Muhammad Saftain Anjum
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Welcome BackCan they compete with Chinese tire production though ? Will Russians purchase Iranian products like cars ? tires ? Unfortunately Iran doesn't have a reputation for producing such products.
In any case, as it stands, Iran cannot even compete economically with Saudi Arabia on an even playing field. The Saudis trade with the west & its allies, the USA, Canada, Australia, EU, Japan, South Korea, all these advanced economies AND they trade with China, Russia, India & the rest.
Iran on the other hand can only trade with Russia, China & a few developing countries under the table. Even with India, Iran can only trade under restrictions.
Keep in mind the USA has the largest economy on the planet & the EU has the second. China is a close third.
Currently Iran has 50%+ inflation (and that's the minimum), 60% are living below the poverty line & the Rial is effectively worthless. Currently at 535,500 Rial vs the US Dollar. Not long ago it was in the 270,000 range. In 2018 it was in the 50,000 range. I have family in Iran who work in real estate. They tell me it's not uncommon for land lords to charge tenants in Dollars or in Rials according to the USD exchange rate on a monthly basis. I honestly can't blame them with how erratic the value of the Rial is.
The current ruling establishment has effectively dollarized the Iranian economy. Even conservative commentators claim that it's 20% due to sanctions, 80% due to incompetence.
To be fair, there are lots of global currencies that have lost a significant amount of value vs the US Dollar recently. Like the Pakistani, Indian Rupees, the Turkish Lira, Argentinian Peso & many more. However Iran has something they don't. Iran is resource rich with the 4th largest reserves of crude oil & the second largest reserves of natural gas on earth. If properly managed, Iran should flourish & people should be prospering.
When that cleric, Soleimani, who was on the assembly of experts was shot a day or two ago, I wasn't surprised in the least. People in general are not content with the current situation & they're fed up with these failing economic policies. You can support the current establishment all you want, you can be a die hard supporter, but it's a fact that their economic policies have largely failed.
Some will claim that Iran's woes are all due to sanctions, but then what about Russia ? Keep in mind the Russians are considered to be extremely, excessively corrupt by the west. Yet they were able to stabilize their economy when sanctions were western imposed on them. they had a contingency plan & did what they had to do to stabilize their currency & economy.
The Russians pegged the Ruble to Gold, increased interest rates, prohibited exchange of Rubles to USD/EU & implemented several other measures. Interestingly enough, all of those measures were implemented temporarily, but they had the psychological effect of calming panicking citizens.
In Iran I don't see the government actively trying to stabilize the economy. They could peg the Rial to gold or oil & gold & other commodities, they could raise interest rates, even slightly, they could ban Rial to USD trade. I'm not advocating that these policies be implemented indefinately but they could have done so temporarily. Unfortunately it seems like it's too late at this point this the Rial has become effectively worthless.
In 1979 one US Dollar was worth 70 Rials. From the start of the Pahlavi dynasty until the end, the Rial floated from 20 Rials to 70 Rials n 50 years. That's 3.5 times higher. Keep in mind, at the time, 70 Rials to the Dollar was considered excessively high. Indeed economic grievances were a driving force behind the fall of the Pahlavi government.
However since the revolution, the Rial going from 70 to 500,000, that's more than 7000x higher. Compare 3.5x higher under the Pahlavi government to over 7000 times higher under the Islamic Republic. The facts speak for themselves.
The way I look at it, the biggest issue is that the people currently running Iran seem to be more concerned about Palestine then they are about the economic well being & prosperity of the Iranian people. I don't know what the future holds, but one thing is for sure, the current economic situation in Iran is not sustainable.
You came back after long break