Relying on single source of revenue such as oil, was a wrong
policy from day one. Iran is a big country, with good productive
lands and enough water sources (if it is used properly).
It has been estimated that Iran is sitting on 83 -85 Billion
(thousand millions) barrels oil. It means one eleventh (1/11) of
world oil.
Iran's oil has been abused over years in particular over last 21
years, through wrong agreements and wrong handling of oil wells.
(to read more about typical
agreement go to foot note 1)
An oil well requires to be pumped (injected) by gas so that a
comprehensive and total production is achieved. Over last 21 years
due to Iran-Iraq war and lack of knowledgeable technicians
(most migrated to other countries)
most oil wells
inside plateau of Iran have died or are about to die.
This wrongdoing reduced the reserved capacity to 42 Billion
barrels. Iran is the second producer of gas (natural gas). This
product requires planning and pipeline.
While Iran was busy in war and struggling with its interior
turmoil, the U.S.A. in collaboration with Turkey signed an important
agreement with separated states of Russia, at north of Caspian Sea (Mazandaran
Sea), which are the most richest oil territories. It is notable that
most of oil in this region is located on Iranian shores.
First oil well reached production in 1908 in Masjed Soleyman
(Iran). Until 1953 the total revenue in Iranian hands was almost
$360,000,000. Whereas England received 12 times of this amount
reaching ($360,000,000 X 12 = $4,320,000,000), which is a lot of
money for England!
Iran's revenue through sales of oil between 1953-1979 is
estimated at $35 Billions. Estimated revenue between 1979-1999 is
$290 Billions.
As you have noticed I have based the starting point at 1953
(People uprising against Mossadegh, returning Shah = 28 A'mordad).
This uprising set the starting point of so called revolution at
1979.
The growth that Iran experienced between 1953 - 1979 amounting
to $35 Billions is enormous if it is compared to the growth that was
experienced during 1979-2000 of $290 Billions.
Who do you think benefited from this
big chunk of money?
Most part of this National Revenue have been abused by "Mullas"
to purchase guns and ammunition during Iraq-Iran war or have been
used through different arrangements!
Iran must change it's strategies and should produce more of farm
products. Once Mohammad Mossadegh (Prime Minister prior to 1953
uprising) tried and failed reducing the nation's debt to a minimal
without using the oil revenue. During period which the
miss-management of the Mossadegh regime forced the country stepping
into recession.
Shifting from dependency on oil income will not be an easy task.
Technology, expertise, professionalism and comprehensive strategic
planning are required.
Iran has many other resources. If appropriate and modern
irrigation technique is used, the farming alone can easily replace
big part of the oil revenue.
Relieving Iran from single source of
Revenue
Relieving Iran from its single-product economy is a posing
challenge. Iran's economy very much anchors on oil, since it is the
major source of National Revenue. The income from this Natural
Resource has also become the source of much dependency for the
nation.
Iran have lost level of production of crude oil both at offshore
and onshore this adversely affected its income. This is due to a
delay in the implementation of oil projects, in simple word;
due to wrongful and insufficient investments in oil infrastructure
projects.
Iran's internal current economic situation has not kept pace
with the global economic developments. International market has
changed its strategy in usage of fossil fuel. Nowadays, the optimal
utilization is the main issue.
Since Nationalization of the Oil Industry (1951) no major
amendment has been made to Iran's oil research, development, export
and employee training. Although, Iran relies heavily and rigidly
on oil revenue, no major planning has taken to consideration, in
particular during the years 1979-2000.
Iran was a major player in OPEC. Its domestic mismanagement has
converted the oil into a single source of income. Members of OPEC
were forced to give up on the price and to increase the uncontrolled
production.
Because of certain kinds of turmoil in structure of Iran's
government since 1979, they have not been able to respond to the
rapid developments in the regional and international oil industry.
Consequently, Iran's oil wells have lost the production almost
30-50%. In order to meet its real export level in OPEC, Iran needs
to make a dramatic change in the management of its oil policy.
An immediate plan to train new experts and develop engineering
systems are an absolute necessity to fully mobilize the
present resources. Iran's oil and gas export, revenue and management
figures do not appear to be realistic.
Presently, most revenues from oil are used to purchase
unnecessary items or lost to un-explained expenses within various
levels of government such as National Iranian Oil Company (NIOC),
ministry of finance and ministry of oil. Not to mention the major
conflicts among levels of the existing theocratic government.
Whereas the crude oil price is dropping substantially.
Iran's dependency on oil is increasing dramatically. At this level
Iran is unable to produce by-products and invest in other industries
to liberate the nation from one source of income.
Nowadays it has become necessary to undertake a comprehensive
study and series of planning to liberate Iranian revenue from single
source of income.
If nation wide irrigation is modernized,
modern technical cultivation and farming is developed, by-products
to oil industry is expanded, petrochemical industries are developed,
production of hydro energy is increased, utilization of natural gas
is expanded, development and export of other resources are added to
Iran's trade, soon dependency in one source will be achieved.
Consequently, motivation of foreign nations who have been
interfering in Iran's internal affairs
(Foot note 2) will be diminished.
Such a shake-up will firstly lead to competition amongst
affiliated investors and certainly would create incentives for
better performances. Secondly, the by-products of oil, farming and
other resources will contribute to the nation's revenue and will
liberate Iran from keeping its eggs in one basket.
We must have learned our lesson from past, in particular the
very expensive lessons that Nation learned in the period of
1979-2000. US sanctions against companies investing in Iran, fast
shifting of industrial world to replace oil by another source of
energy, loss of income and increase of dependency is enough to
wake-up the policy makers of the country.
Unfortunately heavy investments in Iran's petrochemical sector,
nuclear power and other projects, which started well before 1979,
have not yet flourished. Apparently, it will take years for the
investments to yield profits.
Iran has the capacity to produce its own farming products If
supported by central government, independent investors will be
motivated, and certainly are capable to contribute to the
economy. It is provident that any government, including mismanaged
Islamic government cannot be a good investor and business body,
therefore will not be able to handle projects efficiently and
profitably.
If this is not taken into immediate consideration, soon Iran
will face a gradual decline. As predicted, shall drop to the bottom
of list of liveable countries. Iran must pay proper attention to
non-oil exports. It is necessary for all sectors to enhance their
share in the country's non-oil revenues. This requires rational
planning, investments and sustained regulations.
The nation has proved that it has capacity and potentials to
achieve a remarkable growth; not only in politic, but in invention,
industry and most importantly towards liberating the country from
dependency on the oil.
There is a high rate of visible investors in non- oil
industries and non-oil who are capable of adopting of
pragmatic approaches.
