1. We often hear that Iran is headed for a "Venezuela-style" economic collapse. We are rarely offered data to back-up that comparison.
Looking at data for the oil sector, it's clear that Iran has yet to enter the kind of sustained decline that Venezuela has experienced. #OOTT
Looking at data for the oil sector, it's clear that Iran has yet to enter the kind of sustained decline that Venezuela has experienced. #OOTT
2. A "Venezuela-style" economic collapse is preceded by long, uninterrupted declines in oil production (since 2006) + consumption (since 2012). Iran has faced big shocks, but remains on a different path because of a capacity to readjust within 1-2 years. Here is the indexed data.
3. Venezuela has only recently faced direct sanctions pressure. In this way, it's an interesting comparator with Iran. Sanctions proponents often argue that most of the economic dysfunction in Iran is attributable to mismanagement/corruption/inefficiency. That's true. But...
4. ...if Venezuela has done worse than Iran without sanctions pressure over the last decade, it's a good indication that "mismanagement" is relative. Like most developing countries, Iran may not be able to reach its full potential due to mismanagement, but it can still grow.
5. More simply, were it not for sanctions, the functioning elements of Iran's economy would outweigh the bad. That's a major reason why the comparison with Venezuela makes such little sense—the cases are actually quite different once you get beyond the political chumminess.
