This literature review examines the major obstacles facing Iran's construction industry, drawing on scholarly and conference sources to identify and analyze the root causes of persistent project delays. The paper explores six interrelated problem areas: economic instability and financing constraints tied to oil revenues; a poorly trained workforce dominated by unskilled laborers; substandard building materials that fail to meet international quality benchmarks; international sanctions that restrict access to technology, investment, and global financial institutions; flawed design practices including the use of pirated engineering software; and structural tensions between government and private-sector regulations. Together, these factors produce costly overruns, safety hazards, and buildings ill-equipped to withstand seismic events.
The paper demonstrates thematic literature review organization — grouping sources not chronologically but by problem category. This technique allows the writer to show how different researchers approach overlapping issues, building a composite picture of a complex industry challenge rather than simply summarizing individual studies in isolation.
The paper opens with a framing introduction that scopes the review to delay causes rather than solutions. Six substantive sections then each address a distinct problem area (economics, labor, materials, sanctions, design, operations/civil rights), with each section weaving together two to four sources. A brief concluding summary ties the threads together and points toward the need for future solution-oriented research.
The construction industry in Iran has been plagued by persistent problems. The literature on this issue addresses the challenges Iran faces in its construction sector and discusses the major elements that hinder those who want to build in the country. Delays in construction projects are lengthy, and they are affecting the morale of workers as well as the patience of clients who have contracted out projects and wish to see them completed. In order to find solutions to Iran's construction problems, it is first important to analyze them individually in order to determine which are most significant and which are less critical in the overall picture.
All of the literature reviewed here focuses on the delays seen in the Iranian construction industry, as well as on the reasons behind those delays. It is one thing to point out that delays are common in the construction process, but it is another matter entirely to dig deeper and begin to explore why those delays occur. Finding out what is causing the delays is the first step toward discovering and implementing possible solutions. This literature review focuses only on identifying the problems, and does not examine potential solutions — that is a topic for another time. However, the literature provides vital information upon which suggestions for solving problems can later be based. With this in mind, the review is organized into sections addressing each of the main problems currently seen in the Iranian construction industry.
Among the most significant problems are the economic issues and financing difficulties seen in the construction industry in Iran (Eshtehardian & Nasr Azadani, 2011). Inflation is a serious problem, and the rate of inflation has been growing at around 25% per year at a minimum. That is a staggering figure when one considers that in most other parts of the world, inflation in modern economies typically grows between 1.5% and 4% per year. Any amount of inflation can lead to rising costs for both labor and materials, so it is easy to see that a very high inflation rate creates serious difficulties for the cost of doing business. Because Iran's inflation rate is high and continuing to grow, projects can have trouble getting started and may run out of money before they are ever finished. In addition to high inflation, the rate of economic growth is low in Iran, so the two forces work against those who want to start construction projects. While countries such as South Korea, India, and China — along with other developing nations — see economic growth rates hovering between 5% and 11%, Iran's rate of economic growth is near 2% (Eshtehardian & Nasr Azadani, 2011).
This growth rate stands in stark contrast to other developing countries, and results in Iran struggling between low economic growth and high inflation — both of which are highly detrimental to the construction industry. These economic problems also result in an average per capita income that is much lower than that of many of Iran's neighbors. For example, the median income in Europe is approximately $24,000, whereas in Iran the median income is only around $9,000. In developing countries, low incomes are not uncommon, but with a median income below $10,000 combined with high inflation and other pressures, Iran is clearly struggling economically. Whenever there are economic problems or a downturn in a country, construction of new buildings and homes is one of the first activities to slow down, because people simply do not have the money to build (Frimpong, Oluwoye, & Crawford, 2003; Khoshaghazi, 2005).
Most countries have a private sector in which businesses run by individuals rather than the government can grow and flourish (Frimpong, Oluwoye, & Crawford, 2003). It is possible to have such businesses in Iran, but the private sector is weak. Given all of the other economic difficulties, this is not surprising. It is also another reason why the construction industry in Iran is struggling and why there are so many problems within it. Businesses cannot stay open long if they do not make money, and small businesses in the private sector often close because they fail to generate expected returns. Additionally, people who want to start businesses frequently lack the capital to do so, because so many Iranians earn very little. It becomes difficult to save for anything unless one receives an inheritance or some other source of start-up capital. The absence of a strong private sector significantly harms Iran's economy, and that in turn harms the construction industry.
Financing is available for those who want to build homes and buildings, but there are actually too many methods from which to choose (Khoshaghazi, 2005). An overabundance of options breeds indecision and confusion, which are both serious problems for people trying to select the financing method that is right for them. They might end up choosing a method that is financially detrimental, and people who struggle with their finances can get in over their heads quite easily if they become involved with a company that takes advantage of their limited knowledge of financing. Getting financing and coordinating with a construction company to get a project built can be a long and very frustrating process. Many Iranians choose to avoid financing altogether because of the difficulties it creates (Asnasshari, Knight, & Hurst, 2010; Assaf & Al-Hejji, 2006).
Financing, like much of Iran's economy, is tied to the sale of oil and gas on world markets (Babai, 2011). When oil and gas prices are high, Iran has money; when prices drop sharply, there is suddenly far less money with which to work. Because Iran has not built an economy that is strong in more than one sector, it struggles easily when oil and gas prices fall worldwide. The money that is generally used to finance construction projects in Iran comes from oil and gas revenues, so a worldwide price downturn can stop people from financing new projects and can dry up funds that were previously committed to projects already underway (Babai, 2011). That leads to the delays so often seen in the Iranian construction industry, and causes frustration for both the construction companies doing the building and the clients who contracted to have the buildings completed.
In the construction industry, there are significant problems with mismatched skills and needs. The training provided does not reflect what most workers need in order to carry out the projects that are ongoing or that will be started in the future. As a result, the construction workforce in Iran is often unclear about its tasks and may lack the appropriate skills for the buildings being erected. It is therefore critically important that proper training be made available. Research projects that are intended to identify industry needs are often inaccurate, which leads to further poor training that does little to help construction workers do their jobs effectively. Most workers in this industry are unskilled Afghan refugees, and without proper training, the buildings they construct will not be safe (Eshtehardian & Nasr Azadani, 2011). Inspecting buildings and correcting construction mistakes also accounts for a significant share of the delays seen in the Iranian construction industry at any given time.
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