Volume 10, Issue 37 (Fall 2021 2021)
serd 2021, 10(37): 199-214 |
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Rabi’i H, Takrosta M. Investigating the Effects of US Economic Sanctions on the Rural Economy in Iran. serd 2021; 10 (37) :199-214
URL: http://serd.khu.ac.ir/article-1-3741-en.html
URL: http://serd.khu.ac.ir/article-1-3741-en.html
1- Associate Professor of Political Geography, Kharazmi University, Tehran, Iran , rabiee@khu.ac.ir
2- ; Master Graduate in Geography and Rural Planning, Kharazmi University, Tehran, Iran
2- ; Master Graduate in Geography and Rural Planning, Kharazmi University, Tehran, Iran
Abstract: (3487 Views)
Introduction
Sanctions are means to avoid violence in order to intentionally purchase or trade with a person, organization or country as an expression of protest, usually for moral, social, political or environmental reasons. Sanctions on Iran can be divided into seven categories in terms of their character. Financial sanctions of commercial banks and central banks, sanctions of the European Union and international organizations, sanctions of mercantile (import and export) and investment, sanctions of petroleum, sanctions of knowledge and technology, detention of international property and assets of Iranian individuals and organizations, and sanctions of transactions with Iranian individuals and organizations. These sanctions have influenced different aspects of Iran's economy as have been highlighted by the researchers. Sanctions affect production and welfare, optimal portfolio of investors, economic growth, environmental pollution, the countries’ major trading partners, etc. The damage caused by economic catastrophe and its impact on people varies at different scales. Many studies underlined that villagers are highly vulnerable due to poor economic conditions. Also, it should be noted that the resistance and reconstruction of the national economy in the face of sanctions requires a change in the management of microeconomic resources which are the potential factors of economic growth. In regard to the effects of economic sanctions on the economy of rural areas, in this study the indicators of rural economy were investigated to evaluate and analyze its relationship with sanctions in the period 2012 to 2018.
Methodology
The purpose of this article is to examine the effects of US sanctions on the rural economy in the Islamic Republic of Iran. In order to do that, the study used a descriptive-analytical method. A literature review was conducted to refer to domestic and international published papers in Normags, Jahan-e-Islam, Science Direct, etc., and was used for the theoretical foundations of the study. Furthermore, the secondary data available in the Statistics Center of the Islamic Republic of Iran in relation to rural economics was utilized for the evaluation. Due to the novelty of the topic, there was a shortage of academic source about economic sanction and its relation to rural economy.
Discussion and conclusion
The findings confirm that the sanctions have had a significant impact on Iran's economy, especially the rural economy. Although Iran's agricultural sector experienced positive growth in 2019, the growth is not stable and in case of recurrence of disasters such as drought and water scarcity will be weakened. Petroleum and gas export has been the main sources of Iran's economy after the 1980s war. The value added of the crude oil and natural gas extraction sector in 2019 continuously decreased to 35%. This strategic sector of the country's economy started to drop in the fall of 2018 at the same time as imposing sanctions against the country. This amount was 33.5 % drop in the fall of 2018, and in the winter of the same year, it dropped to 26 %. in the spring of 2019, the sector growth was negative 41%, in summer of this year was negative 47%, in the fall was negative 15.3% and in the winter was negative 26.8%. Based on the data from the Statistics Center in 2016 (after the Joint Comprehensive Plan of Action), the growth of fossil energy sector is higher than the average growth of other sectors, and the size of Iran's economy with oil will be larger than the size of the economy without oil, which is ignored by opponents of the Joint Comprehensive Plan of Action. On the other hand, the significant fall in Iran's foreign exchange earnings immediately appeared in the Iranian industrial sector from 2018 to the fall of 2019. Meanwhile, the villages have been significantly affected by these sanctions due to their weak and fragile economy. The effects are shrinking household size, significant decline in agriculture sector, crop production, revenue, income gap, etc.
Sanctions are means to avoid violence in order to intentionally purchase or trade with a person, organization or country as an expression of protest, usually for moral, social, political or environmental reasons. Sanctions on Iran can be divided into seven categories in terms of their character. Financial sanctions of commercial banks and central banks, sanctions of the European Union and international organizations, sanctions of mercantile (import and export) and investment, sanctions of petroleum, sanctions of knowledge and technology, detention of international property and assets of Iranian individuals and organizations, and sanctions of transactions with Iranian individuals and organizations. These sanctions have influenced different aspects of Iran's economy as have been highlighted by the researchers. Sanctions affect production and welfare, optimal portfolio of investors, economic growth, environmental pollution, the countries’ major trading partners, etc. The damage caused by economic catastrophe and its impact on people varies at different scales. Many studies underlined that villagers are highly vulnerable due to poor economic conditions. Also, it should be noted that the resistance and reconstruction of the national economy in the face of sanctions requires a change in the management of microeconomic resources which are the potential factors of economic growth. In regard to the effects of economic sanctions on the economy of rural areas, in this study the indicators of rural economy were investigated to evaluate and analyze its relationship with sanctions in the period 2012 to 2018.
Methodology
The purpose of this article is to examine the effects of US sanctions on the rural economy in the Islamic Republic of Iran. In order to do that, the study used a descriptive-analytical method. A literature review was conducted to refer to domestic and international published papers in Normags, Jahan-e-Islam, Science Direct, etc., and was used for the theoretical foundations of the study. Furthermore, the secondary data available in the Statistics Center of the Islamic Republic of Iran in relation to rural economics was utilized for the evaluation. Due to the novelty of the topic, there was a shortage of academic source about economic sanction and its relation to rural economy.
Discussion and conclusion
The findings confirm that the sanctions have had a significant impact on Iran's economy, especially the rural economy. Although Iran's agricultural sector experienced positive growth in 2019, the growth is not stable and in case of recurrence of disasters such as drought and water scarcity will be weakened. Petroleum and gas export has been the main sources of Iran's economy after the 1980s war. The value added of the crude oil and natural gas extraction sector in 2019 continuously decreased to 35%. This strategic sector of the country's economy started to drop in the fall of 2018 at the same time as imposing sanctions against the country. This amount was 33.5 % drop in the fall of 2018, and in the winter of the same year, it dropped to 26 %. in the spring of 2019, the sector growth was negative 41%, in summer of this year was negative 47%, in the fall was negative 15.3% and in the winter was negative 26.8%. Based on the data from the Statistics Center in 2016 (after the Joint Comprehensive Plan of Action), the growth of fossil energy sector is higher than the average growth of other sectors, and the size of Iran's economy with oil will be larger than the size of the economy without oil, which is ignored by opponents of the Joint Comprehensive Plan of Action. On the other hand, the significant fall in Iran's foreign exchange earnings immediately appeared in the Iranian industrial sector from 2018 to the fall of 2019. Meanwhile, the villages have been significantly affected by these sanctions due to their weak and fragile economy. The effects are shrinking household size, significant decline in agriculture sector, crop production, revenue, income gap, etc.
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