Iran’s ‘Resistance Economy’ Strategy

Iran has implemented a ‘resistance economy’ strategy to mitigate the effects of war and sanctions. The approach focuses on increasing domestic production, reducing imports, and preserving the value of the rial. Key measures include a 1.5 trillion rial stimulus package, tax breaks, low-interest loans, and subsidies for domestic manufacturers.

Import Substitution and Tariffs

Iran has set import-substitution targets, aiming to meet 40% of pharmaceutical demand, 35% of automotive demand, and 30% of electronics demand domestically by the end of 2025. The country has also introduced tariff hikes of 30% and 25% on selected imports to shield local producers.

Capital Controls and Currency Management

Iran has implemented capital controls, monitoring capital outflows and devaluing the rial to make imports more expensive and encourage local production. The country has also built foreign-exchange reserves of $45 billion through barter trade in yuan and rubles, bypassing SWIFT sanctions.

Diversification of Trade Routes

Iran is developing new trade corridors, including the North-South Economic Corridor and the International North-South Transport Corridor (INSTC), to reduce dependence on vulnerable maritime routes. The country is also expanding Special Economic Zones (SEZs) in four provinces.

Knowledge-Economy Investments

Iran has earmarked $1.2 billion for investments in IT parks, fintech incubators, and domestic chip-design labs, aiming to create high-value export sectors that are less sensitive to sanctions.

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