Economy, Domestic Economy

The Power of Interdependence

Saeed LeylazSaeed Leylaz

Political power follows economic power. The statement seems to be the very essence of an opinion piece published by Iranian economist Saeed Leylaz on the website of Tehran Chamber of Commerce, Industries, Mines and Agriculture. The translation of the article follows:

Iran is back in the international arena, thanks to the Joint Comprehensive Plan of Action (the formal name of the nuclear deal Iran signed with the six powers). The existing world order imposed by major powers cannot be defied. Under the circumstances, Iran has only two choices: either to isolate oneself and go down the same road as North Korea or to integrate into the global order by gaining economic and scientific clout.

During the past half-century, Iran has pursued the goal of self-sufficiency. The interesting point is that the same strategy—that is replacing imports and promoting exports—was followed by the Pahlavi dynasty in the final 20 years of their rule.

Needless to say, this strategy is not of much use now, as it was not of much use in the past 60 years. What is really needed is a fundamental change. This change, I believe, is welcomed by the top authority of the country. Those who have studied the 24-point general policies of Iran’s Resistance Economy—outlined by the Leader of Islamic Revolution Ayatollah Seyyed Ali Khamenei—have definitely noticed that. The bitter experience of international sanctions brought home to us the fact that what might protect us on international stage is neither self-sufficiency nor economic and political isolation; rather it is creating mutual dependency.

China, South Korea, Turkey and India managed to secure the permit from the United Nations and the United States to continue to buy crude oil from Iran despite the sanctions, only because they were too dependent on Iran and were not able to cut the cord all of a sudden. Even if the US had banned them from buying Iran’s oil, they would not have been able to follow their orders.

Had we made 50 countries dependent on us instead of five, 50 nations would have stood up to the US. Take Russia, for example: Countries relying on the Russian economy are many more than those dependent on Iran. This makes the imposition of sanctions on Moscow more difficult. Therefore, if we are willing to preserve our independency and have a say in the global community, we must boost our economy by claiming a bigger share of the gross world product.

  Global Trade

Iran accounts for as little as 0.04% of global trade compared to the United States’ 30%—that is 60 times more than Iran. Forced to choose between Iran and the US, countries will go for one that has a 50- to 100-fold bigger share of international trade.

Countries can only defy world powers based on their own economic weight. The likes of Vietnam, China and France no longer take a backseat to the US. In fact, they decided to change their involvement with the world from a military one to an economic one. With regard to our 60-year experience, there is no option but to shift our geopolitical approach to the one that involves interaction with the world order.

On how the current economic order follows the political order and whether political disparity is a good reason for economic confrontation, we need to say that essentially 100% of political order emanate from the economic order. With more than two-thirds of global wealth in the hands of the US, Japan, China and the EU, it is clear they give other countries short shrift. These four powers are the main decision-makers in the world because the rest of the world rely on these four major powers—directly or indirectly.

Russia is still a military powerhouse but its economic clout—except in its neighboring countries—has eroded in the past 25 years. Even Russia is getting more and more dependent on these four main blocs. Therefore, we need to expand our economic power and take a bigger share of global output, if we want to leave a footprint on the world order. Without question, Iran cannot advance its political goals with a 0.04% share.