Iran International
Iranian President Masoud Pezeshkian reiterated his campaign pledge this week to invite foreign experts to help address the country’s economic crisis, as his administration struggles with soaring inflation, severe shortages, and a collapsing currency.
Justifying his statement, Pezeshkian said, "With the leadership of Khamenei and the economic potential of our country, Iran does not deserve to lag behind its neighboring countries."
However, Iran has a bitter history of inviting foreign experts and economists to solve Iran's problems since the early 1910s.
Five years after Iran's 1905 Constitutional Revolution, the country's first parliament, determined to establish a Western-oriented democratic civil society in what was then known internationally as Persia, persuaded Mohammad Ali Shah—a ruler heavily influenced by Russia—to invite an economic adviser from the United States. Unlike Russia and Great Britain, the US had no political ambitions in Iran and showed no interest in exploiting its resources.
The 1905 revolutionaries had forced the Qajar Dynasty monarch Mozaffar ad-Din Shah to agree to the election of a parliament (Majles) and the opening up of a relatively free press as well as bringing about other reforms. But the king died within a few months and was replaced by Mohammad Ali Shah.
At the time, the United States was so uninvolved in regional ambitions that it initially declined Iran's request. However, under persistent pressure from the Iranians, the US government recommended William Morgan Shuster—a lawyer, civil servant, and publisher—who was ultimately appointed by the Iranian parliament as the Treasurer-General of Persia. Shuster served in this role from May to December 1911.
Shuster made every effort to stabilize Iran's chaotic and fragile economy, which had been severely impacted by the Qajar Shahs' debts to Imperial Russia and Great Britain. These two powers had effectively divided Iran into spheres of influence under the 1907 Anglo-Russian Convention. However, Shuster’s reforms, which sought to restore financial independence, challenged the authority of both Russia and Britain. In response, their agents in Iran created obstacles for him, and Russian forces subsequently occupied parts of northern Iran. They later accused Shuster of deploying Iranian gendarmes to collect taxes from people within the Russian-occupied territories.
Under mounting pressure from Russia and Britain, Shuster was ultimately forced to resign. He returned to the United States, where he wrote The Strangling of Persia, a book detailing the extensive influence and interference of Britain and Russia in Iran.
The Iranian government also appointed US-educated British lawyer and economist Arthur Millspaugh as its financial adviser, first from 1922 to 1927 and again from 1942 to 1945, to reform the country’s financial system. While his first tenure was relatively successful, his second was deemed a complete failure. The Iranian government attributed this failure to Millspaugh's "arrogance," though many observers pointed to factional infighting, political instability, and obstruction by opposition groups as key factors.
The factors mentioned—factional disputes, economic and political instability, obstructions by political rivals, and a deep-rooted xenophobia exacerbated under the Islamic Republic’s anti-West ideology—persist in modern Iran. Although 80 percent of the economy is controlled by the state or entities affiliated with the Islamic Republic’s establishment, factions thrive among these privileged groups ranging from clerics to the IRGC and influential families. Reforming the economy is hard to imagine in this non-competitive, non-transparent system.
Starting in the 1950s and continuing until the 1979 revolution, American and other international experts, advisors, and engineering specialists flocked to Iran to support the ambitious economic and industrial development spearheaded by Mohammad Reza Shah Pahlavi. By the 1970s, Iran was emerging as a regional industrial power and a major oil exporter.
In the unlikely event that Pezeshkian secures approval to hire international advisers, the challenges inherent in the Islamic Republic's economic and political system are likely to hinder their work.
