A Comparative Study of the Impact of Foreign Policy on the Economic Development of Iran and Vietnam from 1990 to 2023

Over the past three decades, both Iran and Vietnam have faced similar economic challenges, such as sanctions, political difficulties, and international pressures. However, their responses to these challenges have involved adopting different foreign policies. While Iran has faced severe economic restrictions due to its confrontational policies toward the international order and the United States, Vietnam, by embracing policies aligned with the global order, has been able to capitalize on the benefits of globalization and emerge as one of the region's most successful economies. These differences raise important questions regarding the impact of foreign policy on economic development. Thus, this study seeks to answer the following question: What role has foreign policy played in the economic development of Iran and Vietnam from 1990 to 2023? The research hypothesis posits that foreign policy between 1990 and 2023 has hindered Iran's economic development while accelerating Vietnam's developmental trajectory. The findings of this study indicate that Iran's foreign policy, particularly in the post-revolutionary era and in response to economic sanctions and diplomatic pressures, has had a negative impact on the country's economic development. In contrast, Vietnam, by adopting policies aligned with the international order, has been able to expand its trade relations and effectively leverage the opportunities of globalization, leading to higher economic growth rates. This research employs a causal-comparative analysis method and utilizes a mixed-methods approach to examine the relationships between variables, applying neoliberal theory to investigate the subject.





































Introduction





































Over the past three decades, Iran and Vietnam have faced similar economic and political challenges, including sanctions, war, and international pressures. However, the two countries have pursued markedly different foreign policy paths. Iran, particularly after the Islamic Revolution, adopted an ideological-security approach to foreign policy, positioning itself in opposition to the global order. In contrast, Vietnam, following the end of its war with the United States, embraced economic reforms and an engagement-oriented policy, charting its economic development path within the framework of globalization. This raises a fundamental question: What role has foreign policy played in the economic development of Iran and Vietnam from 1990 to 2023? The study’s central hypothesis posits that, during this period, Iran’s foreign policy—particularly in the face of sanctions—acted as a constraining factor on economic development, whereas Vietnam’s foreign policy facilitated and accelerated its economic growth.

Theoretical Framework

This study employs the theory of neoliberalism in international relations to analyze the role of foreign policy in economic development. Within this framework, interaction, economic cooperation, free trade, the role of international institutions, and interdependence among nations are considered instrumental in achieving economic growth and reducing international tensions. Unlike realist approaches, neoliberalism emphasizes state interactions through supranational institutions and soft power. Specifically, in foreign policy, this theory prioritizes economic diplomacy, foreign direct investment, and integration into the mechanisms of the global order. This analytical framework helps explain Vietnam’s developmental trajectory as well as Iran’s structural challenges.

Methodology

This study adopts a qualitative-comparative methodology with a causal-comparative approach. Data were collected through document analysis, policy papers, and official domestic and international statistics, with a focus on examining historical and structural trends in the foreign policy and economic development of both countries. The research also draws on reliable sources such as the World Bank and the International Monetary Fund, as well as reputable domestic and international academic references. By comparing the foreign policies of both countries during the same period (1990–2023), the study establishes a framework for causal analysis of their performance differences.

Results and Discussion

The research findings demonstrate that Vietnam's foreign policy, particularly following the economic reforms of “Đổi Mới” in the 1980s and continuing from 1990 onward, has been explicitly oriented toward economic development. By joining ASEAN, the World Trade Organization, and various free trade agreements, as well as attracting foreign direct investment, Vietnam transformed over three decades from a poor agricultural economy into one of Asia's emerging economies. In contrast, Iran, despite post-war reconstruction efforts and attempts at economic engagement after the Iran–Iraq War, faced significant obstacles due to the confrontational nature of its foreign policy, particularly regarding nuclear and regional policies. This approach resulted in extensive sanctions and economic restrictions, creating a major impediment to the country's economic development.

Conclusions and Suggestions

The comparison of the two countries’ foreign policies demonstrates that Vietnam’s interactive and globally aligned approach facilitated its integration into globalization and fostered economic growth. In contrast, Iran’s foreign policy, centered on ideology and resistance to the international order, led to diminished economic opportunities, restricted banking and trade relations, and ultimately hindered economic development. Despite some domestic achievements, such as advancements in the petrochemical and nuclear industries, the negative impact of sanctions, unstable foreign relations, and limited participation in international institutions has acted as a barrier to Iran’s economic progress. This study emphasizes that a shift in Iran’s foreign policy toward economic diplomacy and multilateral cooperation is essential for achieving future developmental goals. Ultimately, while domestic conditions, political history, and governance structures differ between the two nations, foreign policy plays a decisive role in either advancing or undermining economic development.
Ethical Considerations
Not applicable
Funding
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Conflict of interest
The authors declare no conflict of interest