EconomyIranMiddle East

Iran says sanctions have lost steam, economy recovering

Iran’s Minister of Industry, Mine and Trade Reza Rahmani says the impact from US sanctions has bottomed out and the Iranian economy is showing signs of turning around.

The United States has unleashed its “toughest ever” sanctions against Iran, but more than a year and half since reinstating all sanctions removed under the 2015 nuclear deal, Washington is frivolously piling up on the pressure because Tehran shows no signs of buckling.

“The situation we had last year in the market and other sectors has changed with the help of young jihadist forces, and our eight-month production has grown in different areas, including the market, mining and business, compared to the past year,” Rahmani said Tuesday night.

The minister cited food, cement and petrochemicals among the industries which have grown, saying “otherwise, we would have had problems for the adjustment of the market” to the new restrictions.

Over the past week, social media and news outlets have been abuzz with reports of drug-laced sponge cakes, with state officials and intelligence services suspecting foreign-based foul play which seeks to target the country’s buoyant food industry.

Drugs placed in Iranian sweets to sabotage Iran’s food industry: Officials

Drugs placed in Iranian sweets to sabotage Iran’s food industry: OfficialsIranian officials say the country

Earlier this month, the United States took aim directly at the livelihood of ordinary Iranians which it had exempted – at least on the surface – from its coercive measures. The US State Department imposed new sanctions on Iran’s biggest airline and its shipping network, depriving the country of the only viable modes of transportation for shipment of humanitarian goods.

“US persons will be prohibited from engaging in transactions involving Islamic Republic of Iran Shipping Lines (IRISL) or E-Sail, including transactions for the sale of agricultural commodities, food, medicine, or medical devices,” the Treasury’s guidelines on Iran sanctions read.

“In addition, non-US persons that knowingly engage in certain transactions with IRISL or E-Sail, even for the sale to Iran of agricultural commodities, food, medicine, or medical devices, risk exposure to sanctions under additional authorities,” it added.

Brian Hook, the State Department’s Iran envoy, said in a statement Tuesday that the US is now turning to “all remaining sources of export revenue, including from petrochemicals and metals that are subject to US sanctions”.

According to US financial new provider Bloomberg, the measures mark the next phase of President Donald Trump’s bid to squeeze Iran’s economy so hard that the government has no choice but to negotiate new limits on its nuclear and ballistic-missile programs.

The Trump administration claims it has slashed Iran’s oil exports to a trickle, but the Iranian economy is chugging along, much to the chagrin of American leaders who thought the country would come apart if squeezed very hard.    

Mostly decentralized, thousands of small- and medium-sized companies in Iran generate revenues and employ people in the millions. These companies have significantly cushioned the country from the economic shock of the American sanctions.

According to Rahmani, Iranian businesses did their best to maintain the status quo under the sanctions, preventing a disruption and deficit in the market.  

“We prevented any commodity we could produce domestically from entering the country and invested $10 billion allocated for imports in domestic production,” he said.

Rahmani touched on 20,000 unfinished cars gathering dust at the parking lots of Iran’s leading auto manufacturers because parts needed in their production could not be imported due to the sanctions.

“With the help of the defense industry and the private sector, we supplied most of the parts internally and completed and delivered about 10,000 vehicles,” said the minister.

Iran auto, defense industries eye tie-up to beat sanctions

Iran auto, defense industries eye tie-up to beat sanctionsIran’s auto industry has emerged as one of the frontlines in a raging “economic war” on the country which is lining up its defense ministry to protect the sector from US sanctions.

The automotive sector is the second largest industry after oil and gas and with a turnover of about $12 billion, it plays an crucial role within Iran’s economy, making up for 10 percent of the country’s GDP and 4 percent of its workforce.

Moreover, it supports about 60 other industries, such as glassmaking, aluminum, copper, steel, rubber, textiles and paint. Keeping the industry on track can ebulliently extricate the country from the malicious effects of the sanctions.

Iranian producers are the rare beneficiaries of the sanctions, because the decline in the rial’s foreign exchange value has boosted their earnings from mostly cross-border exports and overseas sales.

In the first eight months of the Persian year which started in March, Iranian exports to neighboring countries increased by 16 percent in weight, Rahmani said.

Putting the damper on the United States’ latest bid to twist Iran’s arm, however, is the country’s production of graphite electrodes used in steel-making.

“In the steel field, we identified the production of graphite electrodes as a chokehold and produced it domestically,” Rahmani said.

His announcement came as the US State Department warned entities and individuals on Monday to avoid exporting graphite electrodes and needle coke to the Islamic Republic, saying they were “essential materials for Iran’s steel industry”.  

Graphite electrodes are used to melt scrap in electric arc furnaces to produce new steel. Needle coke is used as a key material for graphite electrodes in an electric arc furnace.

Iran is a leading producer of steel in the world, with officials saying exports continue despite the US sanctions.

US expands sanctions on metal trade with Iran

US expands sanctions on metal trade with IranThe US government has warned against exports of steel-making materials to Iran, the latest salvo in Washington’s campaign to target everything from oil sales to civilian transportation and financial activities.

However, there are other bottlenecks and Iran is trying to redress them as much as it can. Within the next month, the country will bring online a tire-making factory in the country where reliance on imports for 70 percent of bus and truck tires has created problems, Rahmani said.

It will also open an aluminum smelter which officials say will compensate for losses suffered over the past decades in the domestic production of the primary metal.

On Wednesday, President Hassan Rouhani said, “Thanks to the people’s resistance to economic sanctions and the maximum economic pressure, the conditions in all areas are far better than last year, and our resilience to external pressure – economically, politically, socially, culturally and defensively – is far greater than the past.”

“Our prediction is that the economic growth of the country this year will not be negative, it will be positive,” he told a group of Iranians residing in Malaysia where he is to attend the Kuala Lumpur Summit.  

“A positive movement has started in the oil-free economic growth and we have been able to achieve self-reliance in many areas,” he added.

Rouhani said some of the automotive parts long imported are now manufactured by domestic companies.  

“We also had problems in the field of oil and gas installations and production of turbines and compressors, but today we are building them ourselves, and the boycott and pressure of the enemies, despite disrupting people’s lives, has led to self-sufficiency in some areas.”

Back to top button