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Esfandyar Batmanghelidj

@yarbatman

Jun 14

1. Iran cannot match Israeli firepower in the short term, but on a longer horizon, it can likely ramp-up production of ballistic missiles and drones.

Reports suggest that Iran is producing around 50 ballistic missiles per month. To me that seems like a floor, not a ceiling.

2. There's a view that Iran is a highly militarized country. In reality, a relatively small proportion of Iran's industrial base is dedicated to defense production. Mobilization of resources will be challenging for Iran, but Israel is fighting a country with latent capacity.

3. Iran's defense industrial base is much smaller and less sophisticated than that of Israel, but it is embedded in a much larger manufacturing sector.

Manufacturing accounts for just 11% of Israel's economy, but around 20% of the Iranian economy.

Read 11 tweets

Esfandyar Batmanghelidj

@yarbatman

Apr 1

1. Why hasn't China made bigger strides to develop an alternative to the US-led global financial system?

We've been talking about "de-dollarization" for years and the RMB still accounts for a tiny fraction of global trade...

What if China isn't *really* trying to de-dollarize?

2. The general theory of de-dollarization is that the increased use of economic weapons such as tariffs and sanctions by consecutive American administrations is spurring China to take the lead on the creation of an alternative financial system (which Russia, Iran etc. also want).

3. As @daniel_mcdowell and others have detailed, China has certainly worked to develop new payment messaging systems, central bank digital currencies, and swap lines that could amount to the building blocks of a new financial architecture, one that doesn't depend on the dollar.

Read 25 tweets

Esfandyar Batmanghelidj

@yarbatman

Feb 19

1. @Brad_Setser's new NYT op-ed argues that China presents a "danger the world economy" because of its enormous trade surplus in manufactured goods.

I think he is identifying an important issue about imbalances.

But his argument and this chart ⬇may exaggerate the problem.

2. At first glance, the chart substantiates the claim that China is exporting a disproportionate volume of manufactured goods to the world, even compared to other big industrial exporters like Germany and Japan.

But the chart presents surpluses as a share of *global* GDP.

3. This is a peculiar choice. If we want to contextualize China's growing exports of manufactured goods, we need to think about China's growing economy.

Setser rightly points out that the total value of Chinese manufactured exports have surged, especially since the pandemic.

Read 18 tweets

Esfandyar Batmanghelidj

@yarbatman

Feb 4

1. So Netanyahu came to Washington and what he got is a memo on Iran, not an EO with new sanctions designations.

Trump said he is "unhappy" to sign to memo, and that he hopes it "will hardly have to be used," while also stating he wants a deal with Iran.

Huge shift from 2018.

2. If Trump was really aiming to resume maximum pressure, he would have signed a new EO to widen sanctions on Iran's oil sector, and Treasury would have designated Chinese ports and refiners pursuant to the EO in order to reduce volumes of Iranian crude flowing to China.

3. These ports and refiners are known targets and the Biden administration had almost certainly prepared the designations that are ready on the shelves of OFAC.

Biden didn't enact these sanctions because of concerns of blowback for global oil markets and US-China relations.

Read 6 tweets

Esfandyar Batmanghelidj

@yarbatman

Feb 2

1. If there’s any geopolitical logic in the Trump tariffs, this is it:

To sustain the fleeting unipolar order and keep “America first,” the US doesn’t need to confront adversaries. It needs to coerce allies.

Trump is testing how economic coercion can make *allies* obey.

2. US political and business elites increasingly believe that the rules-based order and globalization has served to reduce the hard power gap between the US and its rivals, especially China. This threatens unipolarity.

Biden’s braintrust helped usher in this new consensus!

3. @adam_tooze has written extensively on the striking coherence between the outlooks of the two administrations.

Trump, like Biden, wants to move away from the current international economic order, to put “America first.”
lrb.co.uk/the-paper/v46/…

Read 15 tweets

Esfandyar Batmanghelidj

@yarbatman

Dec 16, 2024

1. Iran is in the midst of a slow-moving energy crisis.

Sanctions are partly to blame. They have prevented investment and access to technology.

But regulation is a bigger challenge. More than 60% energy generation in Iran is undertaken by quasi-private companies.

2. This is a legacy of Iran's long and tortured push for market liberalization, which gained momentum in the early 2000s only to a hit wall when sanctions began to isolate the economy.

Officials knew that liberalization could lead to greater competitiveness and efficiency.

3. But by the time the privatization plan was ready in 2013, financial sanctions had put Iran into a recession. The private sector was on the back foot.

A total of 22 power plants were transferred, mainly to quasi-state companies that had been opportunistically created.

Read 9 tweets

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