Why Did Iran's Economy Hold Up Amid War, Sanctions, and Blockade?

Iran's economy has faced sweeping sanctions, trade restrictions, and external pressure in recent years; however, the country's economic activity has not come to a complete halt, and production, distribution, trade, and service networks continue to operate.

According to the report of Safir Arjan, Safir Arjan newspaper wrote: At the annual meeting of the International Monetary Fund in Bangkok, Abdul Nasser Hemmati, the Governor General of the Central Bank, pointed out the resilience of Iran's economy and emphasized that the claim of the collapse of the country's economy is nothing more than an illusion. But what factors have made Iran's economy continue to operate despite these pressures? The answer must be sought in a combination of internal capacities, economic diversity, adaptability of enterprises and long experience of facing external constraints; Features that have enabled the continuation of economic activity.

domestic market; A support for production and employment

Iran's domestic market also plays an important role in maintaining economic activities. A significant part of production units, stores, service companies and small businesses offer their products and services to domestic consumers. This feature allows the economy to continue part of its activities based on domestic demand and not solely dependent on the state of foreign trade. In many industries, manufacturers can adapt to the market conditions by modifying the product mix and changing the supply method. In addition, the wide network of small and medium businesses, skilled manpower, and the relationship between manufacturers and domestic suppliers create another capacity to maintain the flow of economic activity. Of course, the purchasing power of households affects the amount of domestic demand; Therefore, curbing inflation and maintaining people's real income is very important for better use of the domestic market capacity.

Iran's economy is bigger than the oil sector

One of the most important factors of the resilience of Iran's economy is having diverse production and service sectors. Although oil and gas play an important role in providing foreign exchange earnings and financial resources of the country, the whole economy of Iran is not limited to this sector. Agriculture, food industry, production of consumer goods, metal industry, petrochemical, mining, transportation, technology and services constitute a set of economic activities, each of which provides a part of domestic needs. This expansion has made restriction in one sector not mean stopping all economic activities. The

Continuation of banking services and provision of essential needs

Economic activity is not limited to factories and production units. The payment network, banking services, distribution of goods, transportation and provision of essential needs are also important components of economic stability. In his words, Hammati has declared the continuity of banking services and payment system, provision of foreign exchange for basic goods and medicine, and maintaining financial stability among the priorities of the central bank. The continuation of these services allows households and businesses to do their daily affairs and the cycle of internal exchanges does not stop moving.

Sanctions experience adaptation rather than cessation

One of the resilience factors is the long experience of Iran's economy in facing sanctions. During the past years, economic enterprises have been forced to adapt the methods of supplying raw materials, obtaining parts, transferring money and selling their products to new conditions. In some industries, manufacturers have turned to in-house manufacturing, equipment repair, reverse engineering, and the use of alternative suppliers. In the field of trade, companies have tried to continue their activities by developing regional connections and using various trade routes. This experience does not mean that sanctions are ineffective, but it shows that a part of Iran's economy has been able to find practical solutions for external restrictions. The existence of technical knowledge, specialized manpower and operational experience accumulated in different industries plays an important role in this process.

natural resources and industrial capacities; Support the return to growth

Iran has energy resources, mineral reserves, agricultural capacities and a set of basic industries. In addition to providing a part of the domestic needs, these capacities also provide the possibility of producing goods that can be supplied in regional markets. Petrochemical industries, metals, agricultural products and some industrial goods can play a role in the development of exports and the creation of foreign exchange income if suitable trade and financing conditions are provided. The more effective use of these capacities depends on the improvement of transportation infrastructure, access to export markets, and the reduction of production barriers. Iran's economy has capacities that can become the engine of growth if the conditions improve.