by Steve H. Hanke
This article appeared in the October 2012 issue of Globe Asia.
Since Mahmoud Ahmadinejad first became President of Iran, in August 2005, the country’s economy has gone from bad to worse. Iran now ranks near the bottom — 144 out of 183 countries — in the World Bank’s Doing Business 2012, an authoritative report that measures the vitality of free markets and the ease of doing business. The accompanying table indicates where Iran ranks relative to other countries in the Middle East and North Africa region.
For decades, the Iranian economy has been cobbled together by religious-bureaucratic regimes that have employed mandates, regulations, price controls, subsidies, a great deal of red tape, and a wide variety of other interventionist devices, in an attempt to achieve their goals. It’s all been kept afloat — barely afloat — by oil revenues.
Shortly after Ahmadinejad took power, Iran began to draw the ire of the United States and its allies over a number of issues related to its nuclear ambitions. And, more recently, Iran’s antagonism in the Strait of Hormuz, and support of Syrian President Bashar Al-Assad, have escalated these tensions. Of late, this loose coalition of “allies” has ratcheted up economic sanctions against Iran. The accompanying chronology of events sheds light on the sanctions…