The Impact of War on Iran

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.
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 the West. Iran, for its part, was able to demonstrate a willingness to work with other countries, like China and Russia as well as European countries to export products and serve as a repository for foreign investment. Iran is currently engaged in talks with China for billions in loans through the China Development Bank (Dollar, 2018)—which just shows that as the U.S. tries to isolate Iran from the West in what amounts to acts of economic warfare, the East is more than willing to step in and provide the country with the soothing balm of financial stability and security that it needs to keep its citizens happy, its infrastructure running, and its government in power.
The difference between times of peace and war for Iran and how investment and aid are used is the difference between the approach of the U.S. and China towards the country. The U.S. is allied with Israel which has a long-running spat with Iran and has often accused the country of being a threat to world peace. This position of Israel, which has major influence in the U.S., has prompted the Trump Administration to halt the nuclear deal that Obama signed off on and that so many European countries viewed as a good thing for international business and for Iran as a country. But as Trump has demonstrated a desire to go against everything Obama did and to put pressure on Iran, the East, particularly China and Russia, have looked at ways to use this as an opportunity to gain advantage in the region by becoming friends and allies with the Iranian people. The Silk Road initiative of China intends to connect East and West with a high-speed rail line that goes through Iran. By working with Iran to update its infrastructure and use investments and loans to create a stable environment for its people, China has demonstrated that even in times of economic war with the U.S. Iran can still enjoy a time of peace with China. In other words times of war and peace can overlap for countries like Iran—for they may have war coming at them from the west while having peace come at them from the east.
The problems caused by the warfare of the West, especially the threat of the spread of terrorism which is largely supported by proxy by the West and its ME allies, are destabilization and a collapse of production. Iran has worked with Russia in Syria to oppose the advance of the West’s proxy armies, which have sought regime change in Syria. China attempts to gain entry into the ME through peaceful investment; the West seeks to gain entry into the ME through warfare. Iran must fight in the war in the ME to secure its own borders and protect its own interests—and the U.S. has shown that it will retaliate against countries that oppose its proxy forces. Nonetheless, China has shown that it will not allow itself to be bullied by the U.S. and that it will help a country like Iran to shore up its domestic front. The question that remains is whether war or peace will overwhelm Iran in the near-term.
In conclusion, Iran is a developing country that has received investment, aid and loans from both the East and the West. However, in times of war, which occur as a result of the U.S. not getting its way in the ME and taking its frustrations out on countries that stand in its way, Iran is subjected to economic sanctions that cause foreign investment to dry up in various sectors, inflation to occur, and members of its society to protest against the leadership of the government. In times of peace, on the other hand, which occur when nations like China make peaceful offerings of loans to Iran to help support the country’s infrastructure, that money goes to a good use and calms the waters of discontent.

References
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