In the context of escalating tensions between the United States and the Islamic Republic of Iran, a bipartisan group of six U.S. Senators sent a letter to President Donald Trump on June 18, 2019 bluntly warning that “Congress has not authorized war with Iran and no current statutory authority allows the U.S. to conduct hostilities against the Government of Iran.” The signatories of this letter, among other U.S. lawmakers, have expressed concern that the Trump Administration may utilize a nearly 20-year-old law to initiate military action against Iran without Congressional approval.
This Media Guide will explain the 2001 Authorization for Use of Military Force (AUMF), how has it impacted America’s post-9/11 foreign policy and the possibility that it may play a role in a potentially escalating U.S-Iran conflict.
When AIC last reported on Iran’s oil and gas sector in February 2018, there was a great deal of optimism surrounding its future among Iranian officials and many international investors. The sector had been boosted by the 2015 Joint Comprehensive Plan of Action (JCPOA), which relieved some U.S., UN and EU restrictions on Iran’s access to foreign investment and export markets.
Much however, has changed since May 2018, when the Trump Administration announced its intention to withdraw from the JCPOA. Despite the country being home to the world’s fourth largest reserves of crude oil and second largest reserves of natural gas, the future health of Iran’s fossil fuels sector is now shrouded in uncertainty.
Rarely would the terms “Iran” and “renewable energy” be considered as having any positive correlation. The Islamic Republic has some of the world’s largest reserves of fossilfuels and relies on their export for about half of its national revenue. It also is the seventh largest carbon emitter in the world, with its population consuming energy at a rate more than four times the global average. Only about 0.8% of the electricity Iran produces each year comes from renewable sources.
However, Iran’s leaders, particularly over the past five years, have been making considerable efforts to challenge the dominance of fossil fuels in the country’s energy mix. As part of the 2015 Paris Climate Accords, Iran pledged to reduce its greenhouse emissions by 4% by 2030 through expansion of renewable energy production and utilization. Though substantive progress has been made, particularly with regard to policy reforms and construction of green energy infrastructure, serious challenges to Iran’s renewable energy ambitions remain.
Although Iran’s 1979 revolution is known primarily for having transformed the country into a conservative Islamic theocracy, it also led to significant, progressive reforms on the country’s approach towards healthcare. The Islamic Republic’s constitution declares access to medical care a right for all citizens, and over the past three decades, Tehran has made notable investments in expanding health coverage nationwide, to good effect.
Iran spends about 7% of its GDP each year on health services and has an estimated 954 hospitals, 3,700 clinics and 6,400 rehabilitation centers. About 60% of Iran’s hospitals are state controlled with the remainder run by private companies or non-governmental organizations, including charities.
Although Iran is primarily thought of as an oil-producing country, it is also one of the Middle East’s largest and most diverse agricultural producers. Due to the country’s expansive geography and extremely varied climate, Iran is able to produce a wide range of agricultural products, including grains such as wheat, barley and rice; fruits such as melons and grapes, as well as teas and medicinal herbs.
According to the United Nations Food and Agriculture Organization, close to 30% of Iran’s territory consists of croplands and livestock pastures. From an economic standpoint, the agricultural sector makes up about 10% of Iran’s GDP and employs about 16% of its labor force. Despite its size and importance to the country’s overall economy however, Iran’s agricultural sector still consists primarily of small, privately owned farms, generally no bigger than 24 acres. (The average family farm in the U.S. state of Texas, by contrast, is about 523 acres)
Like many of its Middle Eastern neighbors, the Islamic Republic of Iran sits atop considerable deposits of fossil fuels. It boasts the world’s second largest reserves of natural gas and the fourth largest reserves of crude oil. Iran extracts an estimated 4.1 million barrels per day of crude oil and nearly 200 billion cubic meters annually of natural gas, making it respectively the world's fifth and third largest producer of these fuels. Oil is critical to the Iranian economy with about half of the country’s total revenue coming from its sale. Until recently, however, natural gas in Iran has been almost exclusively for domestic consumption.
Iran's oil and gas sector has been buoyed by the 2015 Joint-Comprehensive Plan of Action (JCPOA) which relieved U.S., U.N and E.U sanctions under which Iran’s ability to export oil and access foreign investment had been curtailed. With the European market again open to it, Iran’s oil exports have been on the rise. In 2017, the Islamic Republic exported nearly 800 million barrels of crude oil, 80% more than in 2016. These sales netted $41 billion in revenue.
A large state replete with natural resources, Iran is among the most mineral-rich countries in the world, holding approximately 7% of the Earth’s supply with 45 to 60 billion metric tons of 68 different types of minerals. Despite its natural advantages, however, Iran has failed to make the most of its mining sector. Mining employs just 620,000 people in the country and accounts for 0.6% to 1% of GDP. With 90% of Iran’s potential mines unsurveyed, some estimates put the industry’s potential worth at triple its current value. The deputy minister of Iran’s Ministry of Industry, Mines, and Trade, Mojtaba Khosrowtaj, has indicated that copper, lead, and rare earth elements could ultimately generate more revenue than the crude oil industry.
Given Iran’s geographic breadth and its sizable population, the task of maintaining and modernizing its public transportation system is immense. Cities in Iran are linked by 199,000 km of roads and 10,000 km of railroad. The country has over 300 airports. Due to heavy traffic, the metro systems in all major cities are heavily utilized to avoid the congestion above. The Tehran metro, for example, is one of the busiest in the Middle East and estimated to service between two and four million people each day.
While impressive in its scope, Iran’s transportation system is in serious need of attention and improvement. The World Economic Forum’s 2015-2016 Global Competitiveness Report ranked Iran 76 out of 140 for overall infrastructure quality (other industrialized countries in the region received much higher ratings, such as Saudi Arabia at 31 and the United Arab Emirates at 2).
Iran has a rich textile history. Archeologists can date the country’s textile production back at least 6,500 years. In those early years Persia produced tapestries and carpets for domestic and international markets, which were particularly renowned for their elaborate designs and colors. To this day, Persian carpets are still considered among the most beautiful and well-crafted in the world; many are also regarded as artistic works and showcased in museums and private collections.
Like other countries in the region, Iran faces a severe water crisis due to climate change and poor water management. One of the most visible reminders of this ongoing problem is Lake Urmia. Located in the northwestern corner of Iran, Lake Urmia’s watershed serves an agricultural region with a population of 6.4 million people. Previously one of the largest salt lakes in the world, Lake Urmia was also once a popular tourist destination. However, the last 20 years of environmental conditions and damming of tributary rivers for irrigation have shrunk Lake Urmia’s surface area by 70% and its water volume by 95%.
Claiming 21 UNESCO World Heritage sites, Iran’s courtyards and gardens, patterns, textures, and shapes are celebrated and emulated worldwide. In addition to its impressive and historic architecture, however, Iran is also home to a vibrant construction industry with a trend towards modernization. One prime example of a modern gem and model of technological achievement is the Sharifi-ha House in Tehran, designed by Tehran-based firm Nextoffice in 2013: a seven-story home with rooms that rotate and shift at the push of a button. While some Iranians bemoan this kind of change in the architectural landscape, others suggest that modern buildings are more suitable for everyday life and attracting tourists. Even the modern Sharifi-ha House, however, reflects the staying power of traditional Persian architecture since the concept of rotating rooms was inspired by old Iranian mansions, which had both summer and winter living rooms.
Iran, with its population of nearly 80 million people and recent relief from sanctions, offers significant opportunities for growth, international investment and modernization in its already strong food and beverage industry. Currently, 90% of food and beverage sales are conducted through traditional small grocery outlets and local bakeries. In 2014, 96% of bakery sales were for staples like bread. But, in a country where 65% of the population is under the age of 35, tastes are changing and companies are modernizing and targeting younger consumers by rebranding or adding new products and flavors.
There are many factors that have led to a thriving tech industry in Iran, including abundant resources, lifted sanctions, and a youthful, highly educated population. Perhaps somewhat surprisingly, the industry has also benefited in large part due to active support from the Iranian government. Over a decade ago in 2005, the Islamic Republic released a “20 Year National Vision” statement, known as Vision 2025, describing the state’s intentions to achieve “first place in the areas of economy, science, and technology in the Western South Asia region,” specifically in “high tech [software knowledge] production.”
In addition to its cultural significance, Iran’s book industry also plays a role in the economy and in matters of public policy. In 1992, the Ministry of Culture and Islamic Guidance commissioned the creation of the Iran Cultural Fairs Institute in order to establish book fairs across the country and around the world. As part of this directive, in May 2017 Tehran will host its largest literature-related event of the year, the 30th annual Tehran International Book Fair (TIBF).
After oil and gas, the automobile industry is Iran’s third largest, accounting for approximately 10% of the country’s GDP and employing about four percent of the country’s workforce. Despite setbacks from sanctions, which saw Iran pull back as the number one automobile developer in the Middle East to second place behind Turkey, the auto industry has been growing. The past decade has shown a six fold increase in production, fueled by both domestic and foreign demand. Today, the industry produces around 1 million cars each year.
Iran’s construction industry, currently valued at about $154 billion, is central to the country’s economy and promises steady growth. While the construction industry was in decline before international sanctions were lifted, it has made a quick turnaround: output value is expected to rise at a compound annual growth rate of 6.34% through 2020. Investment opportunities are also increasing as the country opens up to more international markets and new infrastructure is needed.
Iran has long had its share of environmental issues including air pollution, water management, and the effects of climate change. But in 2016, major developments in environmental policy in Iran helped boost the country’s “green” status. For instance, Iran passed the Clean Air Bill, imposing fines on excess air pollution, and became the 106th nation to ratify the Paris Agreement in early November 2016. Additionally, the Iranian Department of Environment endorsed several successful environmental campaigns such as “Car-Free Tuesday” and a plan to protect the Persian Leopard.
Iran may not be high on most Americans' lists of top tourist destinations, but the tourism industry there has been doing quite well. Home to a rich cultural and historical heritage, Iran contains architectural remnants that date back over 2000 years with 19 major archaeological sites having been named UNESCO World Heritage Sites. After implementation of the JCPOA, the number of tourists visiting in Iran rapidly increased, with Iran currently generating some $8 billion from tourism. The country expects that number to jump to $30 billion by 2025, with nearly 20 million tourists visiting annually and providing over 1.9 million Iranian jobs.
Over 60 percent of Iran’s approximately 80 million people are under the age of 30. Since this is the preferred demographic for marketing, it is no surprise that international and local brands alike are competing to reach untapped markets among the nation’s growing youth. Indeed, the advertising industry in Iran has already grown into a 600-million-dollar giant. Moreover, since Iran has the largest internet and smartphone penetration rate in the Middle East, “Advertising Technology” (AdTech) now plays a major role in modernizing marketing and advertising strategies in the previously economically isolated nation.
Iran fosters a thriving domestic tech scene that hosts multi-million dollar companies like Café Bazaar and Aparat and appears ripe for further growth after sanctions relief from the JCPOA. Around two-thirds of Iran’s population is under the age of 35, while 42% are under 24. In addition to a sizeable young, tech-savvy population, there are roughly 56 million Internet users in Iran, forming a substantial potential customer base for cutting-edge tech startups.
Prior to the implementation of international sanctions, over 57 private and public foreign bank branches operated outside of Iran, with that number declining until all were eventually closed. With sanctions lifted in January 2016, over 50 new branches are expected to open internationally. There are currently requests by several banks to open branches and resume business within Iran, though some have already begun to handle customers’ transactions within the nation.
“The government will never be a good manager in industry, including the car industry. The sector should be completely privatized and competitive. The partnership [with foreign carmakers] will drive us ahead.”
With these words, President Hassan Rouhani, in a nationally broadcast speech, invited foreign investment to participate in Iran’s auto industry. Following years of devastating sanctions on manufacturing, analysts believe Iran’s auto parts industry, the nation's secondlargest economic sector, is ripe for growth.
Iran’s hospitals are undergoing rapid development. In 2012, the Ministry of Health and Medical Evaluation initiated an evaluation system for hospitals in Iran to bolster the quality of services provided. And, in 2014, the Iranian government announced a new program to extend health insurance coverage to all Iranians, in the fashion of “Obamacare” in the United States. Under the new Tarh-e Salaamat health plan, the state pays for 90% of patients’ medical bills in hospitals. Thus, while Iranian hospitals do face challenges in structural support and resources, there are significant opportunities for growth in the country’s medical sector.
Following last year’s implementation of the nuclear deal, companies around the world have taken a serious interest in the Iranian telecommunications industry. The population of Iran, the second-largest in the Middle East, is mostly young – over 60% of Iranians are below the age of 30 – and, therefore, more likely to consume new technologies, cellular devices, and electronics. Thanks to deregulation, the introduction of 3G and 4G network services, and a robust start-up culture, Iran’s telecom industry offers a promising, and highly lucrative, new frontier for the global economy.