Fact Check: Have Sanctions Shifted Iran to a Knowledge-Based Economy?

The Supreme Leader has falsely claimed that Iran’s technological, scientific and industrial achievements have soared since sanctions were imposed on the Islamic Republic, IranWire research has revealed. 

But don’t take his word for it, he says. These are observations from UNESCO, the UN’s Educational, Scientific and Cultural Organization, which has recognized the Islamic Republic’s accomplishments and progress, according to the Leader.

“Sanctions on Iran ‘have accelerated the shift from a resource-based economy to a knowledge economy.’ These are not our words. This is what the UNESCO report admits about Iran’s progress in science, industry, and technology,” the Supreme Leader posted on Twitter on February 8, 2020.

 

As proof that UNESCO made these claims, Khamenei urged his followers to read further, and the same tweet provides a link to an article on his official website entitled “Industry in Iran after the Islamic Revolution: Behind or Highly Advanced?” He also tweeted a chart that appears in the article. 

The article and its supporting chart make the following claims about Iran’s industrial output before and after the 1979 Islamic Revolution:

- Steel: from 1,300 thousand tons in 1977 to 24,520 thousand tons in 2018, a 19-fold increase that ranks 10th in the world

- Cement: from 2 million tons in 1964 to 50 million tons in 2018, a 25-fold increase, ranking 11th in the world

- Aluminum: from 21 thousand tons in 1977 to 355 thousand tons in 2017, a 17-fold increase and ranking 21st in the world

- Copper: from 7 thousand tons in 1977 to 245 thousand tons in 2015, a 35-fold increase and ranking 13th in the world

- Electricity: from 2,300 gigawatts per hour in 1964 to 312 thousand gigawatts per hour in 2018, ranking 16th in the world and the cheapest electricity in the world for consumers

 

The article then concludes that:

- “Despite the unprecedented economic sanctions... the country has made dramatic advances in industry since the establishment of the Islamic Revolution” and is now one of “the top 10 countries in the world” in terms of key industries.

- “Contrary to the Pahlavi regime's approach, highly dependent on imports and oil revenues to supply the country's needs,” Iran has now “become a supplier and exporter instead of an importer and consumer.”

 

What is the veracity of Khamenei’s claim about UNESCO? Did the UN agency really said that Iran’s economy has shifted “from a resource-based economy to a knowledge economy?” Has Iran’s industrial growth since the 1979 revolution been really impressive? Is Iran one of the top 10 countries in the world in the production of steel, cement, aluminum, copper and electricity? IranWire examines internationally-produced data in the public domain.

 

UNESCO’s Report and Khamenei’s Claim

IranWire’s research reveals that UNESCO has never made such a claim in any of its official reports. Instead, IranWire identified an article entitled “Iran in pursuit of a knowledge economy,” which was published on the agency’s website in May 2017. The government of Iran, the article says, has “set its sights on moving from a resource-based economy to one based on knowledge in its 20-year development plan, Vision 2025, adopted in 2005.” In no way does the article confirm that Iran has already shifted to a knowledge-based economy. On the subject of sanctions and the future plans for Iran’s economy it says: “The increasingly tough sanctions regime oriented the Iranian economy towards the domestic market and, by erecting barriers to foreign imports, encouraged knowledge-based enterprises to localize production.”

The report says “oriented towards” and “encouraged” — not “achieved” or “has shifted.”

 

Is the Iranian Economy Knowledge-based?

According to the indices published by Knoema’s World Data Atlas, Iran ranks 93rd among 140 countries in the world in terms of knowledge-based economies, meaning even lower than countries such as the Philippines (92), Paraguay (90), El Salvador (87), Azerbaijan (78), Lebanon (79), and Saudi Arabia (50).

The colored map of where countries stand in regard to a knowledge-based economy shows that Iran is in a situation similar to countries in the Middle East, Africa and Central Asia:

 

 

Is Iran among the 10 top countries in the world when it comes to the production of steel, cement, aluminum, copper and electricity?

Steel:

The report by the World Steel Association for 2019 shows that in 2017 Iran ranked 13th in the world, producing 21.2 million tons, and 11th in 2018, when it produced 24.5 million tons.

 

In fact, the numbers show that Iran has exported more steel than it has used domestically. In other words, steel is used more as a resource-based source of income than it has been used to industrialize the country. As the chart below shows, Iran does not appear on the list of countries with the highest rate of using steel for their own industries:

 

The fact that, according to Khamenei’s website, steel production in Iran rose from 1,300 thousand tons in 1977 to 24,520 thousand tons in 2018 is not a spectacular event since generally, global steel production also increased at the same rate in approximately the same period. The total global production of steel was 506.9 million tons in 1975 and 1,686.7 million tons in 2018. The following chart illustrates the growth in global steel production from 1975 to 2018:

 

 

Cement:

No Iranian company name appears on the top 10 list of major cement-producing companies in the world, published by the World Cement Association:

 

 

Furthermore, Statista, the online portal for statistics, does not place Iran among the world’s top 10 cement producers. Its data shows that in 2018 Iran ranked 11th in the world, with the production of 50 million tons of cement, whereas in 2014 the country was able to produce 65 million tons. In other words, in the first two years of President Rouhani’s administration — when sanctions on the country were eased — Iran produced 15 million tons more cement that it managed to produce in 2018:

 

 

Aluminum:

Statistics published by the Index Mundi data portal shows that Iran ranked 21st in the world of aluminum producers, producing 355 thousand tons of aluminum per year:

 

 

On one occasion, in 2013, Iran ranked 20th in the world with the same volume of production, but since then its volume of aluminum production has not increased. In 2013, Iran produced 355 thousand tons of aluminum, while the neighboring Bahrain ranked 10th, with 889 thousand tons, as the graph shows.

In 2018 Bahrain increased its aluminum production to one million tons and its rank went from 10th to 8th, but from 2013 to 2018 Iran’s production stagnated and fell to 21st in global ranking.

 

 

The article on the Supreme Leader’s website lauds the rise in Iran’s aluminum production as a significant achievement, a rise from 21 thousand tons in 1977 to 355 thousand tons in 2017. Yet Australia increased its production from 20 thousand tons in 1963 to 1.866 million tons in 2013.

 

 

Copper:

According to Knoema’s statistics, Iran produced 222 thousand tons of copper in 2013, whereas in 2009 it produced 262 thousand tons and ranked 13th in the world. So in four years, not only did the production of copper not rise, it fell by 40 thousand tons. In 2013 Iran ranked 15th in copper production in the world.

According to the report “World Mineral Production 2013-2017,” prepared by the British Geological Survey, copper production in Iran picked up again in 2017 and reached 295 thousand tons. But not only did Iran’s ranking not rise, it fell one rung to 16th in the world.

 

 

Electricity:

According to Enerdata, an energy intelligence and consulting company, in 2018 Iran rose to the 14th place in the world and generated 311 TWh (terawatt-hour) of electricity. In the same year China, the United States, India, Russia, Japan, Canada, Germany, Brazil, South Korea, France, Saudi Arabia, Britain and Mexico ranked from 1st to 13th in terms of generating electricity across the globe.

 

 

Summary:

He pointed out that “These are not our words. This is what the UNESCO report admits about Iran’s progress in science, industry, and technology,” Iran’s Supreme Leader Ayatollah Ali Khamenei tweeted, claiming that sanctions had “accelerated the shift from a resource-based economy to a knowledge economy.” 

But this tweet, along with the article he linked to as proof, is not true.

IranWire’s research has come to the following conclusions:

1. UNESCO has never made the claim that Iran’s economy has shifted from a resource-based economy to a knowledge-based one.

2. Globally, in terms of a knowledge-based economy, Iran ranks 93rd among 140 countries in the world, meaning even lower than many countries.

3. Iran is not among the 10 top producers of steel, cement, aluminum, copper and electricity.

Based on these findings, IranWire would like to award “A Pinocchio Lie” medal to Khamenei for his false claims, and his obvious attempts to mislead the people of Iran.

 

You can find out more about our fact-checking methodology here.

 

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