The Risk Factors Of Iran

Iran, initially known as Persia before 1935, was ruled a monarchy by Shah Mohammad Reza Pahlavi until he was overthrown in 1979 by the conservative Muslim movement in the country at the time. A theocratic system was established by the Islamic clerics, in which final government authority rested in the Supreme Leader. During this time, relations between Iran and the United States were strained when Iranian students seized the United States embassy in Tehran. Iran also has had conflict with Iraq between 1980 thru 1988, which later led to United States involvement in the Persian Gulf. Iran has also been linked to various Islamic terrorists groups in the region due terrorist activities being conducted in Lebanon and other parts of the world. Iran has also been the target of sanctions from the UN due to its nuclear weapons ambitions in the region. Since 1997, Iran’s government has been under constant change be reformists parties candidates, most notably by President Mahmoud Ahmadinejad who was elected in a controversial election in 2005. (CIA)

Compare and contrast macro political risk with micro political risk. Discuss policies to combat their impacts on international business activities.

The current, existing institutions set up in Iran would qualify this country as both consensual and majoritarian. The Iranian executive branch is composed of a Supreme Leader elected by the Assembly of Experts, a president and vice president, oversight bodies and a cabinet (World Fact Book). The Supreme leader is appointed for life by the Assembly Experts, not through the people. Iran also has a weak, unicameral Islamic legislative branch. It is also important to note that Iran does not put a lot of its attention toward formalized political parties and interest groups. Iran is a mixture of consensual and majoritarian government, but recent events and other governmental acts prove otherwise. While most aspects in its written Constitution label Iran as consensual, the government does not always act that way. With nearly seventy-seven million people in the country with ethnic groups including Persian, Azeri, Kurd, Lur, Baloch, Arab, Turkmen and Turkic tribes, and others, Iran should make the educated decision to move towards a more consensual government to better represent their people and include minority representation (Iran). To make this transformation, the Iranian government should make changes dealing with the election system, executive power sharing, balance of power, political parties and federalism.

Over the last few decades, there has been increasing tensions between the United States and the Islamic Republic of Iran. This could be the cause of many external as well as internal factors. Diplomacy between these two states were not always successful and as such there would often times be misunderstandings. These misunderstandings have led to a strained relationship and a lack of cooperation among key actors of these nations.

The constitution was modeled on the 1958 constitution of the French Fifth Republic, retaining the President and Prime Minister for the Executive branch, instantly creating tension between the two. “Tension… never abated. In fact, it was one of the reasons for the amendment of the Constitution and abolition of the office of the Prime Minister in 1989”. This abolition however created another problem: tension between the President, and the clerically selected leader (rahbar) of the Islamic Republic, also known as the supreme Jurist (faqih). This 1989 amendment also realized the Expediency Council (majma’-e tashkis-e maslahat) as an advisory board for the leader. The Expediency Council’s role had been set up to break the deadlock between the Iranian Parliament (Majles), and the Council of Guardians, whose clerical Assembly of Guardians who had veto power on all of legislation.

As the latest wave of revolutionary uncertainty sweeps across the Middle East, Iran remains one of the region’s biggest question marks. The Islamic regime that temporarily crushed the Green Movement after Iran’s controversial presidential elections of 2009 still faces serious internal challenges to its power, with no clear indication of how events will play out.

The population of Iran is 80,840,713 people and rated the 19th largest populated country in the world. It contains diverse ethnic groups such as 61% Persian, 16% Azerbaijan, 10% Kurds, 6% Lurs, 2% Arabs, 2% Turkmen and Turkic, 2% Balochs, and 1% of all the rest of the population. Its main religion is Muslim with 99% of the population practicing this religion. Islamic people may openly practice their religion. Followers of the Bahaii religion prosecuted because Iran believes in only one religion, Shia Islam. In everything and every issue the religious men have the opinion and make the final decision, rule Iran.

With increasing tension in Iran came the inevitable revolution. There was also a financial crisis, and Iranians were becoming desperate for economic and social relief. In January of 1979, an Islamic revolution began, with the overthrow of Reza Shah Pahlavi and the monarchy and an installation of an Islamic republic, led by Ayatollah Ruhollah Khomeini. (Axworthy 32) This clearly put the relationship between Iran and the West in a very bad circumstance, because not only did all Western countries like the Shah, but also because they viewed the Islamic regime and its following of Shari’ah law to be backwards in the modern times. In addition to this, Iran disregarded previous nuclear proliferation deals, and began to grow its nuclear program; this made the West nervous for any rash actions made by the new Islamic republic.

One of the most important external threats is the political and legal threat. Political and legal threats could be local or international. A business can be affected by any political or legal changes in any country that it has a relation with. As a result, businesses should acquire political skills and be able to analyses and predict changes and respond accordingly. Political skills empower businesses and may improve their performance and provide them with an advantage in the market. “Companies are beginning to recognize the impact of political issues upon international ventures”. Weiner (1992).

Irritation rate in Iran involves concern and around then a little piece has been changed into the nation's cash related issues. Regardless of the uncommon battle, the development rate in Iran is remaining between this time. The mechanical age has been moved forward. This is a challenging time for investors, because of the sharp decline in global interest rates, decrease in global equity markets, reduced in commodity prices and volatility concerns.

Iran is one of the main actors in the Middle East region which is also at the same time very highly volatile through the chaos of the Arab Spring, precarious countries like Afghanistan, Syria, and Iraq, the Palestinian-Israeli conflict, and the upsurge of the Islamic State. Also to the displeasure of the US and other Western allies, the Iranian regime backs the radical groups of Hezbollah and Hamas. Iran’s resolve to change status quo in the Middle East in undermining ways makes them a consideration to vital security for the U.S. and its allies. Notwithstanding a short-term merging of U.S. and Iranian benefits against the risk posed by the Islamic State, Iran’s long-term motivations on course that counters the interests of the U.S. and its

With the Islamic Sunnis-Shiite divide and attempts by democratic advocates who actively try to challenge dictators, the region has fallen into a state of conflict. While, the United States might want to focus on Asia, it will most always have its concerns about Iran, where oil, its nuclear program, and most likely outcome to draw a nuclear arms race is one that the world is keeping an eye on. The Iran Deal signed by the former President Obama, has the intention of lifting sanctions with the goal to keep Iran from producing nuclear weapons. With regards to the nuclear issue, the Qatari’s close relationship with the Iranians is beginning to add fuel to the gulf issue as a resolution is not that easy to broker.

Iran is a country with a rich history that stretches back to the formation of the Persian Empire in 550 BC. It is important to discuss the history of Iran when viewing its current state of politics because over this vast period of time there was a distinct set of rule that had just ended less than forty years ago. From 550 BC to 1979, Iran (formerly known as Persia, changed names in 1935) had been ruled by emperors, kings and shahs (Persian for ‘king of kings’), until the Iranian Revolution of 1979 when the last shah, Mohammad-Reza Pahlavi, was overthrown. An important event that occurred under the leadership of shahs, occurred in 1501 under the leadership of the Safavid dynasty, when Iran adopted Shia Islam as their official religion. This event was important in many ways as it shaped the current political landscape of Iran and has been an increasingly debated topic in comparative politics.

Emerging markets are often sought by investors due to their potential of returns higher than the more stable advanced economies. The markets often experience rapid economic growth as measured by gross domestic product. As in most situations, high returns often accompanied with high risk. The root of the higher risk in emerging economies often correlate with issues such as political instability, voids within the domestic

The research continues to broadly discuss Iran’s Foreign policy through the following heading which is Iran’s foreign policy principles, Iran’s first revolution, the second revolution, approaches of the Islamic Revolution, Iran’s foreign policy in the light of the Arab revolts and lastly Iran’s foreign policy towards United States. It concludes that despite the fact that Iran has been playing a major role, it has only accomplished mixed results at best. The following two keys have been limiting Iran’s foreign policy which is because of its contradictory strategies that substantially contributed. Firstly Iraq’s bitterness towards Tehran’s interference and