Iran’s modern economy is transitioning into a free market. However, Iran, compared to other countries in its region, is progressing very slowly.
“Iran’s economic freedom score is 41.8, making its economy the 171st freest in the 2015 Index. Its score has increased by 1.5 points since last year, with improvements in five of the 10 economic freedoms, including labor freedom, the control of government spending, and monetary freedom, outweighing a decline in business freedom. Iran is ranked last out of 15 countries in the Middle East/North Africa region, and its overall score is well below the world and regional averages.”
On a scale from the extreme command economy of North Korea to the extreme free market of Singapore, Iran falls under the command category, though it has been shifting towards a more moderate system in recent years.
Iran is a mixed economy and is thus largely controlled and regulated by the Central Government and traditional aspects of Middle Eastern society. The command aspect of their system grants the state control over all large-scale industries ranging from the mining of natural resources to banking, and results in common government corruption and mismanagement. The governmental sanctions that were enacted in 2010 have shrunken Iran’s economy to between 15 and 20% smaller than before sanctions were established (time.com: 3/27/15) , and have left Iran able to access only one fifth of the money held in international accounts, thus revealing the central governments power to establish economic stability within the country. Iran’s economy also contains elements of Middle Eastern Tradition, such as Bazaars, which are urban marketplaces where international and national trade takes place. Bazaars are a foundational element to Iranian culture, as they have existed since the 16th century, and are identified with the traditional culture of the country. These mass marketplaces allow the economy to thrive through the customary exchange of goods and services, therefore exhibiting the traditional aspects that affect the economy.
An Iranian bazaar:
With Iran entering into the new nuclear deal, it will become possible for it to enter the international banking system. As it becomes integrated into the world market, it will begin to shift even more into the moderate economic zone that many world powers occupy.
Post by Misha Zaied, Will Lattimore, Meliah Capistrano, and Devon Smith