With international sanctions on Iran being lifted, and with the country boasting one of the most advanced and diversified economies in the MENA region, how likely is it that Iran will become the next Middle Eastern superpower by 2025?
The Iranian nuclear deal struck at Vienna last year will undoubtedly lead to a tectonic shift in the Middle Eastern balance of power, allowing Iran to confidently reenter the international fray. Discussions concerning the emergence of a reenergized Iran persist, with the Saudis in particular fearing an Iranian domination of the Middle Eastern landscape for the foreseeable future. Unshackled economically, Iran is more than likely on course to become a regional economic superpower.
Geopolitically, Iran’s regional hegemonic pretensions within the next decade will inevitably centre upon the trajectory of its ever-intensifying geopolitical battle with its enduring Sunni rival, Saudi Arabia. Often mistaken for a sectarian conflict, Iran’s Saudi obsession is an inextricable fight for regional predominance and the subsequent prize of regional leadership. Thus, understanding Iran’s Middle Eastern role over the next decade cannot be disentangled from its relationship with Riyadh.
At the same time, however, while both sides will enjoy periods of incremental advantages, there will be no clear victor. The pseudo-sectarian, geopolitical rivalry will continue to simmer and dominate the regional landscape well past 2025.
Economic superpower status a matter of time
Iran’s is likely to become a regional economic powerhouse over the next 10 years, with growth rates of around 3.5% this expected this year as sanctions begin to loosen. This would place Iran as the second fastest growing of the MENA economies. According to the IMF, since 2011, sanctions have wiped off between 15-20% from Iranian GDP.
In addition to this, the nuclear deal will also unfreeze around $100 billion of Iran’s overseas assets (estimates range from anywhere between $50 billion and $150 billion). This infusion of liquidity into the Iranian economy, coupled with the fact that Iran is already MENA’s most diversified economy, provide the ingredients for Iranian economic superpower status by 2025.
Additionally, Iran will also be able to add a further 1.5 million barrels of oil per day to the world markets. While it will not be able to match Saudi Arabia’s overall oil output, Tehran does hold a distinct advantage over its rival by virtue of the fact that the House of Saud despite, recent efforts to diversify, remains a one-trick pony heavily reliant on petrodollars to prop up its economy.
Buffeted by international sanctions, Iran remains rich in natural resources. The removal of sanctions may also see the return of the estimated 300,000 Iranians forced to look for work abroad. Iran will also continue to make strides in its historically strong fields, mathematics and science, where it will look to become a world leader once again.
Iran’s economic future appears bright, with circumstances conducive to regional superpower status by 2025.
Iran’s geopolitical standing
Though Saudi Arabia fears a normalization of the US-Iranian relationship, Washington remains cautious – if not loath – to the idea of taking sides in the Middle East’s current power play.
A clear victor is thus unlikely to materialize, and both Iran and Saudi Arabia will continue to look for incremental advantages in their relative positions across the region through various proxy clashes in Syria, Yemen, Bahrain and elsewhere. The Saudi-Iranian conflict will continue to dominate the regional landscape.
This month’s Iranian parliamentary elections will do little to alter Iranian foreign policy. Though the election was hailed as a victory for reformists, Iranian domestic and foreign policies do not necessarily align and very little will change vis-à-vis Iran’s external relations. Saudi Arabia will remain Iran’s public enemy.
Vali Nasr, one of the world’s preeminent scholars on Shia Islam, argues that Saudi Arabia and Iran will continue to tussle for power. Both states ‘crave influence’, he says, and the collapse of the Arab world has intensified this battle for predominance.
Moreover, as the winds of change sweep through the region, the Saudis’ insecurities have heightened, with the Saudi’s fearful of American move towards the Iranians in the form of the nuclear agreement.
Riyadh sees the deal as Iran returning to the region, which in turn will see an Iran that is very difficult to contain. Saudi Arabia has also lost its position as America’s premier ally in the region. All of these factors explain why the Saudis continue to use the sectarian card, in order to create Sunni hostility against rising Iranian influence. This is a tactic by which the Saudis are hoping to block rising Iranian influence.
Against the background of this deepening regional battle, Iran will surely be unable to attain regional hegemony within the next 10 years.
Though cracks are appearing in the US-Saudi relationship- as the Saudis’ ‘financing’ of international terrorism continues apace- the relationship remains pivotal to US national interests. The relationship still holds great importance for policymakers in Washington. And both Washington and Riyadh remaining intent on hemming in any sinister Iranian intentions. Geopolitically, Iran will remain strategically constrained in the next decade.
Iran in 2025: An economic, not geopolitical, regional power
Iran has obvious potential to dominate the MENA region economically as its economy heats up post-sanctions. Its well-diversified economy will enjoy the benefits of a return to international trade, aiding it in its quest for regional dominance.
Whether this provokes an evolution in Iran’s external predilections is open to question. With the electoral vetting process making it difficult for reformists to truly play a large role in politics, power arguably remains concentrated in the hands of hardliners, intent on propagating anti-Western, anti-Israeli propaganda. Such a stance will do nothing to evolve Iran’s position within the global order.
The Saudi dimension, likewise, will also continue to dominate Iranian strategic thinking, percolating through in almost all of future foreign policy.
Will Iran be a regional powerhouse by 2025? Economically, yes. Geopolitically, it is harder to make a confident prediction. More likely than not, the Saudis, despite their waning influence, will be able to block Iran from becoming the outright leader in the Middle East by 2025.
