One of the main challenges of Iran’s economy is the practical possibility of growth and promotion of domestic products and the ability to export quality products in global markets. Otherwise, any country that fails to do so will be phased out of the international economic system.
Economic Indicators of Iran According to Reputable International Centers
Last year, when the coronavirus had not overtaken Iranian society and the crime of the mullahs in the field of health had not been revealed, Alef website on 30 December 2019 in a report citing the report of reputable international centers, examined and compared the country’s economic index with leading countries in the Middle East.
This report in the field of industry and products ‘Made in Iran’ states: “Statista International Statistics Institute, through field research in 52 countries, ranks ‘Iran made’ products 50th.”
Iran’s Low Position in The World Production Index
The low level of industrial production, which is the basic basis for non-oil exports, has also been accepted by the Ministry of Industry, Mine and Trade, which is itself in charge of production and trade. In a report on the decline of Iran’s position in the global economy, the Center for Business Studies and Research of this Ministry says:
“A study of the global position of Iran’s economy in 2019 shows that Iran is not in a good position in some international indicators related to production, especially global competitiveness, business ease index and global innovation index,” Jahan-e-Sanat daily wrote on December 28, 2020.
The same report shows the negative growth of the industrial sector, especially since 2018. The decline in investment to compensate for the depreciation of production and the lack of increase in new capacity adds to a decade of decline in this area.
Statistics show that in 2019, inflation in the production sector reached more than 36 percent, and the rate of this variable in 2020 was still high.
Closure of Industrial Units
Also, the study of the situation of industrial and production units shows that in 2019, some 40 percent of active industrial units (more than 14,000 units) with a capacity of less than 50 percent were operating and more than 70 percent of the reason for the closure was lack of liquidity and about 20 percent lack of market (About 10,000 units). In this regard, it is said that in the period 2016-2019, the average share of production guilds was estimated to be less than 20 percent.
The Decline in Foreign Trade in the Last Decade
“No jump in exports and imports due to production constraints and lack of competitiveness in global markets over the past decade has led to the decrease of exports of 75.8 million tons (down to 14 percent) worth $21.6 billion (down to 20 percent), imports 21.8 million tons (down to 1 percent) worth $23.1 billion (down to 18.5 percent), the average price per ton of exported goods at $285 (down to 6.8 percent) and the average price per ton of imported goods at $1057 (down to 17.5 percent),” Jahan-e-Sanat added.
Two Dangerous Scenarios
It is these shocking realities in the field of production and exports that have led the Chamber of Commerce to express concern that the Iranian government is an ‘exceptional’ government that stubbornly goes beyond the FATF standards and has practically brought exports to a standstill. Finally, there are just two ways in front of this government:
“There are two scenarios in this story that seem to have reached the last days. Iran should abandon normal foreign trade. In this case, the risk of phasing out of tangible and observed global trade must be accepted over time,” wrote Eghtesad News website on December 31, 2020.
Iranian economic activists and businessmen have come to the conclusion that Iran is gradually removing itself from the normal world economy due to the non-acceptance of the FATF.
“Overhead costs and complex ways to bypass end foreign trade capability. Another scenario is for the country’s governing institutions to accept the truth of the world and to organize their foreign trade in such a way that they can sustain the economy,” Eghtesad News added.
Which, of course, means backing away from the regime’s nuclear and terrorist policies.
Excluding Iran from the World’s Largest Free Trade Agreement
“Recently, a very important economic agreement was reached between 15 countries of Asia and the Pacific, including ten countries of Southeast Asia (ASEAN) and 5 countries of China, Japan, South Korea, Australia and New Zealand in the form of the world’s largest free trade agreement called the Comprehensive Regional Economic Partnership. Which, unfortunately, was not given much attention in Iran,” wrote Eghtesad-e-Mardom daily on December 28, 2020.
“The cost of exchanging the economy, especially the production sector, has increased significantly due to sanctions, and the country’s competitiveness in the region has decreased. The result of these issues has been a near halt in Iran’s economic growth over the past decade, a decline in real household incomes, and a decline in investment in the country,” Eghtesad-e-Mardom added.