Iran’s supreme leader Ali Khamenei on March 21, 2021 on Iran’s economy: “Right now, according to world-renowned economists who are experts at the World Bank, they say that Iran’s economy is ranked 18th among the world’s top economies.”
This huge and strange claim raised some questions that cannot be answered. Who are these ‘world-renowned economists’? Do they have any names? In which World Bank are they based? When and where did they give this regime such an economic rank?
Speaking about ‘right now’ do they mean Iran’s economy is not suffering from inflation, stagnation, huge budget deficit, liquidity etc. An economy which is even not able to sell its oil, except by circumventing the sanctions by wasting Iran’s wealth. Are the criteria for a superior economy a decade of negative investment, 50 percent inflation, double-digit unemployment, and sub-zero economic growth?
A look at Iran’s economic indicators as narrated by world-renowned centers
Now, let’s take a look at the real situation of Iran’s economy reported by the state-run website Alef on December 30, 2019:
“On the eve of the beginning of 2020, the clear economic indicators of Iran have been studied according to the narrations of the world-renowned centers, numbers that the reader may grin at after reading each of them! But really why? We have examined the situation of 10 important economic indicators in the country. In this report, all statistics are documented in reputable international centers.”
- Rank 126: World Bank absolute poverty line (daily income less than $ 1.9) (Media explanation: “Of course, this statistic may be questioned given the living conditions of the Iranian people (!) And a more accurate assessment requires multidimensional poverty indicators for which statistics are not available.”
- Rank 65: Human Development Index. Human longevity with health.
- Rank 31: Global Hunger Index: Belarus, Bosnia-Herzegovina, Bulgaria, Chile, Costa Rica, Croatia, Cuba, Estonia, Kuwait and Latvia rank first to tenth.
- Rank 73: Purchasing power: If the citizens of different countries in the order of the richest stands in an auction queue of a commodity, Iranians will be the 73rd nation in terms of purchasing power.
- Rank 50: Products made in Iran: The statistics of 2017, which are related to 49 countries plus the European Union, have ranked the 50th position of the goods made in Iran.
- Rank 127: Ease of doing business: The World Bank’s 2020 report ranked Iran 127th out of 190 countries in terms of ease of doing business.
- Rank 50: Per capita food consumption
- Rank 36: Unemployment rate: Unemployment rate of 10.5 percent
- Rank 50: Gini coefficient (income inequality): Iran with a Gini coefficient index of 0.4093, i.e. the 50th country with the highest income inequality
- Rank 5: Inflation rate: Iran’s inflation rate is 40 percent, while in most countries of the world the inflation rate is in single digits and even in some countries such as Qatar, Saudi Arabia and the United Arab Emirates, the inflation rate is negative. Iran ranks fifth in the world after Venezuela, Zimbabwe, Argentina and Sudan.
- Rank 70: Quality of Life Index: Iran’s neighbor Saudi Arabia is ranked 32nd and Turkey is ranked 44th.”
These ranks and positions gained by this regime belong to last year. So certainly, the figures in the future will show a much deeper catastrophe.
Iran’s economy in 2019
At the beginning of July 2019, the World Bank publishes a new list of world economies based on their income levels. According to the World Bank, which has raised Khomeini’s attention: “In 2019, Iran ranked 103rd in terms of per capita gross national income with $5420, and 93rd in terms of purchasing power parity with $14,560.” (State-run daily Borna, November 15, 2020)
From where did Khamenei find the 18th place?
After a brief review of the history of the critical situation of the economy in Iran, let us try to verify Khamenei’s claim about the economy for this year.
The concept of gross domestic product (GDP) is used to measure the size and dimensions of the economies of different countries in international economic institutions such as the World Bank and the International Monetary Fund, which are also used as a basis for comparison and ranking in their annual and periodic reports.
Apparently, the basis of the regime’s claims about its ranking is a report that PricewaterhouseCoopers International (PwC) extracted from the International Monetary Fund’s preliminary report for 2016 in 2017, in which it points to the 18th position of Iran’s GDP in terms of purchasing power parity. But the statistics and charts on the updated IMF website do not confirm this ranking.
Also, according to the International Monetary Fund, in 2019, the Iranian regime was ranked 23rd. In the same year, the World Bank announced the Iranian regime as 26th on its list.
With a free exchange rate, the Iranian regime drops to 64th
All these stats games by the regime are while these calculations are estimated at the exchange rate of 4200 Tomans per US dollar, but if the real exchange rate of the open market is calculated, the rankings of the regime’s economy will decrease even more.
A comparison of the figures in the International Monetary Fund ranking with a comparison of GDP figures published in the reports of the Central Bank of Iran and the Statistics Center of Iran shows that the basis for calculating the exchange rate of the rial against the US dollar is the official rate of 4200 tomans.
For example, the Central Bank of Iran has calculated the current value of Iran’s GDP since 2019 at the rate of 4200 Tomans per dollar. But if we calculate the number announced by the Central Bank at the rate of 25,000 tomans per dollar, Iran’s position in the International Monetary Fund rankings in terms of GDP value would fall sharply to about 95.5 billion dollars and it would take 64th place next to Kenya.