The neglected capacities of Iran's economy

One of the topics always subject to intense debate and interpretation is what percentage of Iran’s economic problems is related to sanctions.

The view among critics is that some quarters within the state and outside it are open to influence by the enemies’ misrepresentation of the country’s economic realities, including their innuendos that more than 70% of Iran’s problems are related to sanctions.

The primary aim of these insinuations, they say, is to scuttle the long-held vision of Iran immune to foreign pressure as part of cultivating a “resistance economy” which relies on internal resources and demand.

The problem is that the principles of the resistance economy have been relegated to sloganeering by the same quarters, where what is needed is genuine action - an imperative which Leader of the Islamic Revolution Ayatollah Seyyed Ali Khamenei noted during his visit to an exhibition of the achievements and capabilities of the private sector held in Tehran Wednesday.

Some state officials, including former president Hassan Rouhani, are on record to have said that only 30% of problems can be attributed to sanctions and that many of the economic challenges can be tackled with planning and a spirit of national self-reliance and unity.

This is not a tall order by Iran's standards. A look at some data in the agricultural, industrial, and services sectors and the capabilities of knowledge-based companies shows that there is enough slack to allow for growth and the creation of new opportunities to put the economic house in order.

Iran’s marvelous wealth of genetic resources

Iran is one of the most exceptional countries for its natural resources, being home to 11 of the climatic regions in the world where at least 40% of the global economy are derived from biological resources.

Iran produces over 90% of the world’s supply of saffron, the most expensive spice sometimes called “red gold” - more than 250 tonnes of which is exported to at least 50 countries.

Apart from being valued as a culinary condiment, saffron is a dye, perfume and as a medicinal herb. One of its features is its low need for water which makes it best suited for cultivation across much of Iran amid subnormal rainfall levels.

The flavor and fragrance sector is another attractive field for business. Those sniffing business opportunities in Iran mostly have their nose on the ground for its oil and gas, leaving out a myriad of other potential enterprises. 

Iran is the world's biggest producer of damask rose and rosewater, accounting for 70% of the global output. Local artisans steaming petals in hulking copper pots over fires in Kashan and Qamsar in central Iran to distill rose water have become a spectacle of tourism in recent years.

The damask water from Qamsar has iconic fame, being used to wash the Ka’aba in Mecca to which Muslims turn each day to say their prayers. Essence extracts from damask water in Kashan also end up in the production of high-end international perfume brands.

Perfumery has a long history in Iran dating back to the 7th century Sassanid era. Communities living on fragrance business are still dotted across the vast country.

Iran is the world’s 17th producer of flowers with an annual production of two billion blooms, but ranks no better than 107th among the exporters.

These facts and figures reflect the remarkable opportunities to be tapped, when the global fragrance and perfume market is expected to reach about $73 billion in 2025 and grow to hit more than $105 billion by 2030.

The number of similar examples is fairly large. Iran is the third largest producer and exporter of dried fruits in the world, with an annual export value of over $700 million. Last year, the country exported 390,000 tonnes of fresh dates worth more than $300 million, according to the customs administration.

The Iranian plateau is also rich in herbal species due to its climatic diversity, where 8,000 plants proper to the medicinal, dermo-cosmetic, and nutriceutical use grow inside the country, including 2,000 exclusive to Iran.

In recent years, the World Health Organization (WHO) has turned its attention to traditional medical practices and repeatedly called for a surge in the scientific validation processes of such assets as an important contribution to public health around the world.

The use of herbal medicinal products and supplements has increased tremendously over the past three decades with no less than 80% of people worldwide relying on them for some part of primary healthcare.

Iran has a rich ethnomedical heritage deeply rooted in the history of the territory. This has given the country a golden opportunity to establish itself as a leader in therapeutic use of plants and vegetal extracts for the production of new active compounds and lifesaving medical assets.

Experts say with proper planning, there is a market opportunity worth $30-40 billion in annual revenues from the trade and export of herbal medicines and other products in the next 10 years.  

There is no doubt that sanctions are a threat to Iran's economy, but it can be turned into an opportunity with tact and adept management. 

Resigning to life under the dark shadow of sanctions where a plethora of resources abound to build and bolster the economy is a massive disservice which those in management positions should bear in mind and try to lead by example.

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