Iran has spent decades building ‘missile cities’ but when will it invest in its people?

In managing protracted conflicts, pressure does not always succeed where war itself has failed, nor can political settlements alone guarantee a change in behaviour shaped over decades. For this reason, states sometimes resort to instruments more complex than conventional deterrence, designed not merely to raise costs, but to redefine interests themselves. Once stability becomes a source of gains too valuable to forgo, development ceases to be purely an economic objective and becomes part of the security equation, while interests themselves evolve into mechanisms that constrain choices. In this context, discussions of a $300 billion international investment and reconstruction fund within the framework of the recent US-Iran agreement carry significance far beyond its financial magnitude. The issue is not simply about capital that may be injected into the Iranian economy, but about testing a different hypothesis in dealing with Tehran: that preserving stability may become more rewarding than escalation, and that development itself may become a restraint on adventurism. Capital, in this sense, is not a precursor to trust, but rather a test of it. For years, Iran has lived under sanctions, yet the regime has repeatedly managed to shift the economic burden on to society, even as centres of power continued to consolidate instruments of influence. Accordingly, the $300 billion should be understood as a conditional investment framework targeting sectors such as energy and logistics, with each area of investment tied directly to behaviour. Every step towards compliance unlocks tangible benefits, while every return to escalation risks the loss of strategic gains. In this sense, development is no longer a reward granted after behavioural change; rather, it becomes an instrument for driving that change. The significance of this test lies in the fragility of Iran’s domestic landscape. Iran is not a resource-poor country; it possesses oil, gas, a substantial market and a strategically significant geographic position. Its core problem, however, is its growing inability to convert these assets into social stability. When projections indicate inflation rising from 32.5 per cent in 2024 to about 68.9 per cent by this year, the figures cease to be abstract statistics. They translate into bread, medicine, housing and steadily eroding income, and into a society with a diminishing capacity to endure the rhetoric of resilience. This fragility is also reflected in the value of the currency itself. When amid reports of an imminent understanding, the US dollar falls from about 182,000 tomans to 175,000, the market is effectively pricing the probabilities of war and peace. News of de-escalation offers the currency a brief reprieve, while news of renewed escalation drives it downwards once again. This suggests that the Iranian economy is no longer driven primarily by production indicators, but increasingly by the risks surrounding strategic corridors and the looming danger of confrontation. The paradox is evident in the fact that Iran, having built “missile cities” beneath the ground, has not achieved the same success in building “economic cities” above it. The former gives the regime a capacity for resistance; the latter gives society a reason for hope. The former addresses the outside world, while the latter serves the citizen. As the gap between the two widens, the question of priorities becomes increasingly difficult to ignore: is it enough for a state to be capable of responding to threats if it is less capable of creating opportunities and protecting incomes? It is from this paradox that the value of potential investments emerges. Such investments do not merely create interests and employment opportunities, they also create segments of society that benefit from stability. This is the very principle embodied in the UAE’s development model , where development has become a source of economic and social capital that links stability to opportunity and makes its preservation a shared societal interest. The transfer of this logic to Iran could alter the calculus of escalation. If projects begin to take shape on the ground, a return to escalation would no longer be solely a security decision; it would also be a decision with social consequences. Citizens would then begin to ask: why were these opportunities lost? Why has isolation returned? At that point, development itself becomes a source of domestic pressure. Yet the idea is not without risks. The Iranian economy is not an open arena into which capital can flow and automatically reach the public. There are semi-official institutions, front companies and a shadow economy that was created by sanctions and has thrived on them. If funds are channelled through these networks, the investment fund could become an outlet for the regime rather than an instrument for changing its calculations. Accordingly, the essence of the issue lies not in the figure itself, but in the design. Development must be made conditional – politically and in security terms – on verifiable commitments; economically , on directing investment towards productive civilian sectors; and socially, on ensuring that its benefits are reflected in the lives of ordinary citizens rather than in the budgets of institutions closest to the centres of power. Smart policy does not struggle to choose between punishing everyone and rewarding everyone. Rather, it seeks a formula that allows the benefits to reach society while limiting the regime’s ability to convert them into new instruments of influence. On this basis, the solution in question could be a remedy for a political logic that has long been accustomed to living on the edge of confrontation. It would be an attempt to make development a constraint on escalation rather than a reward that follows it; an attempt to make the regime see what it risks losing above ground, rather than remaining reassured by what it has concealed beneath it. If Iran has spent decades building “missile cities”, the real test now is whether it can build “economic cities” that make adventurism less appealing and finally allow the Iranian people to see the impact of policy in their daily lives, rather than only in the language of threats.