The Iranian Regime and Missed Opportunities

A Pause

Iran, with its strategic geographic location, natural resources, and human capital, could have become the engine of development in our region, playing a role akin to that of China in Asia: building its economy, investing in its people, opening up to the world, and transforming its potential into employment, production, and prosperity. However, this would have required a political choice that prioritized the interests of the state and its people over the logic of revolution and the expansion of influence.

Iran is a vast country, featuring mountains, rivers, plains, and coastlines, as well as historical, cultural, and religious landmarks. It possesses significant oil and mineral resources and a large population base. These assets could have made Iran a tourist destination, a source of food and industrial goods, and an economic partner for Gulf states and the wider world. Yet, realizing this potential requires stability, regional cooperation, modern infrastructure, and efficient resource management, particularly of water, which has become a genuine challenge.

Since the establishment of the Islamic Republic in 1979, the regime chose a different path. It made the "export of the revolution" a cornerstone of its foreign policy, intervened in the affairs of its neighbors, and sponsored armed groups linked to it in various countries across the region. Consequently, much of Iran’s energy was diverted from development and integration toward managing disputes and conflicts, eroding opportunities for trust and good neighborliness.

Iran’s economic difficulties do not stem solely from its political choices. External sanctions and pressures have contributed to complicating the situation, but regional tensions and policies have increased the cost of isolation and narrowed the people’s opportunities to benefit from their resources. Acknowledging certain achievements of the Shah’s era does not mean ignoring its authoritarian nature and injustices. Social gaps widened during his rule, space for opposition narrowed, and intelligence agencies tightened their grip on key societal structures. Nevertheless, Iran witnessed modernization programs, including the 1963 "White Revolution," which featured agricultural reform, literacy campaigns, healthcare initiatives, expanded political rights for women, alongside infrastructure development and industrialization. Although this experience had its imbalances, it laid a foundation that could have been built upon within a more open and just system.

However, the new regime remained captive to a transnational revolutionary rhetoric. This highlights the comparison with China, not to suggest that the two experiences are identical, but to demonstrate the impact of political choices on the fate of a nation’s potential.

When China began its economic reforms and opening-up in the late 1970s, coinciding notably with the success of the Iranian Revolution, it maintained the rule of the Communist Party but changed its economic management tools. It expanded markets, investment, and trade, and leveraged foreign expertise and technology. Policies shifted toward creating factories, jobs, exports, and growth in education and infrastructure. The World Bank estimates that China succeeded in lifting approximately 800 million people out of extreme poverty during the four decades following the start of reforms. By 2024, its GDP reached approximately $18.7 trillion, making it the world’s second-largest economy by nominal GDP.

The Chinese experience was not a magic formula; it relied on massive investments, a favorable global market, and was accompanied by challenges related to inequality, debt, and rights. However, its key lesson is that leadership prioritized improving living standards and increasing production, allowing for economic flexibility, rather than focusing on exporting ideology and managing conflicts at the expense of development.

As for Iran, despite its energy resources, educated population, and strategic location bridging Asia, Europe, and the Gulf, it has failed to translate these assets into sustainable development. World Bank estimates indicate that its economy will contract by approximately 2.7 percent in the fiscal year 2025/2026, amid persistent inflation, declining real incomes, and ongoing sanctions, tensions, and trade disruptions. These figures do not encapsulate the lives of Iranians, but they reveal the gap between available opportunities and actual achievements. Recovery does not begin merely with the lifting of sanctions, although easing them opens important doors; it also requires institutional reform, transparency, and an investment-friendly environment that ensures the fruits of growth reach citizens. Nations are not measured solely by their wealth, but by their ability to harness it and to translate politics into public service.

The point is not that Iran could have simply copied the Chinese model, nor that the comparison ignores differences. Rather, the argument is that choosing good-neighborly relations, ceasing interference in others’ affairs, and directing resources toward education, health, employment, and production would have made Iran a pivotal partner in the region’s renaissance, rather than a source of tension and anxiety.

Iran is not permanently bound to its current trajectory. The region needs a system that ensures stability for its people, respects the sovereignty of its neighbors, and contributes to building regional cooperation. History shows that nations have transformed their circumstances when they revisited their choices and prioritized development. The question remains: When will Iran’s energies shift from instruments of influence and conflict to bridges for development and peace?

Former Bahraini Minister of Labor and Social Affairs