A rentier state is one whose economy entirely depends on the income obtained from selling of natural resources to the outside world, in other words the proceeds obtained from renting of these resources. Natural resources in this case are oil, natural gas and other mineral elements. A major difference between a rentier state and a production state is that the former uses the rental proceeds obtained from the rest of the world to support its citizens the latter depends on its citizen’s tax to develop its economy. The rentier state theory of the Persian Gulf is a hypothesis explaining why the rentier states or the oil rich countries tend to be less developed and their governments less democratic compared to their counterparts in natural resources deficient countries. Some researchers associate underground wealth with curses. However, this theory holds water. According to Hossein Mahdavy’s rentier theory, a rentier state with a rentier economy can lead to a rentier mentality, which serves to destroy the future of that state’s economy.
The theory was first developed by Hossein Mahdavy taking into account Iran’s pre-revolution economy of the 1970’s. This theory was then adopted to suit the whole Arab world. The Mahdavy’s theory covers the whole of the Persian Gulf but it can also apply to the rest of the world.
The Iran’s oil concerned the West in this manner; Germany attacked its former ally, the Soviet Union in 1941, which on the other hand befriended Britain. Afraid that Reza Shah, Iran’s leader, would link the oil rich country to Germany, Reza’s son, Mohammed Reza, took over from his father and helped his country to get aid from Britain.
Mohammed Mossadegh, the godfather of the populist petroleum politics, forced shah t...
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Iran is so important because of its oil. Iran signed an agreement in 1942 allowing the British and the Soviets to defend their country from a possible German attack. This was mostly to protect their oil. American troops joined soon after. In the agreement, it said that the troops would leave six months after the war. In 1944, the British, Americans, and Soviets pressed for oil concessions. The Soviets decided to take action on Iran. By 1945, the oil situation was still unsettled, the war was coming to an end, and the American attitude toward the Soviet Union had changed dramatically. The Soviets had decided to take action in Iran. In 1946, the United States complained to the United Nations about the situation in Iran and accused the Soviets
Maxson, Pamela. "Reza Shah Pahlevi." Nova Online. C.T. Evans and P. Maxson, May 1999. Web. 20 May 2014.
Iran was a country ruled by the Shah (King), who began his rule in the beginning of the 1950’s. He would help Iran greatly improve conditions. He began to improve relations with the United States securing oil deposits throughout Iran with American companies. However, the shah slowly became more and more dependent on the United States. He began asking the United States for advice on almost every decision he made. Although no such reports were printed in the United States (to my knowledge) there are sources, which lived in Iran and experienced a...
...th and early 20th centuries entwined a power struggle between Great Britain and Russia, which only intensified after the discovery of oil in Iran in 1901. Following this discovery, western nations systematically exploited Iran for its natural resources, and fought to install sympathetic governments in the hopes of acquiring better oil deals, culminating in 1953 with the overthrow of Iranian Prime Minister Mohammed Mossadegh by a combination of US and UK forces (Yergin). The continual fighting left Iran a political mess that was only rectified by Khomeini’s strong, Islamic government. Though he severely limited the power of the Iranian citizens, he increased the power of Iran within the Middle East, and world at large, as its strong military presence and large oil reserves empower the country to resist interference from countries that wish to take advantage of them.
Throughout the 20th century, the United States tried to control Iran to ensure the exportation of oil to America. Shah Mohammad Reza Pahlavi came to power in 1941 and became allies with the United States. However in the 1950s, Prime Minister Mohammad Mossadegh began to gain political power. Unlike the Shah, he was extremely against western influence in Iran. Mossadegh won national elections and he demanded more power. In order to retain influence in Iran, the CIA helped overthrow Mossadegh and bring Pahlavi back to power....
The Majlis’s committee lead by the Prime Minister, Dr. Mohammed Mossadeq disagreed on how the Western nation’s company, Anglo-Iranian Oil Company (AIOC) was profiting off of the oil and decided to nationalize the oil. On May 3, 1951, the Shah signed a bill nationalizing oil to end Great Britain's ownership of the oil industry. Great Britain enraged by the decision prohibited exportations of trade goods from Iran in September 1951. Great Britain also banned Iranian oil causing devastation to Iran’s economy. The effects of Great Britain’s displeasure caused The Shah to turn against Mossadeq and the people of Iran. The Central I...
In 1952 during the Cold War, Iran was under the rule of their prime minister, Muhammad Mossadegh, who wanted to nationalize the country's oil industry. Iran had been a large producer of oil and its industry, controlled by Britain and America, was thriving. Britain and American corporations were not in favor of Mohammad Mossadegh’s newly developed oil policies, so they made a secret plan to overthrow him. They were successfully able to overthrow Muhammad Mossadegh, and in 1953 a new government was developed and controlled by Mohammad Reza Shah Pahlavi, Iran's new leader. The US has supported the Shah For twenty-six years and he became a central alley between the US and Iran. The Shah received military and political support from the US, and
...d supplies. Both countries, however, suffered a great loss, particularly financially. As Iraq emerged from the war feeling confident about its military might, it set its sights on its southern oil-producing neighbor, Kuwait (Iran–Iraq War). Iraq launched an offensive on Kuwait as both a means to even out its war debt and to gain a hold on Kuwait’s oil industry, however, this new war turned out for the worse for Iraq. In Iran, a newly elected President began a regime giving Iranian national interests primacy over Islamic doctrine (Iran-Iraq War (1980-1988)). In the end, the Iraq-Iran war displayed that neither Arab nationalism nor Islamic fundamentalism are necessarily the right choice for the political makeup of a state, but both served as the guide for which both of these countries followed and for Iran continue to follow.
The article, “Why Is There So Much Conflict in the Middle East?” written by Mirjam E. Sørli et. al corresponds a great deal with the text Politics and Change in the Middle East as far as the reasons for conflict in the Middle East. Sørli et. al disputes the idea of “Middle East exceptionalism,” which says that there is something different about Middle Easterners that make them prone to violence and conflict (142). Sørli et. al says this is not true, but rather there are very simple reasons as to why there has been conflict in the Middle East. As stated, the lack of regional natural resources such as water, oil, and arable la...
Mohammad Reza Shah Pahlavi took his father’s place as king of Iran on September 16, 1941. He made a promise to the Iranian citizens that he would increase their personal freedoms and other social changes. The Shah was allied with secularists in conflict with Muslims who disagree with the use of alcohol, movies, tobacco, gambling, and foreign dress. He also allied with the Soviet Union and Germany to get rid of the influence of Britain. About 40 percent of Iran’s trade came from Germany.
There was an establishment of Anglo-Iranian Oil Company, which is now known as the BP. Great Britain also received an excessive amount concessions from the Iranian government because of the oil that was extracted. Great Britain also helped to change Iran by showing support to the military commander Reza Khan in his coup in 1921. Reza Khan then became Rezah Shah and then he renamed Persia into Iran in 1935, into a western-style state. During World War II, Reza Shah gave his throne to his son Mohammad Reza Shah who became the leader of Iran until 1979. The rise of oil made a lot of countries greedy for the profits that they can make through Iran. When the Shah came into power he allowed these European countries to infiltrate Iran’s oil and use it to their own benefits which resulted in Iran making very little profit. The Shah, however, was able to keep most of the money and was oblivious to the problems he was creating in his own country.
Iran lost the support of the US in 1979 after the hostage crisis in Tehran, Iran. In Tehran, “66 members of the US embassy staff were taken hostage by Khomeini’s supporters” (Steele 12). The hostages were held for 444 days (Steele 12). The aftermath of the crisis was the international isolation of Iran. The US being a superpower, drove similar responses in its allies. Iran had lost a majority of their allies, which would hurt them during the war. In addition to the loss of the support of the Western countries, the Arab countries were also against Iran and supporting Iraq. The Arab countries also shared Iraq’s trepidations about the Iranian rhetoric of “exporting Islamic Revolution” (Karsh). As reported by graduate Mr. Jacek, Iran was left to defend itself economically and militarily. The other superpower at the time, the Soviet Union, had a positive relationship with Iran in the beginning. The Soviet Union had been supporting Iran in the beginning of the war. The Soviet Union then carried out an invasion of Afghanistan, and Tehran opposed the Soviet role in the invasion of Afghanistan. Iran’s relations with the Soviet Union became problematic, which negatively affected Iran (Karsh). The war with Iraq slowed down Iran’s research. Near the end of the Iran – Iraq War, Iran started working with a rogue nation, North Korea. The countries partnered up to work
Saudi Arabia, the leader of OPEC (Organization of Petroleum Exporting Companies), maintains a powerful position in negotiations with the U.S. and other countries. Its vast supply of oil directly effects per barrel pricing and is a unique bargaining tool in international politics. But Saudi Arabia is no ordinary country in today's world. Its borders are governed by a royal family of nearly 30,000 individuals, all of which share most of the wealth and almost all of the power. Its people, with foreign exceptions, are wholly Islamic and many practice the faith with a frightening sense of devotion. And despite the immense revenue generated by its oil reserves, part of its population still lives in absolute poverty. Although recently it has seen immense change, it is still a country fair behind the progressive world.
The Kingdom of Saudi Arabia is a petrostate. It is a petrostate in the sense that the oil sector dominates the national economy and international exports. (Colgan 226) This is due to Saudi Arabia’s one crop economy, oil. (Ali 100) Oil accounts for 70-80% of the state revenue as well as roughly 95% of export revenues. Before the discovery of oil in the 1930s, the economy rested on Islamic pilgrims. Containing the Grand Mosque, Al-Masjid al-Haram, Saudi Arabia gets a large influx of believers every year for the Hajj, one of the Five Pillars of Islam. During this time of year, income was made by food and shelter sold to the travelers. This was enough to support the state, but not enough to make it the monetary power it is today. What allowed for Saudi Arabia’s climb in the world economic ladder was oil. Oil has been a valuable industrial resource since the beginning of World War 1. Since then the demand for oil has progressively become higher and higher amongst industrial nations, allowing for oil rich states to receive large amounts of affluence. Among these oil rich states is Saudi Arabia, the region with the highest capacity for oil production out of the entire Middle East. From their remarkably high oil production, Saudi Arabia was able to gain considerable amounts of wealth and political significance. Oil in Saudi Arabia politically affected the Saudi government in both their foreign and domestic policy by providing economic power, the ability to fund wars, the ability to use economic diplomacy.
The Oil continues being the most important regional and global issue. Some estimates show that by 2050 80% of Middle Eastern oil will be distributed to the U.S creating control of pipelines through Afghanistan or turkey increasing the importance of the Middle East to the United States. The globalization effects many different parts of the Middle east in Different ways, Economically the Arab countries also Iran, apart from the international oil markets and their side effects, have come across many difficulties then turkey and Israel in integrating into the global economy. In 1948 after a difficult start of state establishment Israel’s economy has become the economy’s rising star for the Middle