Iran’s economic strategy in confronting sanctions

From the time of its formation until today, the Islamic Republic of Iran has always been subject to harsh economic sanctions by the arrogant powers. The present article examines Iran’s strategy – i.e. an economy of resistance – to confront and nullify the effect of sanctions.

According to statements made by American officials, the sanctions imposed on Iran have been extensive and unprecedented to such a point that few countries in the history of modern humanity have suffered such a large amount of sanctions in oil, banking, arms, transportation and even medical supplies during the Coronavirus pandemic! In her book Hard Choices, Hillary Clinton reflects on the sanctions imposed on Iran by the US, “We would go after Iran’s oil industry, banks, and weapons programs. And we would enlist insurance companies, shipping lines, energy traders, financial institutions, and many other actors to cut Iran off from global commerce. Most of all, I would make it my mission to convince the top consumers of Iran’s oil to diversify their supplies and buy less from Tehran.” She concludes, “We did everything we could to make it harder for Iran to do business.”[1]

Most probably, the first question that comes to mind is, “Why?” Why has the US been trying so hard to impose sanctions and pressure Iran since its establishment in 1979? Although the answer to this question is complex and multi-dimensional, perhaps we can provide a brief answer by drawing on William Blum’s analysis of the United States’ foreign policy, and attend to a more important question instead. In his book America’s Deadliest Export: Democracy,  he states that the US will basically and undoubtedly behave in a hostile manner towards every country that presents a model different from the economic-cultural model of capitalism.[2] Therefore, that why the US makes such explicit and implicit statements and adopts antagonistic measures to weaken Iran is perhaps clear and requires no further explanation.

On the other side, the other question that makes one truly curious regarding the 40-year program of wholehearted sanctions against Iran is, “How has Iran managed to thrive in the face of the above mentioned pressures, and what has been its strategy in confronting and overcoming these economic pressures? Iran, under the leadership of Imam Khamenei, strives to prevail over this wholesale economic attack by resorting to an economic model known as “the economy of resistance.”

Before describing the model of an economy of resistance, it is useful to briefly examine the theoretical basis behind Iran’s economy which is based on its Constitution and other top national documents. The Constitution speaks about a fair economy based on Islamic principles (Article 3, clause 12), meeting people’s fundamental needs such as housing, food, clothing, health, medical treatment, education and basic facilities and amenities for starting a family (Article 43), and advocating ownership in the governmental, cooperative and private sectors (Article 44) and in particular private ownership if it is done through legitimate means (Article 47). These are economic factors specified in Iran’s Constitution. The Islamic Republic’s “Strategic Plan” is another top national document that has played a major role in shaping the economic system of the country. In the Strategic Plan, the emphasis has been placed on social justice, legitimate freedom, the importance of human resources, public investment in national production and entrepreneurship, the avoidance of consumerism, the establishment of a social welfare system, the development of a spirit of cooperation, and public assistance.

By bringing up the issue of an economy of resistance and by announcing its policies, Imam Khamenei, the Supreme Leader of the Islamic Revolution, on the one hand, has tried to strengthen, develop and organize the economy on the basis of Islamic principles – according to what has been stated above, these principles were specified to some extent in the top national documents - and on the other, he has tried to present a strategic plan for helping Iran to overcome economic pressures and move towards economic independence and dynamism. It is worth mentioning that in Imam Khamenei’s opinion, although the model of an economy of resistance is an efficient model during the time of sanctions and economic pressures, we should not consider it to be a short-term and transient model for guaranteeing the economic life of a country while sanctions are in place.[3]

From the viewpoint of Imam Khamenei, there are four reasons why Iran needs to move towards an economy of resistance, in particular considering the present conditions: first, the existence of much potential; second, the existence of obstacles in the economic system; third, foreign sanctions; and fourth, the global economic crises.[4] The Supreme Leader of the Islamic Revolution announced the general policies of a resistance economy in 2013.[5] Its main components may be summarized in as follows:

  1. Bringing about movement and dynamism in the economy of the country and improving major economic indexes
  2. Engendering the ability to resist against threats
  3. Relying on domestic capacities
  4. Having a Jihadi spirit[6]
  5. Basing economic activities on the people
  6. Ensuring the safety of major and fundamental goods and products
  7. Reducing dependence on oil revenues
  8. Correcting norms of consumption
  9. Combating corruption
  10. Having a science-based outlook

From the viewpoint of Imam Khamenei, an economy of resistance has an ultimate goal. In his eyes, the ultimate goal of the economy of resistance is to build the economy from within. In expanding on this fundamental goal of an economy of resistance, he cites verse 60 of   Surah al-Anfal in the Qur’an where God states, “And prepare against them what force you can and horses...” He explains that this reference in the Qur’an to power, strength and development is not confined to military areas and that the Holy Qur’an means all areas, “It means that we should strengthen ourselves in scientific and technological areas. It means that we should strengthen ourselves “in terms of science, technology, domestic production, influence on foreign markets, and discovery of the numerous capacities which exist in the country and which are untapped. These capacities should be utilized to strengthen the economy of the country from the inside. This is the same as the economy of resistance.”[7]

The economy of resistance is centered on the people means that the foundation for the participation of all people who are active in economic fields including business owners, investors, innovators and entrepreneurs be prepared by way of practical, comprehensible and trustworthy models in areas such as investment, management and ownership in various kinds of economic activities. The purpose should be increasing production and social justice along with reducing the financial and managerial role of the government in the management of economic activities. Under such circumstances, the government’s role is to formulate policies, to prepare the ground for economic activities and to supervise.

Imam Khamenei’s viewpoint about the economy of resistance is sometimes mistaken with other economic concepts. For example, due to some similarities one might think that an “economy of resistance” and an “economics of austerity” are the same thing. However, these two economic systems are not equivalent. An economics of austerity is a kind of strategic policy that has been adopted by certain countries such as Greece in order to reduce pressure on the economy. Its main element involves decreasing public costs and costs for welfare in order to reduce the government’s expenses. The adoption of this policy by certain European countries was followed by people’s complaints because it is the people in such countries who have to shoulder the main pressure of reducing costs. However, Imam Khamenei stresses that the goal of an economy of resistance is not to exert pressure on the people. On the contrary, if an economy of resistance is implemented, “The people will have better conditions and the problems of underprivileged classes will be solved. People can have a comfortable and prosperous life in a country where inflation is at an acceptable level and where employment is at a high level.”[8]

There is another wrong interpretation of the economy of resistance. Some people have the idea that an economy of resistance means a “closed economy” or an “introverted economy.” It is worth noting that the emphasis on highlighting domestic capacities as one of the main constituents of the economy of resistance should never be interpreted to mean ignoring the issue of interacting with the world and with the global economy. In an endeavor to explain the concept of domestic development versus economic isolation, Imam Khamenei has states, “The economy of resistance grows from the inside. What does this mean? It means that it originates from the capacities of our own country and our own people. The growth of this seed and this tree is reliant on the resources of our own country... But at the same it, it is not introverted. That is to say, the economy of resistance does not mean that we should build a wall around our economy and that we should confine it to domestic areas. This is not what we mean by the economy of resistance. It grows from the inside, but it is extroverted. It interacts with global economies and it has powerful relations with the economies of other countries.”[9] 

An economy of resistance and a surge in production

The Supreme Leader of the Islamic Revolution named this year in Iran “The Year of a Surge in Production.” Although a surge in production might seem to be a challenging goal considering the present economic situation in the world, it might not be such a difficult task for a country that has many untapped capacities in various areas including in the areas of investment, human resources, raw materials, energy, infrastructures, science and geography. Now, we should see if Iran equipped with an economy of resistance will be able to play a significant role in determining the economic equations in the region and even the world.


[1] Clinton, H. R. (2015). Hard Choices. Simon & Schuster.

[2] Blum, W. (2013) America's Deadliest Export Democracy: The Truth about US Foreign Policy and Everything Else. Best Red.




[6] Literally, the Qur’anic term jihad means “striving”. Although widely used in the Islamic context, the term jihad and its derivatives have one point in common, and that is they all refer to those efforts aimed at bringing personal and social life into conformity with the Divine principles. An important significance of this term while used in the economics in the eyes of Ayatollah Khamenei is an untiring, industrious, and moral spirit that moves the economic system towards justice, prosperity and welfare of human beings. 






  • economy of resistance
  • Iran
  • Iran economy
  • World Economy


  • 2020-07-14 11:52
    Live long Islamic republic of Iran under leadership of Wali-e-amr-e-Muslimeen Syed Khamnai.