Transcript Table 1:ratio of exports to gross domestic product iran & OECD

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Challenges and opportunities non-oil export from the point of knowledge
components: Approach to Confronting with economic sanctions
Abolfazl Shahabadi
Associatet Professor, Department of Economics, Faculty of Economics and Social Science,
Bu-Ali Sina Universtiy, Hamedan, Iran, [email protected]
Soheila Mirzababazadeh
Faculty member of payame nor university, Address: Azarbaijan-e-sharghi, sarab, payame nor
university-sarab
Amir Lalisarabi
Faculty member of payame nor university, Address: Azarbaijan-e-sharghi, sarab, payamenor
university-sarab
1
Research purpose
-Export is very important factor in economical growth and consequently in increasing
welfare of countries.
-Research and development activities are the main factors of economical growth and
prosperity that lead to the innovation and thereby lead to the improvement of quality,
variety of goods and services and also reduction of production costs.
-Petroleum export does not considerably reflect relative effort, planning and our
scientific and economical position toward the world and this is considered as a exogenous
fact, thus it's necessary to consider the amount of non-oil exports, the way of its change,
composition exportation, technology degree of exportation and changes in these factors
over time.
-Therefore, aim of the present study is to examine non-oil export challenges and
opportunities from knowledge components standpoint with the approach of dealing with
economical boycott during 1970-2010 period.
2
Experimental results:
-Foreign studie: according to foreign studies, the accumulation of inland research and
development, the accumulation of foreign research and development, foreign direct
investment, human capital, global income and exchange rate are known as the most
important export determinant factors.
-Inland studies: according to these studies exchange rate, inflation rate, global imports,
gross domestic product, imports, exchange rate and labor productivity are known as the
determinant factors of exports.
3
-Gross domestic product of Iran is nearly twice as much as the smallest country with
the organization for economic cooperation and development (New Zealand). Of course,
major part of gross domestic products of Iran economy is from direct and indirect effects
of petroleum which indicates to remarkable gap between the actual capacity of Iran
economy with the potential and actual capacity of global economy.
-During this period, the highest per capita gross domecapita stic product belongs to
Switzerland, America and Japan and Greece has the least per gross domestic products
among the studied countries.
-The average of per capita gross domestic product of seven group countries has been 23544$
during this period.
-Per capita gross domestic product were respectively 1874, 1346 and 1478 in Iran during 70th,
80th and 90th and it was 1802 in the first decade of the recent century.
-The average of per capita gross domestic product in Iran has been 1598 during this period
that is one-sixth of per capita gross domestic product of Greece that is the smallest
economical number of the organization for economic cooperation and development.
High level of per capita income in the organization for economic cooperation and
development compared to results from economic dynamics and attention to new
production factors and creating relative acquisitional advantages and reducing the role of
advantage in the economy of countries with the organization for economic cooperation
and development. However, a remarkable portion of per capita of Iran economy is earned
from petroleum selling that is natural wealth and natural relative advantage and has not
been derived from endogenous factors.
4
Data analysis
-The ratio of exports to gross domestic product of Iran economy (1970-2010 period) is nearly 0.27.
-The high ratio of exports to gross domestic product for Iran economy is apparently advantageous but
since the main exportable goods is petroleum, not only it is not advantageous but it is also a weak
point.
-The ratio of exports to gross domestic product for Iran economy has strong fluctuations (due to strong
fluctuations in petroleum price and economical sanctions). In the 70th, 80th and 90th decades of 20th
century AD. These ratios are respectively 43, 17, and 25 and this ratio is 21 for the first decade of the
recent century.
-During this period (1970-2010) the ratio of exports to gross domestic product for seven group countries is
nearly 11percent (that is mainly industrial exports and is related to endogenous factors, meanwhile its
fluctuations are negligible).
-For 70th, 80th and 90th AD. Centuries the ratio of exports to gross domestic product for seven group
countries are respectively 8, 7, 10, 14.2 and this ratio is 17.9 percent for the new century.
-The average ratio of non-oil exports of Iran to gross domestic product is 2.7 percent during the studied
period.
-More than one –third of gross domestic product in countries with the organization for economic
cooperation and development belongs to American economy and New Zealand has the least share of
gross domestic product in countries with the organization for economic cooperation and
development among the examined countries.
5
-Increasing the competitiveness power and exports development of each country depends
on technical and industrial progress and this is done in the light of natural research and
development activities and international research and development overflow through
goods imports.
-Industrial countries undergo large position of research and development costs and
countries with the organization for economic cooperation and development undergo
more than 90 percent of these costs in industrial world. Surely. High concentration of
research and development in this countries leads to technology progress, improvement
of new production process and also improvement of products quality.
-Nearly half of domestic research and development capital of countries with the
organization for economic cooperation and development belongs to America,
approximately 0.93 of domestic research and development capital of centuries with the
organization for economic cooperation and development belongs to seven group
countries and the remaining 0.7 belongs to members other than seven group
6
-Nearly 1 to 5 percent of gross domestic product are spent to research and development
costs, however this amount 2 to 3 percent at the developed countries with the
organization for economic cooperation and development.
-Is it possible to be successful by allocating small percentage of gross domestic product to
research and development to fill deep gap of technology and increase competitiveness
power of Iran economy in order to develop non-oil exports and society welfare?
-According to the new theories of international economy it's possible to transfer bulk of
trade partners' research and development capital of to the country and this can result in
increasing competitiveness power and consequently exports growth of the country.
7
-Global experience shows that one of the appropriate ways to fill the deep technology gap is
the overflow of crystallized technology in imports of intermediate and capital goods.
-During the studied period (1970-2010) the average share of goods imports of Iran economy
from countries with the organization for economic cooperation and development and
group seven have been respectively 65 and 50 percent.
-The highest goods imports share in Iran economy belongs to Germany (Germany is Iran's
most important trading partner) and among countries with the organization for
economic cooperation and development Portugal has the least share in supplying goods
imports in Iran economy.
-During the studied period more than half of Iran imports is from countries with the
organization for economic cooperation and development that more than 0.90 of research
and development costs in the world and large portion of world income belong to these
countries.
-In general, after the Islamic Revolution, there has been attempt to change trade partners'
composition, so we can see decline in goods imports from developed countries.
-Nowadays, large portion of Iran's imports is from countries with the organization for
economic cooperation and development that have high research and development capital
stock. Consequently, attraction and institutionalization of crystallized technology is
possible through purposeful imports of intermediate and capital goods.
8
Table 1:ratio of exports to gross domestic product iran & OECD countries
Canada
England
Italy
French
Germany
Japan
America
1971-1980
22.3
16.8
15.6
13.6
14.8
6.2
5.2
1981-1990
25.0
18.9
18.1
16.3
19.1
8.2
6.2
1991-2000
37.8
24.2
24.6
22.9
26.1
9.3
9.8
2001-2010
42.6
27.8
25.6
28.6
37.4
11.5
10.3
1971-2010
29.6
20.8
19.5
18.5
21.5
8.6
7.3
1981-2010
31.9
21.7
21.2
20.3
24.0
8.8
8.1
1991-2010
36.6
23.5
23.2
22.9
27.3
9.3
9.3
Australia
Austria
Belgium
Denmark
Finland
Greece
Ireland
1971-1980
10.9
23.5
50.3
21.9
19.0
9.6
25.8
1981-1990
12.9
30.3
58.7
29.7
21.7
14.2
39.6
1991-2000
19.6
37.6
74.3
38.9
32.1
18.5
71.6
2001-2010
20.6
50.3
85.9
48.7
42.8
21.6
98.8
1971-2010
14.9
32
62.3
31.6
25.7
14.6
50.7
1981-2010
16.3
35.2
66.9
35.2
28.4
16.5
60.3
1991-2010
18.6
38.5
72.5
38.9
32.8
18.1
74.1
9
New
Zealand
Portugal
Holland
Norway
Spain
Sweden
Switzerland
1971-1980
19.2
37.0
42.9
10.3
10.0
20.5
24.7
1981-1990
24.0
43.7
50.9
13.3
14.8
25.2
31.8
1991-2000
32.4
58.5
65.9
18.0
22.6
35.7
37.8
2001-2010
35.7
72.1
70.8
20.3
29.1
46.8
45.7
1971-2010
25.8
48.0
53.7
14.2
17.0
28.7
32.3
1981-2010
28.3
52.4
58.0
15.7
19.6
31.8
35.2
1991-2010
31.1
58.3
62.8
17.4
22.8
36.3
37.4
OECD
Group 7
1971-1980
10.9
8.8
1981-1990
13.0
1991-2000
group
Non- seven
Iran (total)
Iran (non-oil)
23
43.2
1.5
10.7
28
17.2
1.0
17.7
14.2
38
25.3
4.6
2001-2010
21.1
17.8
46
21.7
3.8
1971-2010
14.8
11.0
32
27.1
2.7
1981-2010
16.3
12.5
35
20.5
3.0
1991-2010
18.6
13.8
40
22.7
4.3
Sourse:WDI
10
Table 2. Gross domestic product share in every countries with OECD
Canada
England
Italy
French
Germany
Japan
America
1971-1980
2.88
6.75
5.12
6.09
9.02
19.23
37.16
1981-1990
2.93
6.16
5.13
5.94
8.31
20.87
37.71
1991-2000
2.82
5.92
4.76
5.59
8.23
21.07
38.95
2001-2010
3.04
6.12
4.46
5.50
7.69
18.98
41.07
1971-2010
2.97
6.27
4.92
5.83
8.38
20.15
38.4
1981-2010
2.91
6.06
4.85
5.71
8.15
20.58
38.88
1991-2010
2.90
5.99
4.66
5.56
8.05
20.38
39.65
Ireland
Greece
Finland
Denmark
Belgium
Austria
Australia
1971-1980
0.23
0.60
0.53
0.82
1.11
0.87
1.51
1981-1990
0.25
0.53
0.55
0.72
1.03
0.82
1.52
1991-2000
0.31
0.47
0.48
0.67
0.98
0.81
1.60
2001-2010
0.45
0.52
0.51
0.65
0.96
0.80
1.75
1971-2010
0.30
0.54
0.51
0.73
1.04
0.84
1.58
1981-2010
0.31
0.51
0.51
0.69
1.00
0.81
1.60
1991-2010
0.36
0.49
0.49
0.66
0.97
0.81
1.65
11
Switzerland
Sweden
Spain
Norway
Portugal
Holland
New Zealand
1971-1980
1.40
1.22
2.45
0.61
0.42
1.72
0.27
1981-1990
1.21
1.11
2.31
0.65
0.43
1.57
0.24
1991-2000
1.08
1.00
2.34
0.68
0.46
1.57
0.22
2001-2010
1.00
1.01
2.52
0.70
0.46
1.57
0.23
1971-2010
1.20
1.10
2.39
0.66
0.44
1.61
0.24
1981-2010
1.12
1.05
2.36
0.67
0.45
1.57
0.23
1991-2010
1.05
1.00
2.40
0.68
0.46
1.57
0.22
group
Non- seven
Iran to
Canada
Iran to New Zealand
OECD
Group 7
1971-1980
100
86
14
7.76
194
1981-1990
100
87
13
18.14
167
1991-2000
100
87
13
13.62
191
2001-2010
100
87
13
14.72
200
1971-2010
100
87
13
16.06
184
1981-2010
100
87
13
13.93
182
1991-2010
100
87
13
15.60
193
Sourse:WDI
12
Table 3.Capita gross domestic product of OECD countries and Iran
Canada
England
1971-1980
15073
14583
1981-1990
17989
1991-2000
Italy
French
Germany
11260
14055
13980
20949
20794
17478
14590
17258
17083
27862
25404
20255
21477
17687
20404
21320
35428
30788
2001-2010
24222
25903
19498
23118
23509
37558
35637
1971-2010
18695
18998
15224
18081
18325
29435
270888
1981-2010
20142
20762
16810
19688
20063
32828
29604
1991-2010
21577
22952
18290
21308
22050
36138
32404
Finland
Denmark
Austria
Australia
Belgium
Japan
America
Ireland
Greece
1971-1980
8684
7910
13565
19552
13827
14027
13176
1981-1990
11251
8607
17963
22620
16812
17469
15395
1991-2000
18338
9432
19849
26887
20406
21657
18595
2001-2010
28268
11891
24573
30577
23274
24757
22257
1971-2010
14974
9114
18190
24099
17910
18724
16657
1981-2010
17489
9594
20039
25918
19542
20602
18047
1991-2010
21648
10252
21424
28117
21362
22691
19815
13
Switzerland
Norway
Sweden
Spain
Portugal
Holland
New Zealand
1971-1980
26545
18047
8332
8162
12835
15267
10737
1981-1990
29959
21375
9690
10559
16733
17322
11620
1991-2000
32354
23974
12524
14259
22079
21478
12500
2001-2010
34327
28601
15165
16978
25289
24409
14782
1971-2010
30294
22195
10895
11849
18369
18932
12071
1981-2010
31791
23860
11919
13323
20583
20402
12604
1991-2010
33012
25516
13405
15165
23149
22455
13261
OECD
iran
G7
nog7
1971-1980
16691
1874
17015
12502
1981-1990
20779
1346
21590
14665
1991-2000
25566
1478
26788
17876
2001-2010
29090
1802
31006
20891
1971-2010
22165
1598
23544
15704
1981-2010
24356
14.45
25957
17040
1991-2010
26741
15.00
28525
18737
Sourse:WDI
14
Table 4. OECD domestic research and development capital and Iran
Canada
England
Italy
French
Germany
Japan
America
1971-1980
0.92
10.85
1.60
6.12
8.43
13.13
51.90
1981-1990
1.05
8.27
1.77
5.57
9.32
18.08
49.09
1991-2000
1.58
5.97
2.00
5.24
8.85
23.21
45.32
2001-2010
1.97
5.25
2.03
5.15
8.38
23.95
44.66
1971-2010
1.3
7.93
1.82
5.58
8.88
18.96
48.19
1981-2010
1.44
6.74
1.91
5.36
8.95
21.30
46.69
1991-2010
1.71
5.73
2.01
5.21
8.70
23.46
45.10
Greece
Finland
Denmark
Ireland
Belgium
Austria
Australia
1971-1980
0.04
0.01
0.15
0.29
0.74
0.25
0.17
1981-1990
0.06
0.02
0.22
0.30
0.76
0.33
0.26
1991-2000
0.10
0.07
0.41
0.43
0.78
0.48
0.65
2001-2010
0.15
0.10
0.54
0.53
0.80
0.57
0.90
1971-2010
0.08
0.04
0.30
0.37
0.77
0.38
0.44
1981-2010
0.09
0.05
0.36
0.40
0.78
0.44
0.54
1991-2010
0.12
0.08
0.45
0.46
0.79
0.51
0.73
15
Switzerland
Sweden
Spain
1971-1980
2.15
0.81
0.19
1981-1990
1.61
1.05
1991-2000
1.32
2001-2010
Norway
Portugal
Holland
New Zealand
0.21
0.03
1.97
0.04
0.31
0.29
0.03
1.58
0.04
1.34
0.61
0.28
0.16
1.11
0.10
1.21
1.49
0.79
0.25
0.24
0.90
0.14
1971-2010
1.63
1.14
0.47
0.25
0.11
1.46
0.08
1981-2010
1.41
1.25
0.53
0.28
0.12
1.26
0.08
1991-2010
1.28
1.39
0.67
0.27
0.19
1.04
0.11
OECD‫ا‬
G7
nog7
1971-1980
100
93
7
1.95
1116
1981-1990
100
93
7
6.05
269
1991-2000
100
92
8
3.84
63
2001-2010
100
91
9
2.50
47
1971-2010
100
93
7
2.52
432
1981-2010
100
96
4
3.42
146
1991-2010
100
92
8
3.82
58
Iran to Canada
Iran to Greece
Sourse:WDI
16
Table 5. Share of Iran imports from OECD
Canada
England
Italy
French
Germany
Japan
America
1971-1980
0.8
10.3
5.6
6.0
20.9
18.7
18.4
1981-1990
2.2
8.8
8.0
2.8
26.2
17.2
1.1
1991-2000
4.7
6.0
11.0
6.8
25.0
12.3
2.7
2001-2010
2.1
6.9
12.3
15.1
24.3
7.6
0.5
1971-2010
2.6
8.2
8.8
6.5
24.1
14.7
6.4
1981-2010
3.2
7.3
10.0
6.8
25.3
13.3
1.7
1991-2010
3.8
6.3
11.4
9.6
24.8
10.7
2.0
Ireland
Greece
Finland
Denmark
1971-1980
0.1
1981-1990
Belgium
Austria
Australia
0.3
1.3
0.9
2.9
1.6
1.8
0.4
0.3
0.8
1.4
4.9
2.8
5.7
1991-2000
0.3
0.1
1.0
1.0
7.0
3.2
4.0
2001-2010
0.5
0.1
1.1
0.9
4.0
2.8
2.5
1971-2010
0.3
0.2
1.1
1.1
4.9
2.6
3.7
1981-2010
0.4
0.2
1.0
1.1
5.6
2.9
4.4
1991-2010
0.4
0.1
1.0
1.0
6.0
3.1
3.5
17
Switzerland
Sweden
Spain
Norway
Portugal
Holland
New Zealand
1971-1980
3.3
1.8
1.4
0.2
0.0
3.2
0.5
1981-1990
4.5
3.4
2.8
0.2
0.1
4.1
2.2
1991-2000
5.0
2.3
3.1
0.1
0.2
3.5
0.6
2001-2010
8.2
4.5
2.8
0.2
0.2
3.2
0.2
1971-2010
4.8
2.6
2.5
0.2
0.1
3.6
1.0
1981-2010
5.5
3.2
2.9
0.2
0.1
3.7
1.2
1991-2010
6.1
3.0
3.0
0.1
0.2
3.4
0.5
OECD
Imports from 21 countries to overall
imports
Imports from group
seven
1971-1980
100
0.76
0.62
1981-1990
100
0.68
0.45
1991-2000
100
0.62
0.42
2001-2010
100
0.50
0.35
1971-2010
100
0.65
0.50
1981-2010
100
0.62
0.47
1991-2010
100
0.57
0.41
18
Opportunities
-Abundance of rich underground resources and considerable petroleum income
-Ratio of employed specialists is growing compared to overall employers of Iran economy
-Geopolitical situation and the existence of regional markets to exports development to deal
with economic sanction
Very high potential 
19
Challenges
-Supply-driven components of knowledge based economy (research and development,
human capital and so on) resulting from relative price deviation because of adopting
wrong economical policies
-Significant gap between goods supply and demand (demand excess) because of population
explosion, information explosion, explosion of financial and monetary expansionary
policies and expectations
-Low elasticity of domestic production supply and exports of Iran economy
-Change in trade partners' composition from developed countries to developing countries
after Islamic Revolution
-The deep gap between Iran economy technology and world economy and as a result
traditional nature of exports composition
-High dependence of industrial products exports to imports technology (Petrochemical)
Lowness of ratio of research and development costs to added value of Iran economy
-Lack of incentives of private sector to do research and development activities due to lack of
profitability
-Dependency of exports of industrial products to various subsidies
20
-Adopting wrong economical policies (monetary, financial, exchange and trade) which lead
to the deviation of factors relative price in favor of using physical capital and exports
technology and to the detriment of other production factors
-High amount of oil revenues in exports of the country
-Lack of proper and purposeful planning in order to uptake bulk of foreign research and
development from imports channel
-Lack of success in FDI attract compared to most of the countries as China and Malaysia
Expensiveness of production inputs needed to knowledge based economy and cheapness 
of production inputs needed to resource and capital based economy due to wrong
economical policies
21
Viewpoint: while continuity of the existent condition
-Fluctuation in non-oil growth rate of Iran economy compared to other countries
-Lowness of non-oil exports role and share, particularly exportation with high technology in
Iran economy
-Increasing deep technology gap and strong dependency of Iran economy activities to
import technologies and raw material, intermediate and capital goods
-Lack of private sector tendency to do research and development activities and human
capital
-of competitiveness power due to lowness of exportable goods and services quality in Iran on
one side and highness of cost of exportable goods and services compared to developed
countries on the other hand due to adopting wrong economical policies that lead to the
deviation of inputs relative price
-High dependency of economical structure, exports and budget of government to oil exports
derived incomes
-Lowness of competitiveness power and challenge in accession to WTO
22
Viewpoint: appropriate choice
-Reducing economical dependency of country to non-renewable wealth to deal with
economical sanctions
-Converting non-renewable wealth to renewable ones
-Expanding market of knowledge-based economy components (human capital, research and
development, …)
-Increasing non-oil exports share in country economy to deal with economical sanction
-Increasing exports share dependent on research and development activities and knowledge.
-Expanding innovation using basic and applied research to fill deep technology gap
-Attracting bulk of foreign research and development through intermediate and capital
goods imports
-Increasing competitiveness power and ability to adapt with supply and demand changes to
deal with economical sanction
-Increasing knowledge management role, resource management, futurist technology and
electronic training in Iran economy
-Decreasing government incumbencies and serious and principled support of private sector
investment in order to explain Article 44 of Constitution
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-In order to decrease deep technological gap the following steps are essential: moving from
resource-based and capital-based economy toward knowledge-based economy,
increasing competitiveness power in order to fulfill goals of twenty-year viewpoint
document, diversifying non-oil exports and seriously addressing any type of economical
sanctions
-Coordination between macroeconomic policies and research and educational activities
more advantageous
-Overall emphasis on research and development activities in order to diversify expands to
create interdependence
-Correct selection of trade partners and improvement of country's ability in attracting and
localizing foreign research and development capital
-Provision of economical infrastructures (such as creating stability in macroeconomic,
creating competitive environment in Iran economy, focusing on IT and ICT, improving
capital system) based on knowledge
-Protection of foreign direct investments with new knowledge attraction intention, new
management, day technology and financing
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