Iran Economy NewsIran’s Economy and the Government’s Unavoidable Wrong Decisions

Iran’s Economy and the Government’s Unavoidable Wrong Decisions


Iran’s economy is currently facing various obstacles, all of which are of great importance and have challenged Iran’s economy. In this regard, high and chronic inflation, which itself is rooted in serious budgetary problems, government fiscal policies, and regime corruption, is one of these nodes.

In addition, the problems and shortcomings in the country’s banking and monetary system, the crisis in pension funds, the water and environment crisis, the organization of production, which instead of moving towards competitiveness, day-to-day is nearing a monopolized economy and property rights, which have shifted toward rent-seeking, are among the challenges and obstacles of the Iranian economy.

On the other hand, in the field of foreign relations and foreign trade, the country also faces many problems so that the balance of trade is not in the interest of exports. About the country’s capital, there is no transfer of capital into the country, and the country is witnessing an increase in capital outflows, which is executed mostly by the officials and the regime’s officials.

This is a long list of the economic problems which is mostly hurting the people and each of which is important, and if the regime will be not able to solve these problems, the situation will remain the same, and even becoming worse.

Although oil revenues have always been a solution to these problems in the short term, even if sanctions are lifted entirely, Iran’s position in the global energy market is not the same as before.

At the level of macro and strategic decisions, the regime is also showing many weaknesses which are worsening the situation and moving from one crisis to the next which are all made by its decisions to ensure its existence. They have not given the regime its desired result. On the contrary, the regime has become busy with this self-made mistake which is increasing its enmity with neighboring countries and increasing its economic siege.

Generally, the authorities’ view of the economy is not correct, and they think that the economy can be driven by planned government intervention. An example of this is the regime’s struggle over the past years to become a member of the Shanghai Cooperation Organization (SCO), thinking that playing in the field of an East and West bloc will solve their problems which is not consonant with the reality of the world economy in this century.

Meanwhile, the interests of powerful mafia groups controlled by the regime’s supreme leader and the Revolutionary Guards (IRGC) have always had an impact on the emergence of difficult economic conditions. These groups benefit from this situation and have become a tall barrier in front of the country’s economy, making all the economic decisions effectless. Therefore, all the decision-makers are going through the same meaningless path.

And the supreme leader’s office has blocked all economic discussions, and many important and influential decisions are person-centered, and when these decisions are made, the country’s managers are forced to implement them without any question, like the full price hike in 2019, or the regime’s 200-million-euro aid for the IRGC Qods Force, which was a blow to the country’s suffering economy, and ultimately, it will lead to an economic collapse.

A study of the regime’s economic attitude by different governments also shows that only faces change, but insights and attitudes to the economy have not changed.

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