According to the fourth report by the Tehran E-Commerce Association, Iran ranks 98th among 100 countries in terms of internet quality. In this ranking, Iran is third from the bottom, following Cuba and Turkmenistan. Furthermore, Iran and China are at the top of the list for the highest number of filtered domains. Social media filtering by the government, implemented as a policy to control cyberspace and online communications in recent years, has extensive and deep economic consequences. The impact of social media filtering on macroeconomic variables such as investment, economic growth, employment, inflation, the value of the national currency, poverty, inequality, foreign trade, the balance of payments, economic competitiveness, and other macroeconomic factors is examined in detail.

Impact on Investment

Reduced Attractiveness of Iran’s Market for Domestic and Foreign Investors:
Social media filtering, which extensively affects various sectors of Iran’s economy, especially digital industries and startups, causes domestic and foreign investors to lose confidence in the Iranian market. Businesses that rely on online advertising and digital marketing for growth and development face greater restrictions and lose both domestic and global markets.

• Example: Many startups use social networks like Instagram or Telegram to attract new customers. Filtering these platforms cuts access to these customers, leading to a decline in revenues and an inability to attract investors.

Reduced Access to Financial Resources and Global Markets:
Many startups and small businesses operating in cyberspace, especially in the field of exporting goods and services, use social networks to introduce themselves to global markets. Filtering these networks directly reduces access to international markets.

• Primary Consequence: Reduced investor interest in domestic projects.
• Secondary Consequence: Reduced inflow of foreign investment and diminished innovation in digital and technological sectors.

Impact on Economic Growth

Reduced Growth Speed in Innovative and Digital Sectors:
Digital sectors, especially startups and technology-based businesses that use social networks for growth and development, face serious restrictions. This decline in activities in innovative sectors slows down the economic growth rate. Furthermore, reduced competition in the digital space translates into lower productivity and economic growth.

• Example: In today’s world, many industries depend on digital advertising and online commerce. With these spaces restricted, businesses cannot compete effectively with rivals, resulting in slower economic growth.

Impact on Gross Domestic Product (GDP):
This crisis can have a direct negative effect on GDP. Online services and digital commerce, which play a significant role in GDP, are severely affected. Ultimately, this leads to slower economic growth.

• Primary Consequence: A reduction in GDP due to a decline in online activities and digital exports.
• Secondary Consequence: A reduction in employment in these sectors and weakening of the country’s economic capacity.

Impact on Employment

Reduction of Job Opportunities in Innovation and Technology Sectors:
Filtering social media eliminates many job opportunities, particularly in small and innovative businesses. Startups and digital businesses that rely on online advertising and product promotion cannot attract new customers or increase sales in a restricted environment. This revenue decline leads to layoffs and job losses.

• Example: Jobs specifically in digital and online sectors, including website design, software development, and digital services, are significantly impacted by social media filtering.

Impact on Non-Digital Industries:
Social media filtering not only harms the digital sector but also negatively affects non-digital industries. Many traditional businesses that indirectly benefit from digital activities and online advertising face reduced demand and consumption.

• Primary Consequence: Job losses in digital and non-digital sectors.
• Secondary Consequence: Increased unemployment and migration of skilled labor from the country.

Impact on Inflation

Increased Prices Due to Reduced Competition and Higher Costs:
One of the most significant consequences of social media filtering is rising prices. When businesses cannot advertise effectively online and competition decreases, sellers can increase prices without fear of intense competition. This leads to higher prices for goods and services in various markets.

• Primary Consequence: Increased prices, especially in consumer goods and online services markets.
• Secondary Consequence: Inflationary pressure on households and reduced purchasing power.

Reduced Productivity and Increased Costs:
In addition to rising prices, filtering can reduce productivity in many businesses. Many processes and activities that rely on the digital space for efficiency are forced to revert to older, slower methods due to these restrictions. This leads to higher costs and price pressures.

• Primary Consequence: Increased production and service costs.
• Secondary Consequence: Reduced real incomes and diminished competitiveness.

Impact on the Value of the National Currency

Reduced Confidence in the National Economy:
Social media filtering can reduce public confidence in the country’s economic system. When people and businesses perceive that the government cannot manage cyberspace effectively, they may lose trust in other parts of the economy as well. This decline in confidence can devalue the national currency.

Reduced Currency Inflows and Export Restrictions:
Many businesses and startups reliant on cyberspace for access to global markets experience reduced exports due to social media filtering. This reduces foreign currency inflows, negatively impacting exchange rates and the value of the national currency.

• Primary Consequence: A decrease in the value of the national currency and rising exchange rates.
• Secondary Consequence: Imported inflation and increased living costs.

Impact on Poverty and Inequality

Increased Poverty:
Social media filtering, especially in an economy already facing structural challenges and stagnation, can exacerbate poverty. Many people lose jobs in the digital sector and are forced to take on lower-paying, less specialized jobs.

• Primary Consequence: Increased poverty and reduced job opportunities.
• Secondary Consequence: Widened social and economic gaps and declining living standards.

Increased Inequality:
While some segments of society can still benefit from opportunities in the digital space, poorer segments are deprived of these benefits. This increases economic and social inequalities.

• Primary Consequence: Widened class divides and reduced equal opportunities.
• Secondary Consequence: A society marked by deeper inequalities and broader social divides.

Impact on Foreign Trade

Reduced Share of Iran in Global Trade:
Social media filtering can affect Iran’s share in global trade. Many Iranian businesses reliant on digital spaces to connect with international markets face severe challenges in introducing their products globally.

• Primary Consequence: Reduced competitiveness in global markets and a decline in exports.
• Secondary Consequence: Slower economic growth and a diminished share in global trade.

Impact on the Balance of Payments:
Reduced exports and economic restrictions negatively affect the balance of payments. Declining revenues from digital services and technology-related products result in lower foreign currency earnings, worsening the balance of payments deficit.

• Primary Consequence: Lower foreign currency earnings and an increased balance of payments deficit.
• Secondary Consequence: Pressure on foreign reserves and escalating economic problems.

Conclusion

Table 1 outlines the macroeconomic consequences of social media filtering in Iran. Filtering social media in Iran has broad and negative effects on small and medium-sized enterprises (SMEs) and the macroeconomy. These impacts not only reduce access to markets, increase advertising and sales costs, and hinder competition with foreign businesses but also decrease consumer and citizen satisfaction, lower incomes, and create barriers to brand development. Ultimately, this crisis increases the risk of bankruptcy, reduces market diversity, and stifles innovation.