Page 18 - IRANRptNov20

company that supports business diplomacy between Europe and Iran through publishing, events and research—​wrote​ ​in a June 14 piece for Bloomberg Opinion.
Iran officially earned just $8.9bn from the sale of oil and related products in 2019-20, down from a peak of $119bn less than a decade ago.
Noted Batmanghelidj: “Like their counterparts in other hydrocarbon-dependent states, Iranian officials have long talked about the importance of reducing reliance on oil revenues. But the need for transition to a non-oil economy has become critical, following the Trump administration’s reimposition of secondary sanctions in November 2018, which has left China as the only major purchaser of Iranian crude.
“The transition is well under way in the private sector, with a boom in manufacturing. For the past decade, companies have been looking beyond Iran’s large domestic market to export an increasingly diverse range of goods to a wider range of markets, turning the devaluation of the rial to their advantage. In 2019-20, non-oil exports, totalling $41.3 billion, exceeded oil exports for the first time in Iran’s modern history. Around half of Iran’s non-oil exports were in manufactured goods, meaning that Iran’s factories earned more than double what the country’s oil rigs earned in export revenue last year.”
Sanctions pressure contributed to a 7% decline in total non-oil exports, but the total remains near historic highs, said Batmanghelidj, with Iranian consumer goods and industrial products—ranging from cookies to stainless steel—exported widely within the Middle East as well as further afield to China, Russia and Europe.
While Iran’s oil sector decreased by 35% in 2019-20, its manufacturing sector only contracted by 1.8%.
Iran’s automotive and steel sectors, dominated by inefficient state-owned companies, have been severely impacted by US sanctions and an accompanying rise in inflation which has depressed domestic consumption, but the private sector—including small and medium enterprises which produce food products, home goods, and apparel, among other consumer products—is seen as having compensated for the struggles of the state firms.
And with the coronavirus (COVID-19) pandemic having depressed oil prices, non-oil exports have become even more important to Iran’s economy.
18​ IRAN Country Report November 2020 www.intellinews.com