Iran Economy News Why Is the Iranian Economy Failing?

Why Is the Iranian Economy Failing?

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Iran's currency

By Pooya Stone

The Iranian regime has tried to convince people that sanctions are the sole reason for the failing economy, but because of infighting amongst the various factions,

many officials and even the state-run media have acknowledged that institutionalized corruption and the bizarre economic structure in the country as the real reason for the freefall.

The state-run Mardomsalari daily wrote: “We have an extremely failed and fallen economy. The main reason is the currency shock and the plundering of the economy by semi-private companies and banks. Sanctions have become an excuse for some people to plunder the country. We suffer from both foreign and domestic sanctions and those who profit from this situation.”

For years, the Revolutionary Guards (IRGC) have, by order of Supreme Leader Ali Khamenei, seized Iranian companies under the guise of privatization; something that president Hassan Rouhani admitted in 2017,  calling the IRGC the ‘armed government’ and saying that the private sector cannot compete.

Some examples of this are the Haft Tappeh Sugarcane factory in Khuzestan Province and Hepco Company in Arak; both of which seen massive strikes by workers who have been denied their wages for months.

Meanwhile, the regime is also trying to sell oil futures to the Iranian people to make up for the budget deficit because they cannot cut down on the amount of money they send to terrorist groups across the region.

Other failed schemes of the regime to prop up the economy:

  • Borrowing huge amounts from banks
  • Printing more money
  • Artificially fixing the exchange rate

All this has caused in unbridled inflation.

The Central Bank’s Economic Studies and Policies Department noted that as of June 18, liquidity had reached 26514.6 trillion rials (up 7.3% on the previous year). Rouhani attempted to fix this with stock market manipulation, which resulted in the sudden freefall of the Iranian stock market.

None of this has been helped by the coronavirus pandemic, which – despite Rouhani’s claims – has shrunk the economy, resulted in millions of workers being worse off, and means that even if they could freely export oil, Iran would not have access to all of its resources.

All in all, the Parliament Research Center reported a sharp decline in Iranian living standards since 2010.

Abbas Davari, the Chairman of the Labor Committee of the National Council of Resistance of Iran (NCRI), said: “In these circumstances, no Sino-deal, Euro-trade, or US-bargain can save the ruined economy that is designed only for enriching the few ruling mullahs. The only elixir is regime change.”

 

Read More:

Iran: The Plundering of National Resources in the Name of a ‘Comradely Capitalist System’

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