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Esfandyar Batmanghelidj Profile picture
@yarbatman
Aug 19, 2019 • 5 tweets • 2 min read • Read on X
2019 will probably be the first year in #Iran's modern history where non-oil export revenue will exceed that of oil exports, reaching >$40bn.

Iran's non-oil exports have doubled in the last 10 years under sanctions. This is the future of Iran's economy.
datawrapper.de/_/a36Es/
For comparison, total exports in 1995:

Pakistan: $8bn
Egypt: $3bn
Iran: $4bn

In 2018, total exports were:

Pakistan: $23bn
Egypt: $29bn
Iran: $33bn

Iran arguably faced greater geopolitical headwinds, but it's non-oil exports now exceed total exports for both Egypt/Pakistan.
State policy is prioritizing non-oil growth. Iranian companies are learning how to be exporters. The rial is cheaper and so are Iranian goods. Iraq and Afghanistan are more stable. Transport links emerging to Far East and Central Asia. There's a case for optimism here.
The narrative is that Iran is a total economic basketcase, but Egypt and Pakistan are sitting there having had years of US aid, no sanctions, support from the IMF and have let their total exports fall below Iran’s non-oil exports.
Iran is well behind the likes of Russia, Turkey, Thailand, and Vietnam in terms of non-oil exports. But the reorientation of the economy away from oil is something not many energy-rich countries have managed.

Basically, Iran’s economy is a mess, but not a lost cause.

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More from @yarbatman

Esfandyar Batmanghelidj Profile picture
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. Image
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 Profile picture
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. Image
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 Profile picture
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. Image
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 Profile picture
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. Image
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. Image
Read 9 tweets
Esfandyar Batmanghelidj Profile picture
Nov 27, 2024
1. The new sanctions targeting key Russian banks have caused a sharp devaluation of the ruble. Russia's central bank isn't going to be able to keep devaluation and inflation in check as FX revenues are interrupted.

Does this mean sanctions are finally working?

Probably not... Image
2. To know if sanctions are working, we need to be precise about the goals.

The primary goal of sanctions is to create enough economic pain to convince Putin to change his behavior and cease the war in Ukraine. This is the coercive aim.
3. However, if Putin cannot be coerced, then the secondary goal is that the sanctions deprive him of the resources he needs to pursue his war aims.

It is highly unlikely that either goal will be achieved, even if Russia now enters a period of "stagflation."
Read 25 tweets
Esfandyar Batmanghelidj Profile picture
Oct 10, 2024
1. Sanctions are meant to crush industrial output. But sometimes the opposite occurs.

In Iran, the white goods industry has a problem: sanctions-induced overcapacity.

For @phenomenalworld, @BarzinJafartash and I explore how sanctions and industrial policy can collide. Image
2. As an oil exporter, Iran has long struggled to develop its manufacturing base.

In the early 2000s, it suffered from a classic case of "Dutch disease." An oil boom led to appreciating currency, more purchasing power, and rising imports at the expense of domestic producers.
3. But then the sanctions hit.

For the most part, sanctions have been a drag for Iranian industrial firms. Output in the automotive sector has fallen significantly, as Iranian automakers are cut-off from global supply chains and starved of investment.
Read 14 tweets

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