Introduction Natural resource abundance in endowed countries previously has been considered as positive factor for economic growth. Facing with several economic, politics and social Review of Literature Natural Resources in recent decades have had considerable effect on economic literature in connection to economic performance (especially growth), regime type, inequality, poverty, and civil war. In affecting natural resource on economic development Andrew Rosser (2006) pointed out that prior to the late 1980s, the common sense concerning the relationship between natural resource abundance and development was that the former was helpful for the latter. Sandbu (2005) has reported that the past decade witnessed a resurgence of empirical research on natural resource. In the end of 1980s and early 1990s there has emerged an ample of academic research that challenged this conventional wisdom. Rather than a blessing, this literature has pointed out that natural resource abundance increases the likelihood that countries will experience negative economic, political and social outcomes (Davis et.al 2003, Ross 2001and 2003, Collier and Goderis, 2007.). An influential study by Sachs and Warner (1995) showed that countries’ rates of economic growth in the 1970 and 1980s were strongly and negatively affected by their natural resource dependence. According to Pomfret (2006), oil-producing regions seem to have not experienced any sustained employment growth and furthermore, poverty and inequality remain worse in oil-producing regions than in non-oil regions. Schubert (2006) has pointed out that oil dependent states have performed 1.7 percent worse in terms of economic growth than non-oil states in recent years. Most oil countries ... ... middle of paper ... ... curse is an undeniable problem in a majority of countries with point resources, like oil, and in spite of huge evidence in favour of this theory, the problems are not related to the resource abundance but rather the resource dependence is related to their institutions as in the case of Iran. A plausible assert provided by Thomas Brambor (2008), Contrary to claims in the literature that institutions are the result of resource abundance, we propose to view the quality of pre-existing institutions as the origin of natural resource dependence. Natural resource abundance translates into natural resource dependence only in the presence of poor institutions. Further research on the structure of political, economical and cultural aspects of institutions is needed to explain how the structure and function of institutions in Iran lead to the economic dependence on oil.
First, we will look at the positive effects of extracting oil on Anticosti Island. This discovery will have a positive impact on the economy of the province of Quebec. In many cases, we can clearly see that the economy become wealthy after the extraction of petroleum. For example: “In 1997, the Canadian petroleum industry supplied about $15 billion worth of crude oil, natural gases, natural gas liquids and refined oil products to meet our domestic energy and petrochemical needs. Without the industry, we would have had spend at least this much on imported supplies. In addition, we received $25 billion in revenues for petroleum exports in 1997.This $40-billion boost to the economy turned a potential $16-billion trade deficit into a $24-billion trade surplus” (Bott, 1999, p. 89). There is another example of a wealthy economy during the oil explorati...
The aim of this essay is to clarify how the neoclassical growth model can be used to explain economic growth by taking into account two new inputs: Natural Resources (R) and Land (T) by substantiating it with relevant research.
The Majlis’s committee lead by the Prime Minister, Dr. Mohammed Mossadeq disagreed on how the Western nation’s company, Anglo-Iranian Oil Company (AIOC) was profiting off of the oil and decided to nationalize the oil. On May 3, 1951, the Shah signed a bill nationalizing oil to end Great Britain's ownership of the oil industry. Great Britain enraged by the decision prohibited exportations of trade goods from Iran in September 1951. Great Britain also banned Iranian oil causing devastation to Iran’s economy. The effects of Great Britain’s displeasure caused The Shah to turn against Mossadeq and the people of Iran. The Central I...
Legitimation, Repression and Co-optation are the three pillars in an autocratic regime. These pillars are known to somewhat keep stability throughout an autocratic regime. Through what is known as these three pillars, I will discuss the similarities and differences between the durability of regimes in China and Iran. China is under rule by the Chinese Communist Party and Iran is ruled by Ali Khamenei who came into power after the Iranian Revolution.
In the 1970’s Iran, under Shah Mohammad Reza Pahlavi was a very centralized military state that maintained a close relationship with the USA. The Shah was notoriously out of touch with working class Iranians as he implemented many controversial economic policies against small business owners that he suspected involved profiteering. Also unrestricted economic expansions in Iran lead to huge government expenditure that became a serious problem when oil prices dropped in the mid 1970’s. This caused many huge government construction projects to halt and the economy to stall after many years of massive profit. Following this was high rates of inflation that affected Iranians buying power and living standards. (Afary, 2012) Under the Shah, political participation was not widely available for all Iranians and it was common for political opposition to be met with harassment, illegal detention, and even torture. These measures were implemented by the Iranian secret police knows as ‘SAVAK’. This totalitarian regime combined with the increasing modernisation of the country paved the way for revolution.
The middle-east has always been a hot zone for religious and political conflict but more specifically, Iran. Iran is an Islamic state where Islam is practiced within politics. The Constitution of 1979 runs off of the basis of Islamic Law. The population of Iran varies upon resources but they are all around the number of seventy million people. The country is 90 percent Shia Muslim and eight-percent Sunni Muslim.1 The rest of the country is made up of very small minority religions. The minority religions have very little influence in the country and are easily thrown around by the government and the majority Shia Muslims.
Western powers and Iran have had rocky relations for a long time, both holding deeply seeded resentment for the other that dates back much farther than the reign of current rulers from either side. The bad blood between a theocratic Iran and democratic West have been cause for much turmoil for regimes in Iran as they strive to industrialize while at the same time rejecting Western democratic ideals that, in the course of history, accompany long term economic growth. The political culture of Iran is a result of many years of distrust of American and European powers and thus is very much anti-Western, political and clerical leaders have for decades used this sentiment as means to maintain power and reject democratic reforms. It is the political culture of Iran and the culture of fierce Iranian and Islamic nationalism that has slowed much of the democratic development in the country.
Cline, Austin. "Clerical Greed and Corruption in Iran."About.com. N.p., 21 Aug 2004. Web. 13 Nov 2013.
Wright, G. & Czelusta, J. (2004). Why Economies Slow The Myth ofthe Resource Curse. Challenge, 47 (2), 6–38.
How can the presence or absence of natural resources and arable land affect a nation’s economy, regardless of the type of economic system?
In Iran, early 1900’s, discovery of oil gives the country an enormous source of wealth. The King that reign Iran from 1925 until 1941, Reza Shah Pahlavi, and his son, Mohammad Reza Pahlavi, which reign until 1979, use all the revenue from the oil export to promote economic and social development. Revolutionaries, rule by the religious leader Ayatollah Ruhollah Khomeini, took control of Iran after 1979, putting an end the Mohammad Reza Pahlavi regime. Revolutionaries change the government from being a constitutional monarchy to an Islamic republic.
Iran, which was also formerly known as Persia, has an interesting history that affects the modern day culture of the region. Iran is known for one of the world’s oldest major civilizations which has roots dating back to 4000 BC. First, the Medes occupied the region; they unified Iran as a nation and major empire. Iran was ruled by a series of empires and dynasties, starting with The Achaemenid Empire which ruled from 550-330 bce all the way to Iran’s last dynasty, The Pahlavi Dynasty, which was in power from 1925-1941 ce. The Iranian Revolution or the Islamic Revolution put an end to the dynasties in Iran after the shahs (kings) started incorporating Western ideals and philosophies into society. This brought sharp objections from religious people and they started viewing the Shahs as anti-Islamic which eventually lead to the Ayatollah regaining power over the nation. In order to have a basic understanding of the issues facing Iran today it is important to look at the past and have an understanding of the modern history of this complex nation.
Such problems as inflation, unemployment, and failed economic programs were blamed on the old scapegoats of foreigners and conspiracies instead of on fanaticism-, corruption, ineptitude, and the persecution of innocent people and inoffensive minorities (Faramain 393).” In conclusion, people in Iran could only count on themselves for survival and no one else. They suffered internally have yet to have a strong
Natural resources do help a particular country to make sure that, it grows at a rapid pace. There is an inverse relationship between natural resources and economic growth in the country. When, natural resources of a particular organization are abundant then, economic growth tends to be lower in comparison to the countries in which, natural resources are much higher. It will definitely be possible for a country to grow properly even without having natural resources. At the present time, there is a high level of globalization in the countries, therefore, the countries which have a lack of any natural resources can export the same from other countries.
Natural resources serving our need and want by providing shelter, foods, air, water and energy. However, we can see today, the exploitation of natural resources for own goods, economic gain, and development causes the excessive use of resources, deforestation and mining for oil and minerals, that finally bring to the depletion of natural resources. What are the effects if natural resources are not protect by public? As we can see today, air pollution, land and water disruption, decease such as asthma due to the air pollution are the consequences if...