From Regime to Revolution: What Iran’s Uprising Could Entail for its Economy

By Christina Grossen and Alli Risewick

Iranians have taken to the streets to demand something from the Islamic republic that was once thought unthinkable – for Iran’s theocratic government to become a true democracy. The United States has many interests in the outcome of these demands. First, a democratic Iran can address US human rights concerns, thereby improving the lives of its citizens. After all, a democratic Iran represents new opportunities for the US economy, or, perhaps more accurately, an opportunity to restore old economic ties. And finally, a democratic Iran could work to US strategic advantage, including the opportunity to reduce the influence of unwanted actors in a volatile region.

Demands for the Iranian government to rethink its laws and give a greater voice to the people, began with tragedy, as reforms often do. A 22-year-old woman, Mahsa Amini, was arrested by Iran’s moral police for violating the country’s decency laws. His fault? Not wearing the hijab in accordance with government standards. While in custody, he died, reportedly from brutal treatment by the authorities. Protests began shortly thereafter and continue today in numbers not seen before in the past 12 years.

This is not the first time that the Iranian public has supported efforts towards the country’s government, however. In the 1960s, Iran took steps towards parliamentary democracy. The White Revolution oversaw land redistribution, created literacy and health care systems, and advanced social and legal rights for women by establishing a greater separation between state and religion under Shah Reza Pahlavi. These ambitious economic, political, and social reforms helped modernize the country and redress inequality. After this reform, literacy rates increased significantly and continued to affect society well after the revolution changed the form of government.

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Women also benefited from these opportunities and continued to do so even after the 1979 Islamic Revolution. Since 1978, female medical specialists have increased by 933%, and subspecialists have increased by 1700%. Over the past 40 years, the number of men in Iran has decreased while the number of women has increased. Women are beginning to fill these gaps, especially in the medical field and women now represent a significant number of obstetricians, pediatricians, and community medicine practitioners who work in disadvantaged and neglected groups.

The US and Iran are no strangers to economics. Before the 1979 Revolution, Iran and the US shared close economic ties. Trade peaked in 1978, when US imports from Iran totaled $3.7 billion and Iranian imports totaled $2.9 billion. American goods such as weapons, industrial equipment, technology, agriculture, and consumer goods, totaled 16% of Iranian imports. In 2020, the US exported only $36 million to Iran, with medical equipment accounting for a third of those exports. As of 2022, the United Arab Emirates accounts for 31% of Iran’s imports while China accounts for 17%. There is a significant place for US investment in Iran, effective trade partnerships, and strategic partnerships to counter regional power competition.

The aftermath of the 1979 Iranian Revolution led to many Iranians fleeing the country. The exodus of doctors, lawyers, businessmen and academics left behind a serious gap in the government’s expertise. And Iran’s migration patterns since then show no sign of improvement. At the time of the Revolution, the number of immigrants was about half a million. As of 2019 that number has increased to 3.1 million, mainly due to low wages and unemployment in Iran. But the numbers include international students, as well as doctors and nurses. Currently, the median age in Iran is 29.5 years old. With such a young population, it is important that Iran’s future includes emerging businesses that can support future generations.

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New economic opportunities will flourish in a democratic Iran in partnership with the United States. Many Iranian Americans whose families fled the regime in 1979 and immigrated to the United States have made significant contributions to emerging businesses within the technology, pharmaceutical, and business industries, such as Uber. At the very least, the new relationship between the US and the Iranians will allow these successful Iranian Americans to expand their businesses in Iran. In addition, Iran is one of the leading countries in the Middle East in the cosmetics industry along with Turkey and the UAE, and this industry within this country is expected to grow by 22.72% in 2025. help Iran return to years of sanctions imposed by the international community. As an added benefit, expanding the internal economy can solve the problem of mass migration. Iranians will no longer feel compelled to leave because of economic hardship. They will be drawn back to their country, especially doctors and business workers.

Furthermore, the technology industry, which has struggled to develop and grow within Iran under the current regime, has the potential to become a powerful supporting force under a democratic government. The Iranian government’s strict control of the internet and censorship of social media networks has caused technologists to leave the country. Establishing and ensuring freedom of the press can help attract IT businesses to the country and, in turn, encourage innovation and greater development of the cybersecurity sector. Working with US engineers and technologists could further democratize Iran’s cybersecurity sector, giving the United States a stronger monitoring presence in the region. Also, such US investment in Iran’s future sends an important signal that the US is committed to the challenges facing the new democracy.

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Economic stability and freedom go hand in hand with democracy. Because Iranians are already frustrated by the lack of economic opportunities available, Iran needs to commit to a market that is willing and able to provide sustainable future endeavors. But it is not one way. This economic partnership benefits the United States by opening up a market that has been closed for the past 43 years. Reconnecting with their shared past allows the two countries to build a sustainable and mutually beneficial future.

It’s time.

Christina Grossen and Alli Risewick are MA candidates at Seton Hall University’s School of Diplomacy and International Relations. Both are graduate student leaders in the National Security Fellowship program at Seton Hall University providing research and policy recommendations to the Department of State and the Department of Defense during the past academic year.

Christina is a Senior Associate Editor at the Journal of Diplomacy and International Relations and her comments have been featured there. She is also a Graduate Research Assistant and a 2022 Andi Leadership Fellow.

Alli, a Turkish-American, is an Associate Editor at the Journal of Diplomacy and International Relations and his comments have been featured there. He is also the Vice President of the International Law Society at Seton Hall University and works as an immigration attorney.

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