Iran Experiences Positive Economic Growth without Oil: President

[Philosopher]

TEHRAN (Tasnim) – Iranian President Hassan Rouhani said the country has achieved a positive economic growth without reliance on petrodollars and despite being under the pressure of sanctions.

“While economic growth rate in most countries in the world has declined or has become negative due to the outbreak of the coronavirus, our economic growth rate without oil has become positive in spite of the cruel sanctions,” Rouhani said at a meeting in Tehran on Monday, held to devise plans for the fulfillment of the goal of surge in production.

The president also hailed ‘surge in production’ as a wise objective for achieving an appropriate economic growth, saying Iran is dealing with the sanctions, trying to contain the coronavirus pandemic, and combatting unemployment at the same time.

Last week, the World Bank Group predicted in a new report that Iran would be able to restore its positive economic growth next year despite the US sanctions and outbreak of the new coronavirus pandemic.

The World Bank said Iran would see its gross domestic product (GDP) shrink again this year by 5.3 percent, up from minus 8.2 percent in 2019.

In a new year message on March 20, Leader of the Islamic Revolution Ayatollah Seyed Ali Khamenei stressed the need for a further surge in the national production in Iran with the participation of all organizations and sectors, saying, “Officials should act in a way that production will witness a surge, God willing, and that there will be a tangible change in the lives of the people.”

https://www.tasnimnews.com/en/news/...ositive-economic-growth-without-oil-president

 

[Muhammed45]

TEHRAN (Tasnim) – Iranian President Hassan Rouhani said the country has achieved a positive economic growth without reliance on petrodollars and despite being under the pressure of sanctions.

“While economic growth rate in most countries in the world has declined or has become negative due to the outbreak of the coronavirus, our economic growth rate without oil has become positive in spite of the cruel sanctions,” Rouhani said at a meeting in Tehran on Monday, held to devise plans for the fulfillment of the goal of surge in production.

The president also hailed ‘surge in production’ as a wise objective for achieving an appropriate economic growth, saying Iran is dealing with the sanctions, trying to contain the coronavirus pandemic, and combatting unemployment at the same time.

Last week, the World Bank Group predicted in a new report that Iran would be able to restore its positive economic growth next year despite the US sanctions and outbreak of the new coronavirus pandemic.

The World Bank said Iran would see its gross domestic product (GDP) shrink again this year by 5.3 percent, up from minus 8.2 percent in 2019.

In a new year message on March 20, Leader of the Islamic Revolution Ayatollah Seyed Ali Khamenei stressed the need for a further surge in the national production in Iran with the participation of all organizations and sectors, saying, “Officials should act in a way that production will witness a surge, God willing, and that there will be a tangible change in the lives of the people.”

https://www.tasnimnews.com/en/news/...ositive-economic-growth-without-oil-president

I dont want to badmouth this guy. But One should tell this guy, you signed JCPOA nonsense only to freely sell oil. At least now he could understand that West is not the whole World and its not good to sell your valuable crude oil at cost of your vital industries.

 

[GWXP]

Economic growth is possible due to INVESTMENTS

There are 3 types of investments: 1) domestic investments 2) government made investments 3) foreign investments

1) Domestic investments are made by domestic agents borrowing money from local and from foreign banks. It is normal for a developing country that has shortage of domestic capital to borrow money from foreign sources

2) Governments make investments by borrowing from domestic and from foreign capital markets. Governments can issue bonds and borrow money from foreign sources and make investments into the country

3) Foreign investor come with their foreign money.


As you can see all three types of investments are heavily dependent on foreign capital, especially if you are a developing country with limited savings in local banks.

It is normal when local banks borrow money from foreign banks and offer this borrowed resources as cheap credit in the local markets.

It is normal when big companies and state, issue bonds and borrow money from foreign sources in order to finance high-return projects inside a country.

Access to foreign capital is crucial in boosting local economies.


THE BIGGEST PROBLEM WITH SANCTIONS (beside oil exports ban) IS THAT IRAN CAN NOT GET ACCESS TO FOREIGN CAPITAL MARKETS. The price of borrowing for such sanctioned countries like Iran is very high. As a consequence there is lack of investments and lack of economic growth.


Iran should be compared to Turkey.....Both are 80mln countries and both have some advantages and disadvantages if compared to each other.

Turkey is located closer to EU and Eastern Europe. This allows Turkey to export to Europe by sea, without need to build expensive road and railway system, because most of its major cities are located near the coast. Turkey grows by trading with EU by water but Turkey (unlike Iran) lacks energy.

Iran on the other hand has most of its cities located far away from the coast in the mountains where costs of building roads and railways is very high and moving goods around the country is expensive and difficult due to terrain. However, Iran (unlike Turkey) has oil---this advantage, however, makes Iranian economy vulnerable to "Dutch disease" and "Resource curse"

So the point is that since Turkey has its advantages and disadvantages and Iran has its strong and weak sides---so both countries should be comparable to each other.

However, as you can see Turkey is ahead of Iran...Iranian GDP PPP is only 70% of Turkish GDP PPP------this gap shows the price of (decades long) sanctions and isolation from foreign capital markets

Turkey has bigger GDP and a corporate debt of 450bln$....Iran has smaller GDP but also 10bln$ of foreign debt.

Turkish GDP is bigger, mainly because Turkey can borrow foreign capital to grow its economy and attract foreign investments, while Iran was isolated from international capital markets and foreign investments by sanctions for many decades.

Economic growth can be : 1)consumption driven growth 2)investment driven growth 3) export driven growth.

For all three you need access to foreign capital.


Conclusion is that it is impossible to grow fast in modern world while being in isolation. You need access to foreign capital to grow your economy and you can't do that if you are under sanctions.

So this is a main issue in debates between conservative and moderate elements in Iranian politics, with moderates claiming that the cost of independent foreign policy is simply too high.

 

[Shawnee]

I dont want to badmouth this guy. But One should tell this guy, you signed JCPOA nonsense only to freely sell oil. At least now he could understand that West is not the whole World and its not good to sell your valuable crude oil at cost of your vital industries.

Fo decades, we sold crude oil and we were forced to import their shit to keep them our oil buyers. They kept part of our money over years and exported bubblegum to us. Net gain was loss of crude oil and ruining internal production. It did not end anywhere for us.

Economy was under the direction of so called “technocrats “ for decades who only regurgitated western economy books for us and delivered none. They blamed sanctions for everything.

We have moved from one Razmara to another Razmara.

Many countries prospered under sanctions like China in pre-1972.
.......

 

[Muhammed45]

Fo decades, we sold crude oil and we were forced to import their shit to keep them our oil buyers. It did not end anywhere for us.

Economy was under the direction of so called “technocrats “ for decades who only regurgitated western economy books for us and delivered none. They blamed sanctions for everything.

We have moved from one Razmara to another Razmara.

Many countries prospered under sanctions like China in 70s.
.......

Couldnt say any better.