Structural barriers

This paper is an empirical attempt to investigate bilateral trade flow between Iran and Russia. To this end, we used statistical analyses on macroeconomic series over the period of 1991-2017. Results revealed that there is a significant statistical difference in terms of exports between Iran and Russia, and that there has always been a buyer-seller dialogue between the two countries. According to the Export-Import Similarities (EIS), Iran and Russia represented low potential complementarity between the years 2001 and 2017, which indicated that there is more trade competitiveness rather than trade complementarities between the two countries. Results from the statistical tests of Friedman and Kruskal-W revealed that the service sector has played an important role in creating value in Russia’s economy. In addition, there is a statistical significant difference with respect to Iran’s exports to Russia in terms of Iran and Russia’s sanctions and Russia’s membership to WTO. During the sanctions imposed by the West, when Russia and Iran’s GDP always decreases, they find each other as regional allies and try to strengthen their bilateral economic relationship. However, there is an obvious lack of diversity in Russian and Iranian export supplies and the volume of bilateral trade between them is not expected to increase in the future. Russia and Iran have failed to establish adequate economic, technical and educational ties and there is no active economic diplomacy between them. As a result, developing a clear program for the promotion of bilateral trade is a strategic priority, which must be operationalized by politicians.