The Effects of War and Peace on Foreign Aid on Iran
Prior to 9/11 and the invasion of the Middle East by the U.S., the countries in this region, from Afghanistan to Pakistan to Iraq, Egypt and Libya, had used foreign aid and investment to stabilize their governments and build up their economies. In the wake of 9/11 and with the threat of war and revolution, upheavals have occurred, governments have been toppled, and societies have been decimated. As Scott and Carter (2015) point out, “no region in the world has received more US foreign aid than the Middle East” (p. 740). Following 9/11, however, that foreign aid was coupled with invasion and investment became almost impossible. For one country in particular, Iran, which has stood relatively outside the continuing wars (aside from intervening with Russia in Syria to fight back against ISIS), the effects of war and peace on foreign aid and investment in the country have played a role in shaping the country’s stability as well. Nonetheless, Iran is seen as a central piece in the coming New Silk Road initiative led by China, which aims to connect the East with the Rest via Iran (Fallon, 2015).
In 2016, Iran received $3.4 million in foreign aid from the U.S. $2.3 million went to support infrastructure in the country and $1.1 million went to support the government (USAID, 2018). Since the Trump Administration has taken over, Iran has been targeted as an enemy to peace and has been put in the crosshairs of economic warfare. Coming under heavy sanctions placed by the Trump White House, the country’s ability to obtain foreign investment by countries and businesses in the EU and the U.S. has essentially been crippled. The result has been a quick uprising of social instability with protests growing across the country as the value of the nation’s currency falls. Sanctions have been linked to increasing inflation in the country (Ghorbani Dastgerdi, Yusof & Shahbaz, 2018) and with inflation on the rise, average members of the Iranian community have felt the pinch in everything from the price of food to consumer goods.
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With Iranian society protest, pressures is being brought on Iran’s Supreme Leader, who has demonstrated open hostility towards the U.S. as well as to Israel, a country with whom Iran has often had a tense relationship to say the least (Buonomo, 2018). The sanctions that the U.S. has leveled at Iran, plus the ending of the nuclear deal that the Obama Administration had made with Iran that would allow the country to update its energy sector and allow more foreign investment into the country has caused Iran to stumble. Even though Iran has only marginally been at war in the Middle East since 9/11, with the main fighting coming in Syria where Iranians have supported the government of Assad and assisted the Russians in fighting the insurrectionists, Iran is now caught in the middle of an all-out economic war. Its political, social and economic systems are being subjected to outside pressures, placed on the country mainly by the U.S., which has acted to unilaterally end the nuclear deal that other countries—particularly EU member states, China, and Russia—have publicly sought to uphold. Still, with the threat of sanctions against any business that works with Iran, many companies, such as Boeing, are holding up deals and walking away from negotiations, leaving billions on the table.
In times of peace, Iran has been able to accept foreign aid and investment from industrialized countries like China, Russia, the member states of the EU and even the U.S. These investments and aid packages allowed the country to build up its infrastructure and make its society one where culture and learning were appreciated and supported (Tajeddini, 2016). The culture of Iran was able to strengthen over time as a result of other nations recognizing Iran’s importance in the Middle East and its geopolitical position as a major player between the East and….....
Buonomo, T. (2018). Iran's Supreme Leader: An Analysis of His Hostility Toward the US and Israel. Middle East Policy, 25(1), 33-45.
Dollar, D. (2018). Is China’s Development Finance a Challenge to the International Order?. Asian Economic Policy Review, 13(2), 283-298.
Fallon, T. (2015). The new silk road: Xi Jinping's grand strategy for Eurasia. American Foreign Policy Interests, 37(3), 140-147.
Ghorbani Dastgerdi, H., Yusof, Z. B., & Shahbaz, M. (2018). Nexus between economic sanctions and inflation: a case study in Iran. Applied Economics, 1-19.
Scott, J. M., & Carter, R. G. (2015). From Cold War to Arab Spring: mapping the effects of paradigm shifts on the nature and dynamics of US democracy assistance to the Middle East and North Africa. Democratization, 22(4), 738-763.
Tajeddini, K. (2016). Analyzing the influence of learning orientation and innovativeness on performance of public organizations: The case of Iran. Journal of Management Development, 35(2), 134-153.
USAID. (2018). Iran. Retrieved from https://explorer.usaid.gov/cd/IRN?fiscal_year=2016&measure=Obligations