Consequences of ConflictCountries emerging from violent conflict face extraordinary constraints mobilizing the human and financial resources that are urgently needed, first for humanitarian relief and subsequently for economic recovery. Conflict almost always affects the rate of growth of a country’s economy as a result of the negative effects on it has on physical and human capital, markets, investment.Conflicts surrounding the Islamic Republic of Iran The Iran–Iraq War was an armed conflict between Iran and Iraq lasting from 22 September 1980, when Iraq invaded Iran, to 20 August 1988. The war followed a long history of border disputes, and was motivated by fears that the Iranian Revolution in 1979 would inspire insurgency among Iraq’s Shi’ite majority, as well as Iraq’s desire to replace Iran as the dominant Persian Gulf state.The total cost of the war from its beginning in 1980 until early 1987 was more than US$240 billion. Therefore, following the 1979 revolution, the Iranian economy was affected by a costly eight-year war, unremitting international isolation, and political conflict. Iran’s reliance on oil revenues further put the state at the mercy of energy market fluctuations.Economic policies established during the revolution were strengthened after Iraq’s 1980 invasion. However, the post conflict period observed increased urban poverty, dropped real per capita income, and failure of price controls, collapse in oil prices, and strict rationing of basic consumer goods in preventing rampant inflation. Meanwhile, the factional battles over the economy polarized the political environment and eroded what was left of the private sector.Recovery of the EconomyThe cease-fire facilitated a major shift in the Islamic Republic’s economic approach. We sought to rebuild a country battered by a decade of revolution and a war with approximately $1 trillion in direct and indirect costs. This agenda included:Infrastructure developmentPrivatization of state enterprisesForeign exchange liberalizationEstablishment of free-trade zonesAnd elimination of subsidies and price controls. Post-war investment and relaxation of government restrictions on trade helped generate robust growth in gross domestic product, government revenues and employment. This was followed by a solid beginning to serious economic restructuring. Many notable national milestones including the following were observed: Unifying the exchange rate Establishing an Oil Stabilization Fund as a cushion against market volatilityAuthorizing the first post-revolutionary private banksPushing through some improvements to the framework for foreign investmentStewarding the economy through a tumultuous period of unprecedented low oil revenuesAnd luring new interest and investment from the West.These changes have been followed by many more efficient economic policies over the years which have been contributing greatly to the national economy till date.International Solutions to Reconstructing Economies in War Torn CountriesIn war torn nations, policy must aim not just to rebuild what was destroyed by war or recreate the status quo from before the conflict; it must seek to break with the past. This means pursuing policies that lean towards more comprehensive growth and enhanced human development. The major drivers of post-conflict economic growth are capital intensive resource extractive industries, investment- and trade-enabling policies promoting an environment that fosters investment and trade, re-establishment of a credible and efficient monetary policy regime and rebuilding the domestic financial and banking sector.The Islamic Republic of Iran strongly believes that such an approach, with the help of the global community, will make economic recovery a self fulfilling prophecy in war torn nations.