Iran's Position in Global Foreign Trade

The head of the Customs Administration in a recent interview with ISNA stated, "The current state of foreign trade indicates the export of 1,900 types of goods worth $40 billion, while our country has the capacity to export 4,000 types of goods valued at $100 billion." In other words, if these statistics are accurate, about 60% of Iran's export capacity remains unused. Utilizing less than half of Iran's export potential is certainly not a favorable position for Iran's economy on the international stage. In an era described by globalization, Iran's foreign trade symbolizes the status of its economy in the world. Over the past century, Iran's traditional agricultural economy has gradually transformed. The discovery and exploitation of oil and its transfer to the West created a new source of income for the government and simultaneously allowed for exports and imports on a new scale. This has affected the structure of Iran's foreign trade. One researcher who has explored the history of Iran's economy writes: "Throughout the 20th century, Iran's foreign trade sector grew rapidly, and the doors of Iran's economy opened mainly due to increased oil revenues. However, since the pattern of non-oil exports has essentially remained static and because meeting the needs for industrialization and modernization has relied on imports." (Bariy, 1363). Now, after more than four decades since this statement was published, the situation remains unchanged, and Iran's economic structure has consistently remained exogenous and inward-looking. As reports from the International Monetary Fund indicate, the size of global trade (total exports and imports) reached over $36 trillion in 2014. Iran's trade size (total exports and imports) in the same year was slightly over $192 billion, with approximately $86 billion in exports and nearly $96 billion in imports. Based on this data, Iran's share of total global exports is estimated to be close to half a percent (IMF website). Iran's share in global trade has consistently fluctuated below half a percent in the five years leading up to 2014. Therefore, the current situation appears to be stabilized. In this context, Azim Fazlipoor, a member of the Scientific Council of the World Intellectual Property Organization of Iran, states that Iran's share of global trade at the end of last year was only 0.06%, while this figure was around 1.5% in 1976. The essential part of Iran's exports to the world consists of crude oil or petroleum derivatives, and non-oil exports have a limited share in Iran's foreign trade. According to a report from the World Trade Organization in 2013, the share of mineral and fuel products in Iran's exports in 2012 was about 77.2%. This indicates the vulnerability and volatility of Iran's economy in the international arena. Severe fluctuations in Iran's foreign trade reflect the underdevelopment and external tensions of Iran's economy, making it risky. The impacts of these fluctuations on economic and social institutions are inevitable and undeniable. Such persistent tension, which indicates a lack of planning in the macro-political and economic sphere, leaves no room for strategic management. The struggle for "survival" that aims to manage during a crisis is the dominant management style in such conditions. For this reason, decision-making becomes momentary, and resources are not used rationally. Iran's foreign trade balance during periods of oil recession is either negative or not significant. If oil exports are disregarded, the outlook is even bleaker. With such a limited foreign trade balance and this volatility, it is impossible to repair infrastructure that is constantly exposed to deterioration. The modernization of technology and industries and catching up with the rapid train of economic, social, and political development is also not possible with such a limited level of foreign trade balance.