In the name of Allah

2. In the name of Allah 2ndInternational E-Conference on Economy under Sanctions Dr. AbolfazlShahabadi E-Conference Scientific Chair Associate Professor, Faculty of Economics and Social Science, Bu-Ali Sina University, Hamedan, Iran 22 September 2014

3. ToroudShomal Research Company • For the second time, Toroud Shomal Research Company has established an international E-Conference on Economy under Sanctions to motivate other organizations and scientific societies to study the results of sanctions in an academic manner.

4. Acknowledgments I want to thank the professors, colleagues and reviewers for their remarkable efforts in collaboration with this conference and appreciate the scholars’ participation in the conference. With the help of their high quality research the conference aimed to the peak of success.

5. Conference Goals • Introducing the damaging effects of sanctions; • Scientific communication between Iranian and foreign researchers; • Present the scientific capabilities of the Islamic Republic of Iran; • Using the results of the conference

6. Theme and Sub-Theme • Explain the economic conditions of sanctioned countries; • From the perspective of macro-economic variables; • Explain the economic conditions under sanctions from the perspective of microeconomic variables; • The impact of sanctions on the production and trade of energy (oil, gas, etc.);

7. Theme and Sub-Theme • Economic sanctions and social variables (general health, health, Racism, Poverty, migration, food security, environment, Social Capital, etc.); • Economic sanctions and international politics and law (human rights, democracy, humanitarian aid, etc.); • Terms of economic sanctions and international monetary and financial systems;

8. Theme and Sub-Theme • The impact of sanctions on banking and international trade; • Economic sanctions and Doing business, entrepreneurship, SMEs; • The impact of international sanctions on international organizations and companies, FDI & FPI; • The nature and models of sanction; • Manage sanctions;

9. Theme and Sub-Theme • Typology of sanctions; • Sanctions and resistive economic; • Management of organizations in terms of sanctions; • Reduce the social and economic effects of sanctions; • Geneva agreement and its consequences • Military economy; • Resistive economic;

10. DefinitionsEconomic Sanctions • Sanction is manipulating the economic relations and cooperation to achieve political goals. In fact, sanction is a foreign policy instrument which allows the executer to oblige the targets, in line with political purposes. • Restrict freedom in foreign trade by prohibiting the trade of certain goods and the provisions of certain services

11. Economic Sanctions • Are ordered for foreign and security policy reasons against: • Legal and natural persons ("personal") • Countries ("country-specific") • Prohibition of any trade whatsoever with or for the benefit of the addressee • Full embargo

12. Three Types of Economic Sanctions 1. Financial sanctions – freezing of funds and other assets 2. Trade sanctions – products • Arms embargoes (e.g. military equipment, nuclear technology) • Other goods embargoes (oil of Iranian origin, "blood diamonds") • Dual-use items

13. Three types of economic sanctions 3. Trade sanctions – services • Prohibition of technical and financial aid • Investments • Prohibition of fulfillment of claims • Transport • Travel restrictions • Insurance

14. Evaluate Trade Sanction • Which one is worse? The sanctioned or the killer? Depends • If the sanctioned has low export supply elasticity or import demand elasticity, then it will get hurt dramatically due to the trade sanction; otherwise, it would not. • Now consider a case that the sanctioned has a high export supply elasticity • But the killer faces different import demand elasticity

15. What Factors Affect the Sanction’s Effect? • Trade openness: the smaller openness level, the less importance of international trade, the higher the elasticity is. • Characteristics of the importing products: luxury or necessity? • Duration of the Sanction: the longer the sanction, the smaller the impact is. • Sanction Coverage: the more the countries’ participation, the larger the impact is.

16. Categories Economies of the World Knowledge Based Economics • Endogenous economic growth and export-oriented • Economic growth is primarily a function of natural comparative advantage and acquired • The main weight of products the function of (human capital, innovation, R&D, R&D Spillover, entrepreneurship, ICT, etc)

17. Categories Economies of the World Resource-Based Economy • Exogenous growth and Fluctuations in economic growth • Economic growth is mainlya function of natural comparative advantage • Production is mainly a function of traditional factors of production(Labor, physical capital and natural resources) and imports of intermediate goods and capital • Low demand for factors(human capital, innovation, R&D, R&D Spillover, entrepreneurship, ICT)

18. Categories Economies of the World Investment-Driven Economy • Exogenous growth and Fluctuations in economic growth • Mainly based on natural comparative advantage and comparative advantage Imported • Reliance on technology imports • Low Competitiveness • Low participation in the global economy • Low per capita income

19. The Reasons for the Absence of Expansion of New Production Factor Markets • Lack of scientific management • Lack of understanding the economic structures • Lack of economic strategyconsistent with the economic structure • Non-optimal allocation of resources • Macroeconomic policy inconsistency

20. Picture Brief of the Economy of the Islamic Republic of Iran • With the abundance of natural resources and oil wealth • Frequency of human capital and many young workers • Science and technology upgrades in some fields • Expanded relationships with emerging economies (BRICS) • Significant infrastructure • Geopolitical importance and … • on the one hand

21. Picture Brief of the Economy of the Islamic Republic of Iran • Exogenous growth and Fluctuations in economic growth • Oil- Dependent Economy • Low share of intangible assets in total assets • Low per capita income compared with developed countries • Low hi-tech exports • High Unemployment • High inflation rates

22. Picture Brief of the Economy of the Islamic Republic of Iran • High share of service sector in GDP during development plans • Reduce the share of oil and agriculture in GDP during development plans • Dependence of economic activities to import • Low Competitiveness • Low participation in the global economy and … • On the other hand

23. Suggestions For the following purposes • Increasing share of productivity growth in the economic growth • Sustained economic growth and sustainable • Control inflation • Increased capital accumulation (physical, human, social, foreign, natural and financial) • Less use of natural comparative advantage and a strong emphasis on acquired comparative advantage

24. Suggestions For the following purposes • Reduce unemployment • Balanced distribution of income and wealth • Expansion of the balance of payments • Increasing the competitiveness • Reduce dependence on oil exports • Modify consumption patterns • And …

25. Suggestions It is necessary • Scientific Management • Economic reform through the coordination of macroeconomic policies (monetary, financial, foreign exchange and trade) to the policies innovation, entrepreneurship, education and research and technology) • More interaction with regional organizations such as D8, G77, Shanghai cooperation organisation, OPEC and …

26. Suggestions • More interaction with neighbors • Relations with emerging economies • Enable foreign policy to facilitate trade and investment

27. The End