Strategies to Overcome the Losses and Risks of the “Neither War nor Peace” Situation

In a note, Abolfazl Roghani emphasized that economic growth requires a serious review of policies, structural reforms, and strengthening of economic diplomacy.

 

The Fragile State of Iranian Industry

 

Today, Iran’s industrial sector is in a fragile condition where economic stability and long-term strategic policymaking are absent from its growth and revitalization. This purgatory-like state of industry and trade has pushed economic actors away from focusing on innovation and competitiveness, forcing them instead toward conservatism and merely maintaining the status quo. As a result, opportunities for technological growth and development have significantly declined, and the country’s key industries have fallen into stagnation. To escape this crisis, it is necessary to revise industrial policies and, by creating stable economic conditions, support investment and innovation.

 

The Deadlock of Iranian Industry in a “Neither War nor Peace” State

 

Complex regional developments and the absence of clear strategies have trapped Iranian industry in a cycle of uncertainty. The lack of active economic diplomacy and weak coordination between decision-making institutions have created conditions that have led to stagnation in production and trade, while discouraging economic players. Instead of acting as the engine of economic growth, industries have reached a point where survival and risk management have become their top priorities.

 

At the same time, industrial infrastructure has become outdated, and inefficient laws and regulations have made the business environment even more difficult. While regional competitors have expanded their export routes by using economic diplomacy, Iranian industries—due to policy instability and lack of targeted support—face serious risks.

 

Major Challenges Facing Iranian Industry

 

Lack of Foreign Investment and Technological Restrictions

Sanctions and political uncertainty have made investing in Iran highly risky. This has not only limited the inflow of foreign capital but has also severely reduced the transfer of modern technologies and know-how to industries. Without these technologies, the technological gap between Iran and global competitors deepens, reducing industrial competitiveness.

 

Energy Imbalances: The Main Barrier to Production

Despite abundant oil and gas resources, industries face shortages of electricity and gas. Frequent blackouts and gas supply restrictions in winter have led to production halts and reduced capacity. Replacement energy costs and worn-out infrastructure have lowered efficiency and severely weakened competitiveness.

 

Financial Pressure and Limited Credit Resources

High bank interest rates and structural banking problems have made industrial financing difficult. Meanwhile, capital market fluctuations and lack of trust in economic policies have reduced productive investments, creating serious liquidity challenges for production and development.

 

Economic Recession and Declining Demand

High inflation and reduced purchasing power have sharply decreased domestic demand for industrial products. In addition, reduced government investment in infrastructure projects has weakened the demand chain for many industries. This has led to stockpiling, reduced production, and rising unemployment in the industrial sector.

 

Customs Bureaucracy and Trade Barriers

Lengthy and complex customs procedures, high tariffs, and lack of transparency have increased production costs, reducing competitiveness in domestic and international markets. Corruption and rent-seeking in customs processes have not only imposed economic costs but also damaged public trust in governance.

 

Industry Under Crisis

 

Small and medium-sized industries have suffered the most, with many facing closures and reduced production.

Large industries, despite greater capacity, are struggling with energy shortages, financial problems, and currency fluctuations, leading to reduced production and halted expansion.

 

Industries with comparative advantages such as steel and petrochemicals, due to dependence on export markets, face significant challenges under adverse political and economic conditions.

 

Knowledge-based industries and startups, due to limited access to financial and technological resources, have been unable to realize their potential.

 

Solutions and Future Outlook

 

To break free from this complex deadlock, industrial policy must be redefined with a comprehensive and long-term approach:

 

Strengthening economic diplomacy and opening export channels: Trade policies must be transparent, targeted, and aligned with regional and global capacities to prevent the loss of export opportunities.

 

Reforming the energy structure and optimizing consumption: Investment in improving energy infrastructure, developing sustainable resources, and increasing efficiency is unavoidable.

 

Facilitating access to financial resources: Reducing interest rates, developing the capital market, and creating special financial support mechanisms for industries must be prioritized.

 

Reforming bureaucracy and ensuring regulatory transparency: Reducing administrative and customs complexities and taking serious action against corruption can improve the business environment.

 

Supporting innovation and knowledge-based industries: Facilitating access to technology and financial resources for startups and innovative industries will pave the way for sustainable development.

 

Strengthening cooperation between the private sector and government: Establishing joint institutions and production-support mechanisms, rebuilding trust, and implementing coordinated policies will create the foundation for industrial growth.

 

Conclusion

 

The current state of Iranian industry is the result of a combination of domestic and external challenges. Simultaneous with political and economic uncertainty, growth opportunities have been limited. Nevertheless, overcoming these unfavorable conditions is possible only through a serious revision of policies, structural reforms, and strengthening of economic diplomacy. Creating stable foundations for investment, innovation, and production is the key to reviving the country’s industrial position and ensuring a better future for Iran’s economy.