution. For instance, article 3 part 7 clearly states:

Full participation of all the people in defining their political, economic, social and cultural fate

According to the constitution, every decision has to be taken by the people; either directly or through proxies. Direct selections include choosing the members of the council of elites who will then appoint the Supreme Leader; selecting the president through a free and national election; and the members of the Parliament. Afterwards, the Supreme Leader, with the council of the “Expediency Discernment Council” chooses the head of the Judiciary Body who will then choose the 6 Law Experts of the Council of Guardians; they need the approval of the Parliament before they can assume office. The President will choose his/her cabinet whom the Parliament must approve. The Supreme leader will appoint the 6 clergymen in the Council of Guardians.

Iran’s political architecture

Just as other democracies, there are several checks and balances in Iran’s political structure to prevent any political body of becoming an unaccountable dictator. In fact, article 3 part 6 clearly states the eradication of any form of “dictatorship, unaccountability, and monopolistic behavior” as the duty of every and all Iranians. The main checks and balances stated in Iran’s constitution, are as follows:

  • The Council of Elites (Chosen by the People) will oversee the actions and decisions of the Supreme Leader;
  • The Council of Guardians will make sure the enactments of the Parliament are in accordance to the constitution as well as to the teachings of Islam;
  • The Parliament (Chosen by the People) will oversee the actions of the President and his/her Cabinet, making sure they do not overstep their boundaries;
  • The Judiciary body will oversee the actions of every Iranian including the Supreme Leader and the President to assure their compliance with the law.

What these arguments suggest is the fact that on paper, Iran is a fully fledged democracy in which every decision is made by the people; either directly or through proxies. However, as the next section shows, in practice, Iran is not a fully functioning democracy.

People-State Interaction

On June 18th, Iran’s 13th presidential election will be held. Through this process, by the majority of people’s vote Iran’s 8th president will be selected to serve as the representative of Iranian benefits. Just as other democracies, Iran also conducts pols to see to which direction the public are leaning. In the latest pole the public were asked several questions, including the following three:

  • Do you will to participate in the upcoming election?
  • Do you think the future state will act better?
  • Do you have trust in the Joint Comprehensive Plan of Action (JCPOA)?
Figure 2: Iranian’s faith in its Politics

According to the results of the pols, more than half of the public are not willing to participate in the upcoming election. Furthermore, 67.2 percent of the public claim they do not believe anything would change. In other words, no matter who is the president, the situation will remain as it is. Finally, the trust in the government’s actions is considerably low. 53.4 percent of the participants showed lack of trust in the JCPOA. In conclusion, the problem with Iran is not a poorly designed system. It lies with the people who are active inside this mechanism. 

Iran’s economy

In this section, an account of Iran’s economy will be presented. The reason being the fact that the state of Iran’s economy, if not the most, is one of the most important reasons for the current interconnected relationship between Iran and China. In other words, as the following arguments would show, the poor state of Iran’s economy is one of the main incentives for Iran seeking a partnership with China on several national and international endeavors.

Economic Prospects

When the new regime (Islamic Republic of Iran) took the seat of power from the Pahlavi’s, Iran was faced with several economic issues. On one hand, before Islamic Republic of Iran could gain its international legitimacy, it went under an eight-year enforced war with Iraq; followed by another eight years of rebuilding the ruins of the revolution plus the war. Just as Iran started to breathe some oxygen, a massive wave of international sanctions started to hit its economy. At the moment, Iran is under more than 1,600 sanctions which could somewhat, if not fully, explain the crippled economy depicted in the following table.

Indicator20205 Year Average
Inflation Rate34.19%22.19%
Exchange Rate (Rials/USD)250,000111,891
Growth Rate0.80%4.57%
Gini Coefficient40.31%39.99%
Economic Openness44.73%45.08%
Iran’s Selected Key Economic Indicators (2020)

Given the above mentioned figures, Iran is considerably reliant on international trade. Iran is and has been for a long time a petroleum exporter. It was and still is one of the biggest oil exporters of the region as well as the world. One considerable result of such reliance on international trade can be seen in the poor performance of the other sectors after Iran went under numerous sanctions. As a result, over the past five years, not only the inflation rate were considerably high and the growth rate considerably low; but also one cannot overlook the fact that not all benefited from the little economy left equally. The 40.31 percent Gini Coefficient and the 39.99 percent 5 year average depicts a massive tilt towards the rich.

The Labor Market

The chart below shows the current state of Iran’s labor market. What the chart shows is the result of a forty-year poor labor market. In 1979 a revolution resulted in a 180 degree regime change; followed by an 8-year war with Iraq; followed by more than 1,600 sanctions over a course of 14 years. All of these, combined with a massive boom in population in the 1980s and 1990s has pushed Iran’s labor market into a corner.

Given the figures presented here, on one hand, less than half of the population who could seek employment are actually doing so. The numbers for women is considerably lower in comparison with men. The main reason for such numbers is the market’s unwelcoming environment for the newcomers. As it is shown in the above chart, more than 20 percent of the newcomers of the labor market fail to get the job they are seeking. As a result, instead of seeking jobs, most of the newcomers look for opportunities outside of Iran’s borders. At the moment amongst the highest supplied jobs are English Proficiency Test Preparation Courses, Official Translations, Thesis Writing and Consulting for Foreign University Admissions.

Iran-China Relations

In this part an account of Iran-China relations will be discussed. The tool used for this purpose will be the trade between the two states between the years 2015 and 2020. Moreover, an analysis of China’s Belt and Road Initiative (BRI) and how Iran could be a significant asset in its success. Will be presented.

The Existing Trend

The year 1979 is a considerable milestone for both Iran and China. In this year, Iran changed its entire political structure and for the first time in 2,500 years began experiencing democracy. In the same year, the People’s Republic of China began getting international recognition as the mainland China. In other words, the two states began their journey on an international level from this year.

Sharing a certain level of animosity towards the United States, as the head of the evil imperialistic world, made China and Iran great partners. They both needed many things the other state had; thus, they began their trade in 1979. The first steps were taken during the eight-year war between Iran and Iraq. During that time China provided Iran with different warfare products including but not limited to several shipments of AK47s.

As the chart below depicts, Iran’s international trade is quite dependent on China. Since 2015, more than 20 percent of Iran’s foreign trade was conducted with China. One key point to be made here is the fact that until 2017, the share of Iran’s export to China somewhat equals its share of Import from China. For many years, due to heavy sanctions, Iran’s financial sector was and still is cut off from the rest of the world. As a result, most of its trade are done in cash or in the form of a barter. Moreover, after the United States left the JCPOA in 2017, Iran’s options in trade became more and more limited. Therefore, the share of Iran’s trade with those countries which were willing to ignore the sanctions increased considerably. Many of Iran’s domestic products rely on foreign intermediate inputs. With heavy sanctions under the maximum pressure regime since 2017, increase in Iran’s reliance on Chinese consumption goods seems logical. In other words, since Iran could not produce its needs inside its borders, it had no choice but to get them from outside; and China seems to be one of the only suppliers to which Iran has access.

Share of Iran’s trade with China in Iran’s total trade (2015-2020)

The Belt and Road Initiative

In 2013, president Xi Jinping announced the start of the One Belt One Road project. It was later on called the Belt and Road Initiative. This project which some call the biggest global infrastructure project is supposed to begin in China and end in Europe both on land and in sea. Since 2013, several aspects of this project commenced in several countries including Pakistan and Cambodia. A considerable share of the BRI on land goes through the Middle East. As one could see in the map below, nearly 20 percent of the Belt goes through Iran.

The only suitable competition for Iran with enough capital and infrastructural capacity is the state of Saudi Arabia. However, Saudi Arabia is more leaned towards the United States; the main competition for China in the region. This in turn makes Iran an irreplaceable partner for the success of the BRI. Another implication of the BRI is the fact that if successful, it will render the +1,600 sanctions against Iran mute. Since Iran is going to be responsible for overseeing nearly 20 percent of the belt, which would support a big chunk of global transport, putting the state under sanction seems more or less impractical.

These arguments plus the signing of a 25-year MoU between Iran and China indicate that Iran is going to be part of the BRI and as a result, this initiative will give Iran more leverage in moving passed so many sanctions. Given the magnitude of this infrastructural project could help Iran in overcoming its employment issues. In other words, despite all criticisms, if conducted fairly, the BRI might actually be what Iran needs to get out of the deep hole it has been thrown into via 40 years of sanctions and war.

The Belt and Road Potential Map

Dr. Sahand E.P. Faez received a PhD in Econometrics and Development Economics from the University of Mazandaran, Iran in 2018. His main focus was on human rights in the labour market by studying the concept of Decent Work. At the moment he is pursuing a PhD in International Relations at GIIP, NCHU. His area of interest is international relations of the Middle East and its effects on human rights in the region.

Email : sahand.faez@gmail.com

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s