Esfandyar Batmanghelidj Profile picture
Sep 14, 2018 13 tweets 8 min read Twitter logo Read on Twitter
THREAD: As protests continue and the rial tumbles, #Iran is increasingly seen as an economic basket case that has squandered its chance to join the ranks of the #BRICs. Here are 7 charts that challenge that view.
bourseandbazaar.com/articles/2018/…
Back in January, I told @folha reporter @DiogoBercito that I saw parallels between the Brazilian protests that have been running since 2014 and those in Iran. In both contexts you hear calls to overthrow the government.
www1.folha.uol.com.br/mundo/2018/01/…
This is the same reaction to the same macroeconomic failures. The frustrated cry of the Iranian protestor is the same cry as that of the Brazilian protestor. Sure, there is some local political and economic dialect. But the language of corruption and inequality is the same.
Chart 1: Inflation
Both #Iran and #Brazil have struggled to keep inflation in check over the last 20 years. Recent rising inflation in both countries has increased the cost of living and fueled protests over economic mismanagement.
Chart 2: Unemployment
#Brazil has typically outperformed Iran in generating jobs, but in the last few years unemployment has risen sharply, converging with the rate in #Iran. A lack of jobs has been a primary driver of protests in both countries.
Chart 3: Ease of Doing Business Rankings
U.S. officials like to describe #Iran as a near impossible place to do business. But Iran actually ranks one place higher than #Brazil in the @WorldBank's Doing Business Rankings (at a dismal 124). Both countries have rampant corruption.
Chart 4: FDI
Despite its own difficult business environment, #Brazil has attracted 25 times net FDI as #Iran since 1980. Iran missed out on the late-90s and post-financial crisis emerging markets booms as sanctions laws were tightened in 1996 and 2008.
Chart 5: Growth
However, missing out on FDI has not made #Iran a growth laggard. Iran and Brazil have the *exact same* average annual GDP growth since 1980: 2.54% The key difference is that Iran's growth has been more volatile as it is tied to the price of oil.
Chart 6: Debt-Fueled Growth
#Iran has oil, but #Brazil's has debt. The recourse to bond markets and IMF loans has allowed Brazil to reduce economic volatility and soften recessions. While Iran’s oil buyers can be fickle, creditors are always ready to offer Brazil more financing.
Chart 7: GDP per Capita
#Iran and #Brazil have seen similar overall levels of economic growth and standards of living, as measured by purchasing power, have likewise improved at a similar rate. But this is all the more remarkable given extra tools Brazil has had at its disposal.
What is the lesson? Governments of very different political persuasions routinely fail to solve the same fundamental challenges of economic development. This is because economic growth is difficult to achieve, harder to sustain, and insufficient to improve living standards.
In this context, what's most unique about the crisis in Iran is not the economic reality, but the political reaction. Despite the clear parallels between Brazil and Iran, we do not see foreign powers seeking regime change to alleviate the frustrations of the Brazilian people.
tl;dr we have a distorted view of Iran's economy because we are relying on political context to understand economic issues. We should be looking at the data first. Iran and the BRICs are in the same boat. More here:
bourseandbazaar.com/articles/2018/…

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More from @yarbatman

Aug 22, 2018
1. A couple things that stick out about @FireEye's announcement regarding the discovery of an Iranian “influence operation” across websites, Facebook, and Twitter. This doesn't look like an Internet Research Agency type operation.
fireeye.com/blog/threat-re…
2. Let’s start with one of the primary websites identified as part of the network. Instituto Manquehue. You can check it out here: institutomanquehue.org
3. It is a weird site that is clearly trying to look legitimate. But it doesn’t seem inherently “fake.” The institute appears to have been around since 2014 offering a leftist vision for Latin American journalism free from the “foreign influences of West and East.”
Read 30 tweets
Aug 20, 2018
1. I spend a lot of my time thinking and writing about #Iran. This has a lot to do with meeting Dr. Ehsan Yarshater when I was a high school junior. I am so pleased with the news of a $10 million gift to secure his legacy.
news.columbia.edu/content/1983
2. Back in 2009, I had a vague idea that I wanted to go to @Columbia. Good school + New York seemed enough justification. But my grandmother recommended I go see Dr. Yarshater, an old friend, to learn more about the university.
3. It wasn't the most logical advice. I don't think my grandmother was really aware that Yarshater had not taught for many, many years and that he'd probably have little practical advice for a prospective undergraduate. But I had no idea either, so I gamely traveled to NY.
Read 17 tweets
Aug 3, 2018
1. I wanted to collect some of the years of reporting and writing that highlights why sanctions on #Iran are a sledgehammer, not a scalpel. The only certain outcome of sanctions is pain and suffering for ordinary people. Everything else is a gamble at best. Photo: @Newshaphoto
2. @jrezaian:"The next time an 'Iran expert' tells you that he supports the most crushing sanctions on the regime because they are the best way to support the Iranian people, be sure to ask him the last time he lived through something like this."
washingtonpost.com/news/global-op…
3. @pedestrian: "An economist I know from the University of Tehran put it this way: 'Sanctioning a country like this is similar to permanently disabling a human being. You might stop inflicting harm, but the damage is there forever.'"
vox.com/2015/8/12/9126…
Read 16 tweets
Aug 2, 2018
1. The #Trump administration would like us to believe its sanctions policy is about changing “the behavior of the leadership in #Iran to comport with what the Iranian people really want." Now we have the chance to test whether this is really true.
bloomberg.com/view/articles/…
2. As I write in @bopinion, #Iran has a new central bank governor, Abdolnasser Hemmati. He has a lot on his plate. A currency crisis exacerbated by sanctions fears took his predecessor down. The Central Bank of Iran is going to be placed under sanctions once again next week.
3. European governments are working to find ways to facilitate payments to #Iran's central bank despite the returning US sanctions. But Iran needs to meet the reform requirements set by #FATF to better prevent financial crime. This is a precondition for these special solutions.
Read 9 tweets
Jul 20, 2018
1. On Sunday, @SecPompeo will speak at an event to "support Iranian voices." Some in the Iranian-American community see the #Trump administration as allies in bringing secular democracy to #Iran.

As an Iranian-American, I find this so, so troubling.

lobelog.com/pompeo-religio…
2. Most proponents of regime change agree on a vision of #Iran as “a secular, parliamentary democracy" though they are light on specifics. There is something *totally wild* about casting Pompeo as an ally for any political movement that places secularism on a pedestal.
3. You might think Pompeo's anti-Islam views would be what undercuts any claims that he cares about Iran's common people. He has stated, "The threat to America is from people who deeply believe that Islam is the way and the light and the only answer."
vimeo.com/192276878
Read 14 tweets
Jul 19, 2018
1. @Najmeh_Tehran, the journalist who wrote this piece, is immense. This is an issue she has been covering for years on the ground in #Tehran. You and colleagues at @FDD have cited her reporting in papers, briefings, and testimony. But let's put that aside for a second.
2. Maybe we can find another source that's "capable of writing accurately." How about Ken Katzman, who @FDD has welcomed to its events as "a foremost expert on Iran’s Revolutionary Guard Corps and sanctions policy at Congress’ think tank, the Congressional Research Service."
3. The phenomenon described in @Najmeh_Tehran's piece is a simple one. The reapplication of sanctions undermines a moderate president whose primary foreign policy achievement was their removal. As sanctions return, hardline elements, such as the IRGC, are poised to regain power.
Read 13 tweets

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