The world is watching these days how Iran is subjected to the aggression of the United States and Israel. At the same time, the picture is Iran’s resistance to a tandem of countries vastly superior in resources, one of which is a nuclear superpower.

However, the subject of my attention here is not the political aspect of this war or the military-political, geopolitical layers. The basis of Iran’s resistance is not only the will of the Iranian people and the elite, but the potential of the Iranian economy. An economy that has been under severe international sanctions for more than 40 years, but which during those years has been endowed with the industrial potential to withstand a nuclear superpower and strike back, has the potential for long-term resistance.

All this is due to Iran’s industrial capacity, because it is the industry that has ensured the availability of such a volume of military products that ensures resistance. Being under severe sanctions for decades, Iran has managed to build such an economy, such an industrial system, which has allowed it to have tangible self-sufficiency.

Moreover, this is not only the issue of the military industry. In order to have a military industry, to develop a military-industrial complex, one must first have a viable industrial complex and traditions in general. Moreover, one can imagine how much more the Iranian economy could have been if there was a more favorable and wider environment for attracting foreign investments, if there were no sanctions.

This example is essentially not identical to Armenia in its scale, but in terms of challenges, it is quite comparable. After all, Armenia is also dealing with a security environment, a set of challenges arising from that environment, which exceed Armenia’s potential several times. Therefore, an industrialized economy that will ensure self-sufficiency as much as possible is imperative for Armenia.

And Armenia, unlike Iran, has a more open environment for attracting investments, it is not under sanctions. Moreover, Armenia itself benefits from the fact that, for example, Russia is under sanctions. But Armenia benefits from it only through the logic of “speculation”, not productivity, creating value, developing industrial potential. That is why the volume of trade and services is increasing in Armenia, and foreign investments are decreasing, which would be aimed at the prospects of creating industrial and production value in Armenia, adding “heavy weight” to the economy.

Because in the conditions of complex and disproportionate security challenges, it is not tourism, for example, but the heavy industrialized economy that makes the state resilient. Not only would Iran today not be able to withstand the challenges thrown at it, if instead of giving a boost to the types of industry, for example, it thought of just giving a boost to tourism and services, it would also suffer enormous losses, as the first instability would hit those sectors.

This does not mean at all that these sectors should not be developed in the country. All sectors must develop. But, when we talk about the existential, ontological strength of the state, there is no doubt that its basis can only be the “weighted economy” with a rich sectoral backbone of various “shades” of industry.

Moreover, the example of an industrial, heavy economy is not about producing tanks and missiles, but simply about developing industrial, production potential. Because the resilience of the state is a complex phenomenon, it is not measured only by tanks and missiles. Industrial potential is investment in value-creating economic processes. In that sense, Armenia has especially recently failed to work with investors, which is evidenced by the lack of investments.

Those failures are covered with cult-like conversations and festival “exotics” of the service sector. And in order to be a viable and competitive state, these sectors can be an important coupling of the economy, but never a locomotive.

Hakob Badalyan

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