Resistance is simple, resilience is complex: sanctions and the composition of Iranian trade

What the paper says

This paper challenges the conventional wisdom that the multilateral and unilateral sanctions imposed on Iran since 2008 have isolated it from the global economy. Multilateral sanctions did slow many of its economic processes associated with globalization, particularly attraction of foreign investment and technology. As relations with the West worsened, Iranian officials adopted the rhetoric of a ‘resistance economy’, leading many analysts to believe that their economic doctrine was diametrically opposed to globalization, rejecting the world in response to the world’s rejection of Iran. However, an analysis of trade data for 2009–2018 makes clear that rather than reject globalization outright, Iranian economic actors responded to sanctions pressure with strategic and conditioned choices around geography and product that made the composition of trade more complex. In turn, the emergence of greater geographic and product complexity made the economy more resilient to sanctions pressure, with the continued flow of critical imports and exports enabling the manufacturing sector to sustain production and employment. That Iran achieved economic resilience in the face of sanctions through greater, not less, engagement with the global economy indicates important opportunities for future economic diplomacy.