Iran outpaces Saudi Arabia in industrial might
By Farshid Farzanegan
Former head of
Iran-UAE Joint Chamber of Commerce
When President Trump recently claimed in Saudi Arabia that the kingdom had outpaced Iran in industry and technology, he was only painting part of the picture.
Iran is certainly ahead of Saudi Arabia scientifically and ranks among the world’s top 20 countries for scientific publications. Moreover, Iran has chalked up genuine, homegrown achievements in advanced fields like nanotechnology, biotechnology, and even space technology. On top of that, Iran’s local workforce stands out as one of the most skilled in the region.
Still, Saudi Arabia has indeed picked up speed in industrial development in recent years, largely thanks to massive foreign investment pouring in through mega-projects. The kingdom has also set out to reduce its dependency on oil. When it comes to bringing in foreign technology, developing free zones, digitizing government services, and rolling out infrastructure, Saudi Arabia has pulled ahead of Iran. Its performance in non-oil exports and industrial diversification is also markedly better.
In a nutshell, Iran is more industrialized than Saudi Arabia, but Saudi Arabia is more modern and stable from a management perspective. Nevertheless, Trump, for his part, has always talked up Saudi Arabia only as a reliable buyer, especially given its hefty purchases of US arms and infrastructure.
Turning tide for Iran won’t be easy
To turn things around, there’s a clear roadmap: boost stability in industrial and technological policymaking, ensure consistency in macro-level decisions, hang on to top talent, and step up engagement with reputable global firms, universities, and research centers.
Yet, with Iran’s international investment ranking in the doldrums and capital security under threat, the country still struggles to draw in and hold onto foreign investment. The economic climate remains shaky, making any turnaround an uphill battle.
On the technology front, Iran must build up an innovation ecosystem that welcomes transparent foreign investment. International companies and institutions need to see that Iran’s political ties with the world are warming up before they take a closer look. He insists that scientific and technological diplomacy — not political confrontation — should be put on the agenda.
Sanctions profiteers deal blow to Iran’s progress
US sanctions have definitely played a pivotal role in why Iran has fallen behind Saudi Arabia in industry and technology. However, I also like to call out unqualified managers, entrenched “sanctions profiteers” who cash in on the current situation, and influential stakeholders who throw their weight around in policymaking. Add to that the policy instability, brain drain, corruption, and managerial incompetence from which Iran is suffering, and it’s clear why Iran is lagging behind in the industrial and technological race.
To make up for lost ground, I prescribe economic reforms, smoother international engagement, reduced political tensions, improved diplomatic relations, support for top talent and the real private sector, and economic diversification.
Iran must patch up its relationship with the world. If that happens, the country has the talent and capacity to get back into the global economic game at full speed.
The article first appeared in
Persian on ILNA.