Abstract
The purpose of this study is to evaluate the performance of the Iranian first five-year plan (1989-1993) for economic, social, and cultural development and to suggest an outline of the major domestic and foreign challenges confronting the second plan. The first plan receives mixed reviews; it is important to evaluate both its successes and failures to shed light upon the related causal factors for better future economic management of the country. The article will conclude that economic development in Iran will depend on political-economic and institutional reforms, regional economic cooperation and political stability in the Persian Gulf.