Iran, an “Attractive Model” or a Fragile Regime
In his latest meeting with the Iranian regime’s most senior officials, the regime’s supreme leader Ali Khamenei claimed that the “power system of the Islamic Republic and its achievements in various fields have become an attractive role model for nations.”
The question is, which other countries and nations around the world are now following Khamenei’s claimed, “attractive model?”
Regarding the damages to the regime with this policy, Abbas Abdi, one of the regime’s experts said, “Instability in foreign relations plays an important role in the stalemate of economic growth and has negative psychological effects on people. Iran is still embroiled in a variety of conflicts. The sanctions and the JCPOA, the Middle East and the issues of Syria and Lebanon, Yemen’s war, Iraq and its Kurdistan, Afghanistan, and the refugee crisis, possibly Pakistan’s problems, and to some extent, indirect involvement in the Ukraine conflict are among them.”
He added, “In addition, problems may arise between Baku and Armenia at any moment and affect Iran. Relations with the southern countries of the Persian Gulf, except for Oman and Qatar, are not stable, and we have our problems with Turkey. Oil exports and economic exchanges can also be problematic at sea and for the (oil) tankers. In short, the combination of these conditions increases the country’s risk index.”
‘Instability in foreign policy’ and its effect on “increasing the country’s risk index” is one of the characteristics of a government that suffers from a weakness in domestic politics and administration. The Iranian government is heavily involved in incurable crises and is relentlessly trying to dispatch these crises to other regions.
Discussing this ‘attractive model’, Khamenei was forced to confess the widespread desperation among the regime’s officials. He said, “Making the people lose hope and making them feel we have come to a dead-end is an act of oppression against the people and the Revolution.”
This is the paradox of his speeches as he uses terms that are expressed only by a government that is more fragile than ever. For this reason, the regime cannot adopt a consistent and long-term policy.
Khamenei said, “It is due to the passivity that man feels deadlocked and says that nothing can be done anymore; This is a dangerous poison. For a manager of a complex, it is toxic to feel stuck. And the enemies try extremely hard to instill this feeling in all of us in various forms. By meeting, talking, chanting, doing interviews, via the news, by some operational activities… they try to create despair, passivity, impasse, and the like among their opponents. This is damaging.”
Hopelessness, passivity, and impasse have become the common terms with the “attractive model” for the regime’s officials. Repeating these terms makes it crystal clear that the purpose of speaking about other subjects is to marginalize the regime’s main issue. Therefore, Khamenei is then forced to motivate the regime’s officials constantly and remind them that they are still not overthrown.
The truth of the matter is that the growing activities of the Iranian Resistance led by the People’s Mojahedin Organization of Iran (PMOI/MEK), from its Resistance Units to its enlightening efforts on the internet, have created a great danger for the regime.
Iran Regime’s JCPOA: Surrender or Remorse
Since the new round of nuclear negotiations began, the Iranian regime has tried desperately to promote that it has the upper hand in the negotiations and that by insisting on its red lines, it has succeeded in bringing the US government to its knees and gaining some significant concessions. It has gone even further in making the preposterous claim of managing to create a schism among the World powers.
The mullahs are completely caught up in their self-made illusion, talking about deserving compensation because of the sanctions against them, while at the same time demanding that those sanctions be lifted. They are creating a foggy atmosphere, touting claims that both sides of the deal have reached a 95 percent agreement, and, therefore, they have dismissed any disagreements as insignificant or marginal.
However, the concerns put forward by the regime’s own media and experts are highlighting the reality of the situation. In an article entitled, “Delay in the revival of the JCPOA is dangerous,” the state-run Etemad daily wrote, “Decision-makers need to make new assessments and calculations of new regional arrangements and orientations. Assessment outside of the cumbersome considerations in Iranian official circles, however, shows that the delay and hesitation in the rapid signing of the JCPOA is a loss of a historic opportunity, and the loss of this opportunity will undoubtedly lead to historical regret.”
In an article entitled, “Vienna’s opportunity is being lost,” the state-run Mardom Salari daily quoted former regime official Kourosh Ahmadi, who warned the regime that they should not count on China’s help to circumvent the sanctions to sell oil, emphasizing that, “the revival of JCPOA could also end some of the political tension between the government and the outside world.”
A statement addressed to the Iranian regime’s president Ebrahim Raisi, by 250 members of the regime’s parliament has shown a new aspect of the dispute and disappointments of the regime regarding its future. Analyzing this statement, shows the obstacles officials face in reaching the desired agreement.
Paragraph one of the statement states, “In the new negotiations, the United States needs to guarantee a law that it will not withdraw from the JCPOA, and the issue will be adopted in a completely legal manner in its decision-making bodies such as Congress.”
It can be seen that the current US government has not guaranteed that it, or any future government, will not leave the JCPOA, and any such agreement will not be approved by Congress.
Regarding this matter, Fowad Izadi, from the regime’s principlist faction, made a remarkable point, saying, “A majority in the House of Representatives opposes what Mr. Robert Malley is doing in Vienna; occasionally, they make a statement or write a letter. The majority Republicans and Democrats, and in the US Senate, for example, there are now 49 to 50 Republican votes (against the negotiations).”
He added, “Four to five Democratic senators have officially stated that they do not agree with the Vienna process, and if five or six people join the group, then the US Senate will have the ability to break any agreement you have reached in Vienna. This means that it will repeat what happened last time.”
The second paragraph of the statement read, “One of the main conditions of negotiations is the absence of threats after the agreement. But the existence of a trigger mechanism actually means maintaining the threat and the failure of negotiations. Therefore, it is necessary to obtain the necessary guarantees in such a way that if the United States enters the JCPOA, the trigger mechanism will not be applied under various pretexts.”
From this paragraph, it can be understood that the application of the trigger mechanism in case of a possible agreement is one of the biggest concerns for the regime. If the Bidenadministration decides to return to the 2015 JCPOA, this will allow them the use the trigger mechanism.
The third paragraph expresses concern over the imposition of new US sanctions during the negotiations, stating, “Unfortunately, during the negotiations, the United States imposes new sanctions on government individuals, institutions, and agencies, which points to a destructive intention in the negotiations. So it is necessary to specifically prohibit the enactment and imposition of new sanctions and state that the lifted sanctions will not be re-imposed.”
This clause shows that even if the nuclear sanctions are lifted, others will be implemented that will address the missile program, terrorism, and human rights issues. This would mean that in practice, their temporary suspension will not benefit the regime.
Gradual death of Iran’s soil, subsidence, an irreversible threat
Iran’s soil is experiencing a slow and silent death. Despite the many warnings of domestic and international experts, the regime has not done anything to stop the destruction of the country’s environment, and in fact, its exploitive actions are only increasing the destruction.
Since 2005, water and soil experts have consistently warned that Iran is suffering from irreversible environmental destruction. They have said that Tehran’s ground is subsiding around 17cm annually, and this is not just happening in Tehran; many other cities are reporting the same situation. For example, reports have indicated that fields in Varamin, east of the capital, have subsidence of 12cm, while Mashhad city in the northeast, reported that this year the fields around the city, as well as the ground of the city have subsided by 24cm.
The state-run news agency ISNA reported that the reason behind this disaster is the prodigal groundwater withdrawal. It wrote, “When the amount of withdrawal is more than the amount of sustenance of the aquifers, the earth moves downwards and finally the soil particles are compressed and, in such conditions, the phenomenon of subsidence finds another meaning and that is the ‘death of aquifers’.
It added, “Because the aquifer particles are compressed due to subsidence and can no longer return to their real state. Hence the phenomenon of subsidence is referred to as ‘an irreversible risk’.”
The damage in the cities is already weakening the foundations of buildings and structures, with dangerous cracks appearing in the buildings making them uninhabitable. Longitudinal structures, such as roads and railways, power lines, gas and oil pipes, power plants, and refineries, must be carefully aligned and any diversion from this will have severe and dangerous results. These situations, it is creating a life-risking situation for the Iranian people.
The head of Iran’s geological water group of the Geological Survey of Minerals and Exploration has indicated that “in 13 years in some basins, four times as much water that has entered the plain, has been withdrawn by various means, including agriculture.’ So, it would not be strange to witness a ‘water depletion on the horizon.’
In this regard, in an interview with ISNA, Dr. Iman Entezam stated other facts about this environmental crisis. He said, “The groundwater situation in the country is somewhat clear to everyone, and we have witnessed a decrease in groundwater reserves since about 1993-1994 due to improper withdrawal, the creation of illegal wells, climate change, and lack of proper water management in the country that happened all over the country.”
Other regime experts have said that subsidence is nothing new and that it has been occurring in the country for the past 10 to 15 years, and it is only now that they are realizing its results. They have begun referring to this phenomenon as ‘Earth cancer’ because the regime is now in a situation where it is unable to do anything about it anymore.
One of the reasons that the experts have said is having a major effect on the water scarcity in the country is the regime’s unscientific dam creation, which has destroyed the country’s indigenous engineering. These dams are the main causes of the vast evaporation of the country’s water resources that are accumulated behind these dams. As a result of the mismanagement of the resources, the regime has completely destroyed the country’s dryland farming.
With the amount of agricultural capable soil, theoretically, Iran would be able to produce and provide enough cereal for the whole of the Middle East region.
The most dangerous province in the country in terms of subsidence is Isfahan in central Iran. It is the only metropolis in the country where subsidence has severely penetrated the city. The subsidence rate in the Tehran plain is said to be about 6 to 7cm., and the regime does not seem to be concerned at all. Around the world, in cases where the subsidence rates are higher than 7cm, warning sirens are usually sounded to alert people to the danger it may cause.
The subsidence rate in Fars’s province is also high, like in other provinces. While the main faults of the country are mainly located in Kerman province, this province is also facing subsidence which has dramatically increased the risk factor of impending disasters.
North Khorasan, in the northeast, which has suffered major natural crises such as floods and earthquakes, mostly above five magnitudes on the Richter Scale, must now add to its books the risks of dangerous subsidence.
The plains of Yazd-Ardakan and Abarkooh in Yazd province have been noted to have the highest rates of subsidence in the province. Due to the lack of groundwater resources, lack of catchments, and reliance on internal resources, Markazi (Central) province is also facing rising levels of subsidence. Across Iran, it has been noted that around 609 plains in the country are currently exposed to subsidence.
Iran’s Regime a Specialist in National Wealth Devastation
Under the rule of the Iranian regime, national wealth and the people’s capital have been squandered. Without any regard for the country’s future and progress, the regime has wasted more than four decades of the country’s resources, and they are not ashamed of constantly insulting the Iranian people with their voracious and shameless appetite.
Alireza Erafi, the director of the seminaries in Qom, said in an interview, “I used to say in the Al-Mustafa University that if you want to lend money to a seminary student, put an amount where there is no accounting, and the seminary students are free to take whatever they want and then return it.”
He added, “Even if an amount is lost, there is no problem, but it is worthwhile to strengthen that sense of freedom of choice and return of the loan by the student without any external factors. This gives him a personality that is above all these professions and makes the seminary spiritual and moral.”
These shameless remarks have caused a public backlash, and some have questioned whether, after 43 years of ‘stealing’ and ‘wasting national wealth’, there is still any money left to those scholars and mullahs should have free access?
This report addresses some aspects of the plundering of the resource and its effects on the Iranian economy.
The Iranian regime rules a country that, according to credible reports, possesses eight percent of the world’s natural resources, and almost all elements of the Mendeleev table can be found in abundance in this land.
However, the ‘Iranian Welfare Information’ database, affiliated with the regime’s Ministry of Labor and Social Welfare, reported on April 4 that 93 percent of Iranian households are dependent on subsidies, of which 35 percent are poor, 57 percent are from the middle class and eight percent are considered rich, of them are in the ranks of the regime’s elite and supporters.
According to the report, a statistical study by the Deputy of Social Welfare in the Ministry of Cooperatives, Labor and Social Welfare, shows that 77.4 million people need the support of subsidies to be able to manage their livelihoods. Of this figure, 27,103 million people live in poverty.
The existence of a large bureaucratic apparatus and numerous religious institutions that do not provide any public services are among the reasons for wasting Iran’s financial resources.
Economic corruption is another cause of the destruction of national wealth. As Transparency International recently announced, Iran currently ranks 150th out of 180 countries in terms of the corruption perception index.
Statistics released by the regime’s Ministry of Economy and Finance show that the regime had sold over 1,370 trillion dollars of oil by the end of 2017. A large sum with which any country could rise from its ashes and join the club of the developed countries, but because of the regime’s economic destruction, Iran is not even among the developing countries. The only subject that is developed in Iran, is inflation, high unemployment, low economic growth, stagnation, stagflation, etc.
After former regime president Mahmoud Ahmadinejad took office, the price of oil rose to $140 a barrel. During his eight-year tenure, Iran is said to have generated more than $700 billion in oil revenues. But contrary to Ahmadinejad’s claims, not a single dollar of this huge income was seen on the people’s table.
After Mahmoud Ahmadinejad’s term, Hassan Rouhani signed the 2015 nuclear deal with 5+1 known as the JCPOA, which freed up about $150 billion in frozen regime assets in various countries. But again, nothing of this enormous wealth reached the people.
The regime situation is so disastrous that instead of supporting the people, it is fleecing them more and more and compensating its budget deficit from their pockets. An example of this claim can be seen in the stock market where, according to many regime officials and experts, the Rouhani government earned three quadrillion rials from the people’s assets and investments.
Iran: Women Resist Against 28 Oppressive Agencies
In the past four decades, Iranian women and girls have been at the forefront of resistance against the religious dictatorship and its misogynist laws, constitution, and suppression.
During recent nationwide demonstrations, including the protests over the sudden fuel price hike in November 2019, women’s leadership was highlighted more than ever, forcing officials to admit repeatedly to this fact.
These days, Iranian women’s struggle for personal and social freedoms, and fundamental rights, has severely terrified the authorities. The regime has intensified its systematic suppression and misogynistic measures in response to the women’s repeated attempts to make their voices heard.
Background of Misogyny in Iran
Since the mullahs took power in February 1979, regime founder Ruhollah Khomeini institutionalized misogynism and gender apartheid within the new theocratic tyranny. Khomeini rushed his thugs, the Hezbollah forces, onto the streets to suppress women who defied the mandatory hijab. “Either scarf or stick on the head,” chanted Khomeini’s loyalists. Since then, the people of Iran named them club-wielders due to their penchant to use clubs against any dissent. At the time, the opposition group, the People’s Mojahedin Organization of Iran (PMOI/MEK), strongly condemned the regime’s misogynist measures under the banner of Islam and religious beliefs. The MEK’s condemnation was a significant blow to Khomeini’s dreams of establishing an “Islamic empire,” because the organization was the most prominent Muslim organization against the toppled monarchic dictatorship. In March 1979, a group of women held a grand march in Tehran, protesting the regime’s misogynist policies, including the compulsory hijab. Khomeini dispatched Hezbollah forces to crack down on women. However, MEK female members wearing scarves held a human chain around the protesting women, which prevented Khomeini’s forces from dispersing the protest. Club-wielder injured many MEK female members. Ultimately, Khomeini’s thugs failed to stop the march. The MEK proved that Khomeini had exploited religion to maintain his power on power and that his claims about protecting Islam were utterly false. Nevertheless, Khomeini implemented his misogynistic measures despite women’s objections and unilaterally imposed the compulsory hijab and eventually implemented it by the force of the club. Iranian women, however, have continued their resistance during the past four decades, completely refusing the submit to the regime’s medieval practices. In a bid to quell the women’s struggle for fundamental rights, the mullahs formed around 28 oppressive agencies, which only further strengthened women’s determination for anti-regime activities. For instance, authorities recently banned women from attending and watching a soccer match between Iran’s national soccer team and Lebanon’s in Mashhad. Security forces fired teargas into the crowd and sprayed pepper on the protesting women to disperse them. The regime prohibited women from entering the stadium, even though it had sold tickets to a small number of women and had bragged about ceasing its antiquated laws in this context. True to form, the mullahs broke their commitment at the last moment, prompting public fury. Following this flagrant suppression, the Iranian regime’s president Ebrahim Raisi, infamous for being the ‘butcher of Tehran’ for his involvement in the mass killing of political prisoners in 1988, held a meeting with sociocultural activists in Khorasan Razavi Province. The Mehr news agency, affiliated with the Ministry of Intelligence and Security (MOIS), quoted Raisi in its April 1 dispatch as saying, “There are nearly 28 agencies responsible for enforcing the hijab.” Raisi’s remarks are an apparent admission to the regime’s failing misogynist measures against women and arouse severe condemnations inside the country and abroad. Furthermore, he implicitly revealed that the regime can no longer thwart women’s activities and that the suppression has backfired as the recent clampdown in Mashhad ignited a wave of national solidarity with women across Iran. Indeed, this solidarity was also experienced during nationwide protests in January 2018, November 2019, and March 2020. At the time, security, and intelligence commanders repeatedly highlighted women’s roles in fomenting and leading uprisings in various cities. Moreover, women continue to organize and lead many civil protests and anti-regime activities across the country, with each event seriously terrifying the mullahs about their regime’s future. Therefore, they are desperate to intensify their misogynist measures to counteract the entire society and delay their ultimate downfall.Iran’s Regime and Its Humiliating Subsidy
“I will not say what I’ve received.” This is the answer of the Iranian regime’s president Ebrahim Raisi to a reporter who asked him about the country’s economic situation.
Just a brief look at Iran’s miserable economic situation reveals the true extent of the destruction that has been caused. What Raisi did not dare to say is that he received an economy without an infrastructure when he became president. Poverty is so widespread that except for the regime’s officials, almost everyone in Iran is living on or way below the poverty line.
One of the signs of this critical situation is the real value of the subsidy. In exposing the rate of the subsidy, Raisi stated, “The value of the 450,000 rials of subsidy yesterday, has now reached 70 rials.”
This subsidy has never been able to match the staggering inflation and the huge liquidity that has resulted from the regime’s corrupt economy. And today, worth less than a bucket of yogurt.
On this topic, the state-run daily Tejarat News wrote, “While the first 2022 subsidy is deposited into the account of the head of the household, many recipients have serious objections to the amount of the subsidy. As some audiences say, these subsidy rates do not even cover the purchase of yogurt. Having to grapple with the dramatic spike in the price of many commodities, the public views the current subsidy as a token and even worthless.”
Further expressing its frustration, this daily added, “We do not want high subsidies. Control the inflation. By God, we are being squeezed below the living costs. With these tokens, which we call a subsidy, even a bucket of yogurt cannot be purchased. You are insulting us all. And every day you make hollow promises. The analysis of Tejarat News shows that the price of a kilo of yogurt is more than 500,000 rials. When a kilo of low-quality rice is over 400,000 rials, what is the use of this amount of subsidy for this nation? Even if three people put their subsidies together they be not able to buy chicken.”
Everyone in Iran cites the devaluation of the national currency, the skyrocketing inflation rate, the monetary-based growth, staggering liquidity, the decline in GDP, and a decade of negative economic growth among the damages caused by the country’s declining economic situation.
The regime’s president, however, is playing innocent. “If the value of the national currency does not rise, whatever salary raise we give will not work in practice,” Raisi admitted.
On April 1, the regime’s media challenged Raisi’s remarks. The Eghtesad Online website wrote, “This statement of the President while examining the inflation of previous years and its application on cash subsidies shows that subsidy has decreased even more and a subsidy of 455,000 rials in 2010 is currently worth about 43,000 rials.”
Iranian Security Use Pepper Spray Against Female Soccer Fans
The Iranian regime’s brutality against women who wanted to attend the national soccer team’s match in Mashhad has become one of the main topics in Iran’s media and has once again revealed its misogynist nature.
Shortly before the start of the match, the regime decided to prevent women from entering the stadium, even though they had valid tickets. The police attacked the women outside the gates with pepper spray, which also hurt some children who were present.
This decision to ban women from attending the game enraged the Iranian people, many of whom asked FIFA to sanction and suspend Iran’s soccer team from international competitions not only because this prohibition is a brazen violation of FIFA’s regulations, but also because it would show that the mullahs cannot discriminate against women with impunity. Such a decision would also encourage women in their struggle for their rights.
The most surprising part of the event was that, unlike in earlier attacks, women wearing chadors were subjected to violence by the regime’s security forces, undermining any excuse of fighting the violation of the regime’s compulsory dress code.
In a modern country with a civilized government, it would be inconceivable to attack a group of peaceful women and their children who simply wanted to watch a match of their national team.
The regime in its entirety opposes women attending matches. However, the backlash over this incident terrified the officials, forcing them to reluctantly react to the incident and shed crocodile tears for the women.
Without naming his father-in-law, Ahmad Alamolhoda, Ebrahim Raisi instructed the interior minister to “investigate the incident.” During the Friday Prayer Congregation before the match, Alamalhoda had brazenly claimed, “If a group of young men and women attend this match, a group of girls and women might get excited, clap, whistle, and jump in the air. This becomes vulgarity and vulgarity is a sign of sin.”
True to form, no official took responsibility for this brutal attack. Indeed, the Soccer Federation was blamed for this incident because it had sold tickets to women.
For its part, the Soccer Federation has since ludicrously claimed, “All tickets were fake and only nine women had bought tickets.” While all tickets were bought online from the Federation’s website, how does one explain the fact that it was only women who bought the fake tickets and not men?
To deal with this fiasco, the officials tried to blame this incident on an arbitrary decision. But a regime security official at the Khorasan Razavi Security Council acknowledged that officials in Tehran had ordered women to be barred from entering the stadium. He said, “We only enforced the decisions that were taken in Tehran. We and the Provincial Security Council abided by and carried out the order that came from Tehran.”
As if nothing serious had happened and that the main dispute was over money, the Soccer Federation announced that “Women who had bought the tickets will be refunded within 48 hours.”
Rejecting the regime’s narrative, Iranians demanded that FIFA suspend the national team from international competitions.”
Only two countries in the entire world routinely prevent women from attending soccer matches. One is Afghanistan, which is led by the Taliban, and the other one is the Iranian regime led by the mullahs.
Will Iran’s Regime Bid a Painful Farewell to Its IRGC?
While many analysts of Iran’s political landscape expected a unified stance within the Iranian regime after Ali Khamenei, the regime’s supreme leader decided to consolidate his government by appointing Ebrahim Raisi as president, the latest facts show that he did not achieve his goal and quite to the contrary, the regime is facing serious political discord among the ruling elite.
Over the past weeks, as the Iran nuclear talks near completion, the Islamic Revolutionary Guard Corps (IRGC)has become the main source of these disputes. The regime has demanded that the US government remove the IRGC from the list of Foreign Terrorist Organizations (FTO).
Since April 15, 2019, when the US government’s decision was first made, it created serious problems for the regime’s financial support, and the regime subsequently faced shortages in boosting its external activities, while most of the country’s economy is controlled by the IRGC. With the regime currently taking part in the continuing nuclear talks, the IRGC has become one of the main topics of the negotiations between the US government and the Iranian regime.
Under pressure to clarify and accept a new JCPOA, the regime’s foreign minister Hossein Amir-Abdollahian quoted some of the senior IRGC commanders in a TV interview on March 26, 2021, as saying that the regime should not give priority to the Revolutionary Guards in the negotiations.
He said, “The high-ranking officials of the IRGC always remind us that the issue of the IRGC should not be an obstacle for you. In fact, high-ranking IRGC officials are showing self-sacrifice at the highest level!”
He added, “The issue of the IRGC is part of our negotiations, as are other issues that are still really going on between us and the Americans.”
This has been done to pave the way to end the negotiations and get the regime out of the deadlock it is facing and its consequences. But the specter of adverse and dangerous consequences of the IRGC remaining on the FTO means that the regime must refrain from its regional interference, which will be a strategic blow to the regime.
Therefore, some of the regime’s officials voiced their concern and frustration about Amir-Abdollahian’s remarks.
The state-run news agency Fars, affiliated with the IRGC, quoted Hossein Shariatmadari, Khamenei’s mouthpiece in the daily Kayhan, as saying, “You have mistakenly called surrender ‘sacrifice.’ The IRGC Command is expected to correct the Foreign Minister’s remarks by announcing a quick and clear opinion.”
Regime MP, Ali Khezrian attacked Amir-Abdollahian in a tweet, saying, “Amir-Abdollahian’s remarks were wrong because they are ultimately against the interests of the state and complement the enemy’s plan to create a gap between the state and the people.”
Still, others argued cautioned against criticizing Amir-Abdollahian’s remarks. Rasoul Montajabnia, referring to the critical situation and the impasse the regime is facing, warned, “Now the state is in such a predicament that requires the lowering of the temperatures. Sometimes the officials need to step back a little, and according to (Imam) Khomeini, drink from the chalice of poison, so that they can solve the problems.”
The question here is whether Khamenei will accept such a decision? The fact is that the regime is caught between a rock and a hard place. Accepting a new JCPOA with the US government’s conditions and demands will have the same consequences.
As Khamenei desperately said on March 10, “This presence in regional issues is our strategic depth. This in and of itself is a tool to strengthen the system. How can we abandon this?”
Iran’s mafia-controlled economy
From 2019 until the present day, the ‘capital depreciation rate’ has overtaken the ‘capital formation rate’ in the Iranian economy and negative capital stock growth has been reported.
According to the Iranian regime’s economic experts, this is set to become even more concerning because the regime’s weak and crisis-ridden economy is at its worst point in the past four decades. This is a clear indication that even positive progress in favor of the regime during the ongoing nuclear talks will be of no help to rescue it from an economic collapse.
Estimates have shown that between 2005 and 2020, around 171 billion dollars’ worth of capital has left the country. In fact, on average, about $11.4 billion per year, equivalent to about 342 trillion tomans, has left the Iranian economy annually.
On the other hand, the negation of the ‘capital formation rate’ (for the third year in a row) is correlated with the ‘capital flight’ from the Iranian economy.
This has created a hopeless situation for the regime. When the very few remaining foreign investors see the current state of the economy, they estimate the future rate of return on capital and conclude that their investments will have no returns. They will eventually withdraw their capital from the country. The result of this will be a drop in the ‘rate of capital formation.’
When the ‘capital formation rate’ becomes negative, less investment is made in the economy. Thus, considering the depreciation of previous investments, less capital would be available the year after to produce goods and services.
The result is clear: Along with the growth of liquidity, the production of goods and the provision of services will not grow and become negative, meaning inflation will peak. If the decline in the ‘rate of capital formation’ continues, the regime’s economy will gradually go downhill. A gradual death that will blow all the regime’s hopes and dreams away.
Another reason for this situation is that even after four decades, the regime’s economy is still in the category of a single commodity economy.
The regime’s economy is still dependent on the export of oil, steel, petrochemicals, and several mineral exports. Simply put, its economy is not yet diversified, and crude and general classification accounts for almost 80 percent of Iran’s exports. For this reason, the regime’s economy can still be considered a single commodity economy.
One of the characteristics of single commodity economies is the government’s control over the trade of a few products. The government and certain state-affiliated institutions control the production and export of these products. On the one hand, it is much easier to impose sanctions on the country while for example, it exports 50 products instead of 500, and on the other hand internally, 50 exporters will inject dollars into the economy instead of 500 exporters, which is creating a quasi-mafia economy.
At the same time, since the regime is run by a few large institutions, these institutions are in control of the exchange rate in the domestic market. When imports are profitable, they keep the exchange rate low to have the highest sales and when exports are profitable, they raise the exchange rate so that these groups get the highest profit.
Real private sector investors and ordinary people are, in fact, out of the trend and have no stake in this big game. As a result, a certain supply chain takes shape. The result of this chain is that, instead of having multiple players in the market, none of which can have an absolute impact, the country’s economy is given to only a few regime-managed institutions and only a few ‘economic blocs’ are formed.
The regime’s institutions are responsible for catastrophes such as ‘hoarding’, ‘smuggling’, and the like. These institutions usually take the capital out of the economy after they have filled their pockets with the people’s money and invest it in a safe place like the banks of Switzerland, or real estate in Europe and Canada.
What is worse is that the regime’s legal system is enabling this corruption. According to its economic and legal experts, the prosecution of owners of the capital taken out of the country is nearly impossible and the regime has so far prosecuted just a few small players, leaving the large actors untouched.
Iran’s Looted Black Gold
Corruption, theft, and waste in Iran are so deep-rooted in the regime that even its supreme leader Ali Khamenei has compared it to a seven-headed dragon.
Despite being the main source of the country’s economic and scientific progression, along with strengthening its infrastructure, oil has become the main source of the regime officials’ corruption. The heads of the regime’s oil industry are all involved in various cases of corruption, money laundering, and embezzlement.
As Mohammad Bagher Ghalibaf, the regime’s speaker of parliament previously claimed, there is no accountability in this field. In a tweet on March 25, Ghalibaf said: “One of the problems of running the country is the multiplicity of revenue accounts and the lack of accurate monitoring of the resources obtained from the sale of petroleum products.”
This was seemingly a clear admission to corruption that is swallowing all the country’s wealth. This situation is the result of the regime’s political turmoil and the rule of nepotism in the oil industry, one of the many examples of the lack of strict control over the revenues from the sale of petroleum products, which has not been included in any of the regime’s budget bill over the past years.
In regards to the budget bill for 2021-2022, the state-run daily Resalat raised a question on December 26, 2021, which strengthened the suspicion of a longstanding and state-run corruption, writing, “What is the share of oil revenue in the total budget of the country after one hundred years of investment in this industry? Only 65 percent of oil and natural gas exports.”
They further added, “The question is what happens to the sale of crude oil and natural gas at home, which is priced twice as much as the general budget of the government, according to Article 1 of the Law on Targeted Subsidies? Why is the forecast of this income not seen in the 2022 general budget of the government?”
This admission of the Resalat daily is conforming to the fact that the regime is stealing the daily income of the sale of more than 2.2 million barrels of oil, as well as the income from the domestic gas consumption, which is about 600 to 700 million cubic meters of gas. Furthermore, this income is not included in the budget bill and the regime’s revenue balance sheets.
This is in a situation in which the regime’s Ministry of Oil receives a budget of more than 100 trillion tomans every year, and of course, when its revenue is uncertain and is not included in the annual general budget, no tax will be paid on the revenue.
Part of the oil that is produced and exported by companies or institutions which hold the awarded contract, its production, and its sales abroad are involved in major violations.
Previously in an interview with the regime’s Radio Farhang on July 14, 2019, Amir Khojasteh said, “Because of the non-compliance with the law, out of 40 oil contracts, 39 were accompanied by violations and collusion.”
But corruption in the regime’s oil industry is not just dedicated to its income and annual budget. There are cases, with accurate testimonies, of the regime’s Revolutionary Guards (IRGC) and its mafia smuggling oil outside the country.
Corruption has pervaded the country’s economy, and this has caused the economy to suffer more than ever. The misery that has caused inflation and rising prices has plunged most people into poverty, while the ruling elites, including the regime’s oil moguls, are enjoying ‘royal life.’
