asdasdasdasdasdasdasdasdasdasd
All in Economy
The storming of the U.S. embassy in Baghdad by Iran-backed militias produced many surreal scenes, but perhaps none more so than that captured in a video shared widely on social media. The short clip shows a green garbage can found at the embassy, which the protestors recognized as an Iranian-made product.
Today, a new Iranian precariat is seeking economic justice. Iranian economic planners and policymakers, like their fellow technocrats around the world, are struggling to find the pathway to continued growth in the face of factional infighting and foreign interference.
In the first two weeks of December, Iranian government officials and business leaders participated in bilateral economic summits with counterparts from Tajikistan, Kyrgyzstan, and Uzbekistan—the highest-level economic exchanges with these countries in several years. Iran is expanding its “neighborhood policy” to Central Asia as it seeks to grow its non-oil exports.
Iran’s programmers had to battle a suspicious state and a dismissive public to usher Iran into the digital age. Now, in the aftermath of a nationwide internet blackout, triggered in response to the recent protests, the resolve of the country’s programming community is being tested like never before.
The gasoline price hike of November 15 triggered widespread violent protests in Iranian cities. Three days later the government announced that it would increase the amount of cash transfers to compensate for the price increase and soften its blow. But do the new transfers adequately compensate for the gasoline price increase?
As the Trump administration’s “maximum pressure” sanctions campaign rolls on, it might seem like Europe not only lacks the means to defend its trade with the Islamic Republic, but also that there’s little left to defend. But even with significant barriers, Europe continues to export billions of dollars of parts, machinery, and transport equipment to Iran.
Earlier this month, the Statistical Center of Iran reported a record high level of employed Iranians, with nearly 25 million people in work. Meanwhile, the IMF has revised down its 2019 projection for Iran’s economic growth to -9.5 percent. What explains the divergent narratives in Iran’s employment data and growth data?
At first glance, the IMF’s new projection that Iran’s economy will contact 9.5% this year seems to support the Trump administration’s claims that its “maximum pressure” sanctions campaign is bringing the Iranian economy to the brink. But Iran’s economy is poised rebound to zero growth next year—despite the sanctions.
◢ An Iranian contractor has completed a water supply tunnel in Bandarawela, Sri Lanka, earning the praise of thousands on social media. The technical capacity of Iranian contractors remains unheralded, even as both state and private sector firms assemble impressive portfolios of completed transport, energy, and urban development projects abroad.
◢ New data from China’s customs administration show a significant drop in purchases of Iranian oil. The declared value of September imports was just USD 254 million, down 34 percent from August and down 80 percent from the same month last year. But observed exports from Iran remain high, suggesting that the customs data is not capturing the full value of Iranian oil sales to China.
◢ A free trade agreement between Iran and the Eurasian Economic Union (EAEU) will come into force on October 27, enabling preferential trade between Iran and a trading bloc comprised of 183 million people. But a leading research body has cautioned that the “low level of Iran’s commercial complimentary” with the EEAU market will temper prospects in the short term.
◢ Since the year 2000, Iran has about doubled its annual imports of pharmaceutical products from the European Union, reflecting both advances in Iranian healthcare and the growth in Europe-Iran trade ties. But a distortion in the value of trade relative to quantity means that Iran is paying significantly more than the likes of Russia, Turkey, and Pakistan for each kilogram of medication.
◢ New data indicate that, while Donald Trump’s policy of “maximum pressure” has reduced Iranian oil exports to near zero and seriously hurt Iran’s economy, it has not caused anything resembling economic collapse. Furthermore, these data suggest that the economy is not in a steep decline, one that would anytime soon force Iran to capitulate.
◢ A recent report from the London-based publication Petroleum Economist offers a cautionary tale of “fake news.” The claim that China will extend a $400 billion credit line to Iran is poorly sourced and inconsistent with both recent trends in China-Iran trade and the scope of China’s Belt and Road Initiative.
◢ Trump may have exempted Iran’s Chabahar port from sanctions, but India has struggled to realize its ambitions for the major infrastructure project. Recent government data confirms that no Indian investment has been made in the port in two years. As one Indian official involved with the project since its origins put it, “This was not what we hoped to achieve. Chabahar is only about photo-ops now, not substance.”
◢ Give US and European officials a simple quiz about the Iranian economy and they will fail to answer fundamental questions. A poor understanding of Iran’s economy is the single most significant gap in our perception of Iran and the nature of the conflict in which it is currently mired.
◢ Despite sharp criticism from the private sector, the Rouhani administration has delayed a key reform to Iran’s currency policy, frustrating the country’s beleaguered business leaders. In late June, government spokesman Ali Rabiei stated definitively that the administration has no plans to eliminate the subsidized foreign exchange rate made available to importers of essential goods.
◢ The state-owned company at the center of European efforts to save the Iran nuclear deal is entering its next phase of development. In a push to process transactions more quickly, INSTEX is rolling out a new factoring service for European exporters. The company is also making new hires that will enable it to expand operations more quickly in the coming year.
◢ Over the last 18 months, the Iranian rial has lost nearly 70 percent of its value, hammered by the Trump administration’s decision to reimpose secondary sanctions on Iran in violation of the JCPOA. But new interventions by the Central Bank of Iran appear to have helped stabilize the currency, leading some commentators to proclaim that the rial is no longer vulnerable to Trump’s maximum pressure campaign.
