Effect of the Economic Sanctions Against Iran

Abstract

Long before the Islamic Revolution the Shah embarked on economic modernization plans backed by oil production amounting to 6 million barrels a day (b/d). Between 1968 and 1973, the years of the fourth five-year plan, economic growth was in excess of 10 per cent per year. By the years of the fifth five-year plan (1973–1978), the Iranian economy had changed in character, from a traditional economy based on such products as foodstuffs and textiles, to one based on heavy industry, mainly in such fields as oil refining, petrochemicals and steel-making. This industrial reform inevitably made Iran highly dependent on the Western industrial countries, principally the United States, the EEC and Japan. Table 9.1 shows that the total volume of imports grew by nearly 20 per cent each year from 1976 to 1978, with imports from the major industrial states growing at about the same rate. In 1978, imports from the USA, the EEC countries and Japan accounted for 78.5 per cent of total imports, with those from the Soviet bloc accounting for no more than 5.5 per cent.