In recent years, Iran’s regime has experienced a significant decline in its rank in world trade. This drop can be attributed to several factors.
Discussing the economic issues of this regime is challenging, as those involved in the system are aware that the economy is governed by a complex web of rules and laws under the control of the regime’s supreme leader.
Classical statistical methods are insufficient to estimate, explain, and analyze the regime’s economy due to the lack of transparency. Economic statistics in Iran are selectively published, only highlighting fake and baseless successes.
Other statistics are kept hidden, leading to a lack of comprehensive data. The regime’s economy relies heavily on oil revenues, which have been subject to volatility due to the regime’s adventurous policies. Fluctuations in oil prices directly impact the country’s economic indicators.
The different factions within the regime, appointed by supreme leader Ali Khamenei, hold similar influence over Iran’s economy and global trade indicators. These factions act as implementers and enablers of Khamenei’s macro policies.
In recent years, the regime has faced various challenges and turmoil, particularly concerning its controversial nuclear program, missile development, terrorism, and interference in regional affairs. These actions have been aligned with the regime’s aspirations rather than the interests of the Iranian people.
Consequently, these activities, along with international sanctions, have significantly reduced Iran’s oil revenues. The lack of planning for diversification into non-oil exports and failure to invest in other sectors of the economy have contributed to the country’s overreliance on oil income.
As a result, the economy has been heavily influenced by smuggling and underground activities, making it difficult to obtain accurate and reliable statistics to assess Iran’s government rank in global trade indicators. The combination of reduced oil revenues, lack of economic diversification, and reliance on informal channels for trade and revenue generation has hindered Iran’s ability to participate effectively in international trade.
It has also made it challenging for external observers to determine the true extent of Iran’s economic performance on the global stage. Indeed, the devaluation of the national currency and the drop in exchange rate indicators have had a negative impact on Iran’s global trade indicators.
The regime often pursues devaluation to compensate for budget deficits and address negative trade balances. However, this devaluation can lead to a decrease in the country’s global trade performance and may not be openly acknowledged by the government.
Furthermore, the lack of significant involvement of the Iranian regime in areas such as global production value chains, domestic business environment, and competitiveness of domestic products against foreign goods has also contributed to the decline in Iran’s global trade indicators.
Factors such as increased production costs and inflation rates have added to the challenges faced by the government in maintaining competitive trade positions. The underground and smuggling economy in Iran, along with the regime’s refusal to join international financial conventions like FATF, has indeed contributed to the country’s economic challenges and hindered its integration into the global economy.
The lack of participation in such conventions allows the regime to continue its illicit activities and avoid international scrutiny. Because of these factors, the cost of imported goods in Iran has been steadily increasing, while the prices of the regime’s exported goods have seen a significant decline. The absence of healthy competition with other countries has put Iranian export goods under pressure to be offered at lower prices to stay competitive in the global trade arena and maintain market access.
International isolation has further limited the regime’s options for import and export interactions, leaving the country with only a few allies to conduct trade. This limited network of trading partners imposes additional constraints and restrictions on Iran, leading to a more challenging trade environment and favoring the interests of those trading partners over Iran’s.
The ultimate result of these circumstances is a sharp decline in Iran’s global trade indicators, affecting the country’s overall economic performance. The consequences are particularly felt by most of the Iranian people and vulnerable groups, while the ruling class and the Mullahs bear less of the brunt.
