What international sanctions against Iran were not able to achieve might come about through a funding crisis.
The oil boom helped the Iranian government to bolster its popularity with cash handouts. Partly because of this, imports ballooned to almost $50 billion during the past Iranian year. Imports rose 20% during the first quarter of the present Iranian year (which began on March 21) compared with the same quarter the previous year, according to the latest central bank figures.
Conventional economics would say this growth in imports has made Iran’s home industry less competitive, creating an advanced form of Dutch Disease dependency.
With a presidential election due in summer 2009, the oil boom might have ended too soon for President Mahmoud Ahmadinejad. Iranian oil revenue might...
