Abstract
One of the most pressing challenges currently facing the Islamic Republic of Iran is not primarily related to domestic unrest against the Ayatollah regime or the ongoing confrontation with Israel backed by the United States, but rather to a deeper structural crisis linked to water bankruptcy. The scale of this issue has become so severe that the current administration has begun considering the relocation of the capital as a strategic necessity. Water bankruptcy is the result of decades of fragmented planning, inconsistent policymaking, and a broader institutional inability to manage water resources effectively, both before and after the 1979 Iranian Revolution. This paper examines the structural nature of Iran’s water bankruptcy and analyzes the socio-economic dynamics that are gradually turning the possible relocation of the capital from Tehran to coastal regions such as Makran into a vital requirement (Madani, 2014; Ketabchy, Kerachian and Nouri, 2021).
Davide De Ponte (Junior Researcher - G.E.O. Environment)
Introduction
Hydrologists generally define water bankruptcy as a socio-economic condition in which water demand significantly exceeds available water supply (Madani, AghaKouchak and Mirchi, 2016). From a microeconomic perspective, such a crisis could theoretically be mitigated by restoring a balance between demand and supply, expanding water resources, and implementing nationwide policies aimed at reducing water consumption.
Historically, Iran managed to overcome many of the environmental constraints imposed by its geography, despite the fact that large portions of the country consist of arid and semi-arid regions. Over centuries, Persian civilization developed highly sophisticated hydraulic systems and technologies, including qanats, canals (jouys), clay pipelines, arch dams, large gravity dams, watermills, flood-control infrastructures, ice houses, and water storage reservoirs (Yazdanpanah, Hayati et al., 2024). These innovations enabled Iranian societies to adapt to difficult climatic conditions for generations.
Today, however, Iran is experiencing an unprecedented water crisis. Major water reserves are rapidly declining, while water quality continues to deteriorate across several regions of the country (Madani, 2014).
Socio-Economic Drivers
The socio-economic drivers behind the phenomenon of water bankruptcy can be divided into four macro-areas:
Demographic Pressure
Since the 1979 Iranian Revolution, Iran’s population has grown rapidly, increasing from approximately 37 million inhabitants to more than 85 million today (Yazdanpanah, Hayati et al., 2024). This demographic expansion has rendered many of Iran’s traditional water distribution systems increasingly inadequate for meeting current levels of water demand.
At the same time, population distribution across the country has become highly uneven. Iranian metropolises have gradually turned into overcrowded economic centers, while many rural areas remain underdeveloped (Madani, AghaKouchak and Mirchi, 2016). The disparity between densely populated urban areas and sparsely populated rural regions has complicated the management of water resources and limited the development of smaller economic hubs capable of reducing pressure on major cities.
As a consequence, Iran lacks a decentralized and interconnected water distribution system capable of efficiently supplying distant regions of the country. Metropolitan infrastructures are therefore under enormous strain, frequently experiencing interruptions and water shortages (Ketabchy, Kerachian and Nouri, 2021). In several cases, urban administrations have resorted to discharging domestic, agricultural, and industrial wastewater into urban water systems in order to cope with rising demand, contributing to a progressive deterioration in water quality (Yazdanpanah, Hayati et al., 2024).
Unsustainable Economic Model
The agricultural sector alone consumes around 92% of Iran’s national water resources (Madani, 2014). Meanwhile, the strategic importance of the oil industry within the national economy encouraged successive governments to prioritize hydrocarbons over modernization of the agricultural sector. As a result, agricultural production still relies heavily on outdated and inefficient irrigation techniques that consume disproportionate quantities of water (Madani, AghaKouchak and Mirchi, 2016).
In addition, several Iranian administrations pursued the long-term objective of food self-sufficiency. This strategy led to increased production of staple crops such as wheat, placing further pressure on national water reserves (Ketabchy, Kerachian and Nouri, 2021). Structural limitations, including technological backwardness, limited natural resources, and rapid population growth, made the achievement of true autarky extremely difficult. Nevertheless, some governments continued to pursue ambitious visions aimed at reducing Iran’s dependence on neighboring countries such as Iraq, Afghanistan, and Saudi Arabia, even at the cost of overexploiting domestic water resources.
Iran’s rapid modernization also played a major role in intensifying environmental pressures. Significant infrastructural development took place both before and after the 1979 Revolution, particularly during the Iran-Iraq War and the years of international sanctions, when the country sought to reinforce its economic and political independence (Hassaniyan, 2024). However, environmental sustainability was often considered secondary compared to the immediate goals of industrialization and economic growth.
This developmental approach generated what several scholars describe as a form of “managerial myopia,” where policymakers focused primarily on short-term economic gains while underestimating the environmental consequences of their decisions (Madani, 2014). As a result, many infrastructural and engineering projects severely damaged both natural ecosystems and long-term human well-being.
Iran’s broader “hydraulic mission” is therefore still ongoing. Although large dam projects have become increasingly controversial, the Iranian government continues to invest heavily in technological solutions such as inter-basin water transfers and desalination projects (Yazdanpanah, Hayati et al., 2024). Former President Rouhani, for example, promoted large-scale plans to transfer water from the Persian Gulf and the Caspian Sea toward central Iran.
Collapse of Water Resources
Iran relies heavily on groundwater extraction for irrigation in order to compensate for surface water deficits. Currently, more than 55% of total water demand is met through groundwater pumping (Madani, 2014). The aggressive exploitation of aquifers has caused declining groundwater levels and significant deterioration in water quality across various regions. Nearly 50% of Iranian plains are currently considered to be in critical condition (Madani, AghaKouchak and Mirchi, 2016).
The growing reliance on deep wells made traditional water management systems such as qanats less attractive, causing many of them to dry up and become unusable. Groundwater increasingly functions as a supplementary source whenever surface water becomes insufficient. Pumping intensifies when surface water declines due to drought or the reallocation of water toward other uses (Yazdanpanah, Hayati et al., 2024). Consequently, rising water demand over the years has resulted in a dramatic increase in groundwater extraction.
Given the low cost of energy, pumping expenses never became a significant limiting factor. When wells dry up because of falling aquifer levels, farmers dig deeper wells and purchase more powerful pumps. The cumulative effect of this behavior has been devastating (Madani, 2014).
In theory, wells should be regulated through permits; in practice, however, illegal wells are extremely widespread. Illegal pumping therefore represents an additional major challenge for policymakers (Ketabchy, Kerachian and Nouri, 2021). The government attempted to install smart meters in order to better monitor groundwater extraction and associated energy consumption. Nevertheless, this has not yet produced a significant behavioral change among well owners. The government claims to be pursuing a national aquifer restoration and rebalancing plan aimed at halting and reversing current overexploitation trends.
(Lake Urmia in Iran in 2020 (left) and 2023 (right), after being desiccated by drought. NASA )
Institutional and Geopolitical Crisis
Iran has been subjected to a series of economic sanctions since the Islamic Revolution of 1979. These sanctions expanded significantly following the adoption of United Nations Security Council Resolution 1696 in 2006 concerning the Iranian nuclear program (Hassaniyan, 2024). Although these sanctions did not directly target the Iranian environment, they indirectly contributed to several long-term environmental consequences.
Even though most Iranian water problems are not purely technological in nature, the lack of access to advanced water technologies and international scientific exchanges has limited Iran’s technical capacity to address many of its water-sector challenges (Yazdanpanah, Hayati et al., 2024). Moreover, the economic and political instability caused by international sanctions increased policymakers’ interest in populist development policies capable of producing immediate and visible short-term economic effects.
The agreement regarding the Iranian nuclear program, known as the JCPOA or Iran Deal, together with the gradual removal of sanctions, was considered useful for rebuilding the country’s deteriorated environmental conditions by granting Iran improved access to international technologies, scientific cooperation, and foreign investment (Hassaniyan, 2024).
Iranian water resources also suffer severely from an inadequate governance structure. Within the water sector, the multiplicity of actors and regulatory bodies naturally generates competition and conflict (Ketabchy, Kerachian and Nouri, 2021). The Department of Environment, responsible for environmental protection, possesses limited political power and lacks the regulatory capacity necessary to prevent environmental damage.
Institutional reforms introduced during Ahmadinejad’s presidency shifted water management jurisdictions from hydrographic basin boundaries to provincial political boundaries, further complicating water resource management (Madani, AghaKouchak and Mirchi, 2016). These reforms increased competition among riparian provinces and intensified conflicts concerning water allocation within interprovincial river systems.
The hierarchical structure of Iran’s water management system creates opportunities for corruption and generates severe inefficiencies in translating decisions into concrete actions (Ketabchy, Kerachian and Nouri, 2021). The lack of coordination extends beyond the water sector itself, as many water-related problems stem from dynamics in other sectors, particularly rapid urbanization. The absence of coordination among stakeholders and the prioritization of projects with visible short-term benefits have produced fragmented and unsustainable water governance.
The long-term effects of decisions and their potential unintended consequences are generally ignored. Prevention does not constitute the primary objective of institutions: challenges often remain unresolved until they are officially labeled as “crises” and reach critical levels (Madani, 2014). Since severe environmental damage may become irreversible, the prevailing “crisis management” paradigm produces damages that cannot be mitigated or are extremely costly to repair.
The Strategic Turn Toward Makran
The possible relocation of Iran’s capital from Tehran toward the Makran region is strategically significant because it represents an attempt to redefine the country’s economic and geopolitical model in response to its broader structural crisis (Akbari and Soltani Asl, 2025). Makran is increasingly conceived as the new strategic space through which Iran could transform itself from a continental power centered on its arid internal plateau into a maritime power projected toward the Indian Ocean (Salehi, 2023).
According to Hadi Veicy, one of the leading scholars on the subject, Iran’s central problem stems from decades of “land-based” development concentrated within the central plateau without respecting the ecological limits of the territory. Veicy argues that this strategy generated forms of “environmental instability and water tensions” severe enough to threaten even “the survival of Iran’s civilization” (Salehi, 2023). For this reason, the proposed strategic solution involves shifting “from an internal and land-based approach to a sea-based, coastal and external strategic approach.”
Makran’s strategic relevance derives from its geographical position. Located along the Gulf of Oman and directly connected to the Indian Ocean, the region offers Iran direct access to global maritime routes without relying exclusively on the Strait of Hormuz, one of the world’s most vulnerable chokepoints (Akbari and Soltani Asl, 2025). Several studies underline how Chabahar and the Makran coast could evolve into a major logistical and commercial hub connecting India, Central Asia, Russia, and Eurasia through the International North-South Transport Corridor (Salehi, 2023).
Numerous scholars also emphasize the geo-economic dimension of the strategic turn toward Makran. The development of Chabahar port could enable Iran to become a regional transit platform capable of attracting foreign investment, strengthening commercial ties with India and Central Asia, and partially reducing the economic isolation generated by sanctions (Akbari and Soltani Asl, 2025). One recent study even described Makran as a “national platform for Iran’s maritime-oriented economic leap” (Salehi, 2023).
From a geopolitical perspective, Makran also represents Iran’s attempt to acquire greater maritime projection within the Indian Ocean. Several studies connect this strategy to the classical sea power theories of Alfred Thayer Mahan and Nicholas Spykman, according to which modern great powers expand their influence through the control of maritime routes and strategic coastal nodes . In this context, Makran is increasingly viewed as Iran’s new geopolitical axis, capable of strengthening the country’s presence within oceanic trade routes, energy networks, and the broader strategic dynamics of the Indian Ocean Region.
Finally, the strategic turn toward Makran also carries important domestic political and territorial implications. The sources emphasize that southeastern Iran has historically remained marginalized compared to the country’s political and economic center (Memarian, 2001). The development of Makran could therefore contribute to reducing territorial imbalances, decentralizing the Iranian system, and creating new urban, industrial, and logistical centers along the coast.
Within this broader framework, the potential relocation of the capital would not simply represent an administrative measure, but rather the symbol of a much deeper strategic transformation of Iran itself: from the centrality of the arid internal plateau to the centrality of the sea, from Tehran toward the Indian Ocean.
Conclusion
In conclusion, Iran’s water bankruptcy is the consequence of decades of unsustainable development, institutional inefficiency, and environmental mismanagement .Rapid demographic growth and uneven urbanization progressively increased pressure on already fragile water infrastructures, while ineffective regulation and fragmented governance encouraged the overexploitation of groundwater, ultimately transforming water scarcity into a national crisis. Within this broader framework, the possible relocation of the capital to the coastal region of Makran reflects Iran’s attempt to redefine its geopolitical position through a stronger maritime orientation toward the Indian Ocean.
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