Rising employment since Trump’s sanctions may not last
Earlier this month the Statistical Center of Iran (SCI) released the results of the latest quarterly labor force survey, which show employment continued to expand during fall 2019 (the third quarter of the Iranian year 1398). The data question the dire accounts of Iran’s economy that have appeared in western media, a point that I raised in a recent post in Project Syndicate and again this week in ResponsibleStatecraft.org (which has replaced Lobelog.com). However, there are reasons to believe that this positive trend is short-lived, that as excess capacity is used up and new investments fail to materialize, the economy takes a turn for the worse. Below, after presenting the new data, I discuss several challenges to employment if sanctions continue. Some of these challenges can be overcome by domestic reform, such as banking reform to enable the flow of credit to producers, but others are not under the control of the government, such as moving money internationally. (more…)
Rising employment casts doubt on IMF’s grim forecast for Iran’s economy
In October, the IMF downgraded its forecast of Iran’s economic growth for 2019 from -6 to -9.5 percent. The adjustment brought the IMF’s assessment of Iran’s economic performance closer to that of the World Bank (-8.7 percent) and is revising opinion regarding the ineffectiveness of sanctions in forcing Iran to renegotiate the 2015 nuclear deal. It has strengthened the hand of Iran foes who argue that sanctions are about to bear fruit and urge the Trump administration to stay the course and ignore appeals from Europeans to ease pressure on Iran.
The Financial Times, quoting an unnamed Iranian economist, added alarm to the downgrading by suggesting that Iran’s situation may be worse than it was during the Iran-Iraq war or the Anglo-Soviet occupation of Iran during World War 2. The idea that life in Iran is anything like the 1940s or the 1980s is nonsense, and the FT reporter who files her reports from Tehran can (but did not) attest to that. It is easy to dismiss this comparison as silly, but the dire predictions of sharp contraction by IMF and the World Bank for the year should be taken seriously. And by seriously I mean to ask why they are at odds with new employment data from Iran. (more…)
Is the Tehran Stock Exchange a good barometer of Iran’s economy?
The Tehran Stock Exchange (TSE) has been in the news lately, not because its 22-month downward slide has ended but because four cabinet members highlighted its plight in a letter to President Rouhani. The letter was written on September 9 but came to light last week. The brouhaha that followed, however, was not about the TSE and what its poor performance means for the economy, which appears to be heading for a double-dip recession. Attention has instead focused on division within Rouhani’s coalition government and what it means for the future of his austerity program. I wrote about these issues for Al Monitor last week; here I’d like to take a closer look at the performance of the TSE — how badly it has done, and why. (more…)
Iran’s economic recovery: the view from employment data
In my last post I examined if the quarterly growth in the GDP using data released by the Central Bank of Iran (CBI) that indicated a robust economic recovery during spring 2014. As promised, I will now review the most recent employment figures released by the Statistical Center of Iran (SCI). (more…)
What do job numbers say about economic recovery in Iran?
The most recent labor force survey (LFS) results for spring, 2014, that Iran’s Statistical Center released last week must be disappointing for Rouhani’s economics team. This survey, which is collected quarterly and is put out with remarkable speed, is the only official data that give us a sense of how the economy has been doing most recently. The short report shows job gains in agriculture (by 25%), which may be mostly seasonal, and services (by 2%), while industry lost jobs (by 1.3%). The fewer number of jobs in industry is disappointing because the main benefits of the agreement between Iran and the 5+1 signed last November were expected to come in industry. The employment picture that LFS paints for industry is not very complimentary for Rouhani’s first year in office. Industrial employment, according to LFS, has been declining since he took office a year ago. Last summer, more than 7.5 million workers were employed in industry, 9 months later fewer than 7 million are working there. Agriculture and services have also lost since then, though by less, for a total of one million jobs lost since he took office.
Reading Piketty in Tehran
If you are someone who pays attention to economic news and have not been hiding in a cave for the past few months, you must have heard of the famous book by the French economist Thomas Piketty, Capital in the Twenty-First Century. Since its translation was published in English earlier this year, it has sold more than half a million copies, which is astonishing for a book with many tables and charts (a publisher once told me that each chart cuts sales by 10% — there goes that bit of wisdom).
Last month people were also talking about Piletty’s book in Tehran, and this month’s Mehrnameh, published this week, has a section discussing it, including a short interview by yours truly. I must confess, as I did to the interviewer, that like most people who have bought the book, so far, I have only read the introduction (I have read, however, many of the book reviews — more pages of reviewes than of the book itself! Read an excellent early review by Branko Milanovic here). (more…)
Is Iran’s rate of unemployment really falling?
I have my doubts about the rate of unemployment — 10.3% — recently published by the Statistical Center of Iran (SCI) for fall 2013 (Iranian year 1392), so in a piece that I just published in Lobelog.com I opted to report a rate of 14% that I estimated myself from the SCI report. The difference between the published number and mine is, as in my previous post on unemployment, all in counting the reduction in the number of people in the labor force as discouraged workers and therefore unemployed in common parlance. (more…)
Rising unemployment and joblessness, 2006-2011
The performance of the outgoing Ahmadinejad administration is in large part tied to its record of job creation during his tenure. Just before the presidential election, Professor Masoud Nili of Sharif University, one of Iran’s most prominent economists, created a stir when he criticized, on national television, this record. His claim of near zero net new job creation between the census years of 2006 and 2011 was considered controversial but it should not have been because he was basically reading the numbers off the census tables. (more…)
Sounding the wrong school alarm in Iran
A series of articles published three weeks ago (Wednesday May 9, 2012) in Donyayeh Eghtesad (DE) reported on a “shockingly” large number of Iranian children who are “deprived of access to school”. Iran has very serious education problems, but lack of access to school is not one of them. The quality of education is poor and returns to formal schooling below the university level are low, prompting discouraged youth to leave schools after age 14 at alarming rates. At the same time, 99% of children are enrolled in school by age 7 and persist at a high rate until age 14 (first year of high school). This is when the realization sinks in that staying in school will not earn them a place in a good public university or the school officials tell them they are not fit for academic work and must choose between two losing options: vocational education or kardanesh. Why waste three more years of studying when the end result is a high school diploma that has not been of any value for several decades? Trying to get these kids to stay in school, as the articles in DE seem to prescribe, without doing something about job prospects after graduation serves no individual or social purpose. The problem for these kids is not lack of schools, or even boring classes: it is lack of purpose. The education system on its own cannot deal with this problem; it is a problem for the larger economic system.
Taking the surprise out of Iran’s low unemployment rate
The fact that after a long hiatus the Statistical Center of Iran (SCI) has decided to publish the results of its quarterly Labor Force Survey should be welcome news but instead it has been met with controversy and disbelief. The new report for summer 1390 (2011) shows a surprisingly low unemployment rate of 11.1%, down from 13.6% the same quarter a year ago. In the absence of data on the Gross Domestic Product (GDP) from the Central Bank in the last 3 years, analysts were hoping to find answers to questions about the economy’s health from unemployment data, but instead they were disappointed. Many reports, including one interview with a former SCI deputy director, dismissed the data as cooked. A closer look shows they are right to be skeptical of the lower unemployment rate, but not to question the survey’s veracity. Based on the published report I argue that the actual rate of unemployment maybe as much as 40% higher than what has been officially reported. (more…)
Tyranny of numbers 
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