Iran’s First Non-Oil Trade Surplus

Meanwhile, some economic experts see distorted foreign exchange rates and the government ban on imports of luxury cars as other factors behind the slide in imports. They argue that foreign exchange rates must be determined based on economic realities rather than petrodollars to boost domestic production and exports while reducing smuggling.

As Rouhani administration officials — and their critics — continue to see the country’s trade balance as black or white, there are experts who believe it all could be both an opportunity and a threat.

Daniel Khazeni-Rad, an editor at English-language economic daily Financial Tribune, told Al-Monitor, “The positive trade balance can be seen in two ways. First, it shows that Iran finally has moved from an oil-based economy to a mixed economy. It also denotes a worrying trend on the other hand as local manufacturers have tougher external competition. This is likely to be compounded when Iran’s application to the World Trade Organization is accepted and tariffs and protectionist policies must make way for fairer treatment of foreign businesses.”

Iranian officials stress that the government has tried to lower imports of basic goods such as wheat and replace them with domestically made products — all part of its policy to implement the so-called resistance economy promoted by Supreme Leader Ayatollah Ali Khamenei.

Following the Jan. 16 removal of nuclear-related sanctions as part of the implementation of the nuclear deal, international institutions such as the World Bank have predicted that Iran’s economy will grow 3-5% in 2016. Economic experts say that an increase in exports in the non-oil sectors will largely depend on how the government uses its foreign exchange reserves. With the expected gradual return of Iranian business to the global market, it now remains to be seen how the government can materialize its promise to revive the country’s economy and expand its share of global trade.

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