Can Iran reduce its reliance on oil?

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Can Iran reduce its reliance on oil?
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Iran wants to reduce its dependence on oil to finance its state budget. But that could mean more hardship for ordinary people

Travel around Pakistan’s Balochistan province, and there’s a good chance you’ll find someone savouring an Iranian yoghurt drink spiced with mint - called the laban.

From shampoos, skincare products to detergents and electronic appliances, Iranians products have long lined store shelves in the border regions of Pakistan. “A lot of that has to do with the Iranian culture. I have not met a single Iranian businessman who complains about his problems. They just try to find a way around it.”

Since US President Donald Trump reimposed sanctions last year, Iran’s economy has shrunk. The IMF estimates that Iran’s GDP will contract by more than 9 percent compared to what it was just two years back. While the sanctions, which target a host of other industries as well, are having an impact, Iran says it’s no longer taking into account income from oil sales to make its budget. Between 2009 and 2019, Iran’s reliance on oil revenue to finance its budget has come down from 60 percent to just 30 percent, says Mohsen Tavakol, a non-resident fellow at the Atlantic Council’s Middle East Programme.

Every year the government prepares its budget on the projected sale of oil. For instance, in the current 2019-2020 fiscal year, which ends next March, it has set eyes on shippingof that is supposed to come from oil exports.

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