The influence of international Sanctions on the Iranian efficiency of ports Using DEA window analysis

Abstract

The economic sanctions are defined as the practices of pressure by the first country against a second country in order to force a change in the political behavior of the second country. Iran is one of the countries that became the target of sanction imposed by the USA in early 1979 after the Iran revolution. However in 2010, by UN, US, and EU increased pressure by imposing new sanction against Iran's economy and trades. This sanctions expanded to different sectors of Iran economies such as energy, oil and gas, petrochemical, shipping, ports, insurance, shipbuilding, transportation, business, trade, transaction, and financial bans. Todays the effect of sanctions from all three major imposers (i.e., UN, USA and EU) on Iran's economy are more visible and intensive. Iran economies still is suffering in many sectors due to lack of international investment, transaction, raw material and technology. The sanction influences are huge and its damage to Iran's economy is over 110 Bellion Dollars. Earliest and hardest sanction was targeted sea trade, especially shipping and ports business. Ports performance and productivity were down, it's ranking fallen down 43 steps in world ranking, the sanctions influenced and damaged ports business and it was inevitable because the whole Iranian port business owning by government. Moreover, the productivity of Iran’s ports was reduced under the influence of imposed sanctions. Nevertheless, after implementation of various policies like the establishment and use of feeder shipping companies, the ports’ productivities were improved and ports’ relative efficiencies were increased. To compare and evaluate these ports efficiencies, the ports data from 2000 to 2018 will be used which was published by the Iran Port and Maritime Organization (PMO), especially data from 2009 to 2018 will be studying and analyzing. By analyzing those data, it was found that the sanction had a huge impact on the container segment and it affected the general cargo ports activities. This effect was shown 38% deduction on container port throughput and 10% on general cargo port. Furthermore, to evaluate the ports efficiency under sanction, the DEA window methodology has been applied. The efficiency of both container and general cargo ports has analyzed using the DEA –SOLVER-LV8 (2014-1-18) program and the result are plotted by the efficiency charts and tables in chapter 5. According to analysis result, all of the container ports efficiency for two years after sanction are decreased. However, when ports managers has adapted a set procedure, the ports efficiency are improved. Both container and general cargo ports analysis result in CCR-model showed that the ports of SHR and BUS have a higher source of efficiencies with the level of 0.86 and 0.97 for SHR port; and 0.76 and 0.96 for BUS port for container and general cargo, respectively. However, the lowest efficiency from container port belongs to CHB with efficiency source 0.086 and for general cargo ports belongs to the KSH port with efficiency source 0.85. While the result of analysis through BCC-model indicates that two highest efficiency levels of container ports belong to the BIK with efficiency source 0.87 and SHR with efficiency source 0.86; and those belong to SHR with efficiency source 0.98, CHB with efficiency source 0.98 and BIK with efficiency source 0.97 for general cargo ports. The container ports least efficiency belongs to CHB with efficiency 0.089 and for general cargo the ports least efficiency belongs to the KSH port with efficiency source 0.86.