Iran and the Economic Complexity Index

The Research Center of the Iranian Parliament has evaluated Iran's global ranking in the Economic Complexity Index. The center's report states that the Economic Complexity Index indicates how export diversity can reflect the apparent differences in economic development among countries. It is noted in the report that this index can better and more accurately reflect a country's economic growth and the volume of economic activities compared to other indices. According to the Research Center, Iran ranked 110th among 144 countries in 2012 according to the Economic Complexity Index, alongside countries like Cameroon, Ivory Coast, Qatar, Zambia, Nicaragua, and Algeria. The report adds that Iran's ranking in the Economic Complexity Index has worsened over the past 50 years, dropping from 64th place in 1964 to 110th in 2012. Mir-Ali Hosseini, in an interview with economist Ahmad Alavi in Sweden, asked for his opinion on the difference between a simple economy and a complex economy. Ahmad Alavi states that in the economies of countries like Iran, the production of goods and services occurs in a simple process, and the production network is also simple. This economist emphasizes that countries with simple economies often export raw materials or traditional goods and lack advanced and competitive technology. According to Ahmad Alavi, one of the characteristics of these types of economies is that they do not have significant added value and have limited job creation capacity; the Research Center's report indicates that over 70% of Iran's exports in 2012 were oil and petroleum products. Alavi adds that traditional goods also constitute a significant portion of non-oil exports. This economist stresses that the simplicity of the economy makes it 'exogenous' and vulnerable to external shocks.