Role of home appliances industry in Iranian resilience

A scary plunge reminiscent of 1987’s crash swept around the world on Monday, with nearly everything on Wall Street tumbling as fear of a US recession grew, setting off another sell-off for financial markets across the globe.

The main index of the Tel Aviv Stock Exchange (TASE) fell to its lowest point since April at the start of weekly trading, driven by fears of a potential war with Hezbollah and Iran.

“Iran hasn’t even fired a missile yet & the world is already collapsing,” American social media persona and political commentator Jackson Hinkle observed in a post on X.

Iran hasn’t even fired a missile yet & the world is already collapsing… pic.twitter.com/SZdSbnFzkH

— Jackson Hinkle 🇺🇸 (@jacksonhinklle) August 5, 2024

Iran itself is relaxed, however. For decades, the most draconian sanctions in living history have whacked the country’s economy but failed to bring it to collapse.

The mystery lies in the hardiness which Iran’s economy has developed as firms have survived and prospered under outside pressure.

Sanctions have been a fact of life in Iran for decades, starting with the victory of the Islamic Revolution in 1979 when then-US president Jimmy Carter imposed a ban on imports of oil from Iran and froze Iranian assets held in America.

In the early 2010s, the Europeans joined the US to target Iran’s oil exports and banks and freeze foreign assets of its central bank, while banning their commercial institutions from processing Iran-related transactions.

This prompted a number of economic enterprises and large Iranian industrial companies to try their decades of technical and engineering experience and results of several decades of investment in research and development to meet part of the country's need for products supplied by the foreign companies that had left Iran's markets.

One sector standing out as a key driver of economic recovery is home appliances, which Leader of the Islamic Revolution Ayatollah Seyyed Ali Khamenei has repeatedly called on the government and economic institutions to support and sustain its steady growth and development.

According to Keyvan Gardan, the director general of metal industries and home appliances of the Ministry of Industry, Mines and Trade, Iran is now self-sufficient in the sector which relied on foreign manufacturers such as South Korea’s Samsung and LG before.

Go shopping in Tehran, and you will find Iranian-made clothing, toys and household goods. “If there were a global self-sufficiency index, Iran would be ranked highly,” he says.

The sanctions have been a boon to manufacturers serving the home market of more than 85 million, where imports are too costly for ordinary Iranians because of a plunge in the value of the rial.

The home appliances sector is a also a driver of growth in other industries such as steel and component manufacturing. Professionals of the sector have made heavy investments over the past few years, which has increased their share of the international market through exports.

Iran has a range of manufacturing industries, some of which such as mining and metals, benefit from access to cheap and reliable energy. The country’s lengthy land borders with populous countries, such as Iraq, Pakistan and Turkey, give it the advantage of a steady trade in almost every branch of business despite sanctions. 

Besides contributing to the country's gross domestic product, the home appliances business has boosted employment in the sector and related industries.

One important aspect of the sector is investment in research and development which can help protect industries from outside pressures by localizing production methods and technologies and keep the wheels of industry running in critical times of sanctions.

At the heart of the drive is Iran’s “resistance economy”, a concept proposed by Ayatollah Khamenei to leverage domestic capabilities in order to insulate the economy against hostile foreign measures.

Years of sanctions have taught Iranians to prepare and adapt to changed circumstances. As the global economy teeters on a knife edge under the clouds of a war, Iranians look to better days ahead with confidence and conviction.

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