Iran’s next president will face an ocean of challenges, some of which are long-standing, some of which are inherited from the former government, and some of which have recently been added to the ocean of problems that have affected Iran’s economy, politics, and society.
Iran’s governments due to the rule’s wrong policies and the existence of the supreme leader phenomenon never had a bright prospect. And the next president, regardless of who it will be, will face the same fate and will inherit, then add, to the country’s ‘super challenges,’ as many of the state-run media are reporting.
Challenges like the coronavirus outbreak, the economic crises, the country’s budget deficit and the instability in the Middle East which the rule in Iran playing the role of the main source of all the wars in the that region.
Droughts and environmental crises
Iran will experience the driest summer in 2021 in the last 50 years. This is not the first time that environmental crises have threatened the country. Lack of a codified and accurate plan for natural resource management. Lack of programs to manage environmental crises such as water scarcity or air pollution in the country. Adding to this, forecasts indicate a decrease in rainfall in the new water year.
In such a situation, if the new government does not see environmental issues in the form of a crisis, it will face a great challenge to formulate a comprehensive plan to deal with these crises, especially drought, and practical management of water resources in the country.
The JCPOA and nuclear negotiations
Iran has been involved in international nuclear negotiations related to the JCPOA since 2013, and now, with the inauguration of the new US administration, negotiations on returning to the JCPOA and the lifting of sanctions have resumed since April this year. But this challenge is more complicated than it predicts. Iran’s government struggling to become a nuclear and an international community with the world powers at the forefront who are trying to prevent this Iran’s goal which is important for the existence of the mullahs’ rule. In between this crisis Iran’s government is trying to use the political gap between the world powers to reach its goal by weakening radical and decisive voices with the support of its lobbies and blackmailing with the help of proxy wars like the 11-day conflict between Hamas and Israel.
Economic and social damage to the coronavirus
Iran’s dead economy because of the government’s long year corruption, looting and investigations in non-sense and non-economic activities has become worse with the coronavirus outbreak the rule’s intentionally ignorance of this danger for the people and the country’s economy.
According to the statistics of Iran’s Coronavirus Economic Impact Monitoring Base in March 2019, the value of the country’s gross national product compared to 2018 had a negative growth of 1.2 units. Other details of the extent of this damage have also been published:
Financial loss of about 202 trillion tomans of union units in Iran and damage of about 1.450 million union units. In addition to economic damages, the coronavirus pandemic has left deep social ills such as rising domestic violence, suicide, and depression in Iran.
Unemployment
As Iran’s economic growth rate picked up negatively in 2020, the Statistics Center of Iran reported a 1.1 percent drop in the unemployment rate in the spring of 2020 compared to the previous year. Further analysis of the labor market by the Research Center of the parliament showed that the reason for the decrease in the unemployment rate was the decrease in the rate of the active population in the labor market, not the increase in employment.
According to the statistics of the Ministry of Cooperatives, there were about 2.4 million unemployed people in the country until February 2020, which is a deterioration due to the continuation of the coronavirus and the beginning of the fourth wave at the beginning of 2021.
Inflation
This well-known crisis is not Iran’s new problem, and the country has been involved in its increasing trend for many years. Inflation has always been on the rise in the 2000s, except for a few years. According to the Statistics Center of Iran, the inflation rate has jumped from 2019 to the end of 2020, and this trend has continued in the first months of 2021.
The annual inflation rate, according to the Statistics Center, was 36.4 percent in 2020 and the point-to-point inflation rate was 48.7 percent. Also, the headline inflation rate in 2020 increased by 1.6 percent compared to the previous year. The trend of inflation jumping continues in 2021, the monthly inflation rate of goods and services group has increased by 2.7 percent and the annual inflation has reached 38.9 percent. Until the monetary policies and fiscal indiscipline of governments as well as the huge corruption are not reformed, the inflation crisis will be on the list of crises in the country at the beginning of each new government.
Government budget deficit
The 100-day debates between the government and parliament over the 2021 budget had one main axis: the non-realization of the resources mentioned in the budget and the budget deficit of 320 trillion tomans of the government.
Eventually, the government and parliament agreed to make changes to the budget in general, but this agreement did not prevent the formation of a budget deficit, and the head of the parliament’s economic commission recently estimated a budget deficit of 350 trillion tomans for 2021.
Shortly after announcing the government’s budget deficit, the country’s treasury announced its decision to issue Islamic securities with government guarantees from the capacity of the 2021 budget law from May 22, marking the resumption of the government’s efforts to offset the budget deficit.
The crisis of pension funds and the increase in the population of retirees
The number of retirees in the country is increasing year by year. The increase in the retirement population comes at a time when equalizing and balancing pensions has put more financial pressure on pension funds, which have been facing financial crises and resource shortages for years.
Most of the country’s pension funds are on the verge of crisis or bankrupt and provide their resources from the government, and perhaps only the social security fund is providing a small part of its resources from government commitments and 70 percent of its resources from insurance.
However, none of the funds have been able to invest their assets to cover their expenses due to wrong policies and are turning into unresolved crises.
Housing market
The housing market, like other major markets in the country, has been plagued with problems such as price spikes and shortages of land and newly built units, because of the government official’s corruption and looting, rising material prices and land hoarding.
Particularly in 2019, the market fluctuated sharply to the point where housing transactions in the capital reached their lowest level in 32 years, reaching 2,855. Housing prices also fell 3.5 percent this year but grew to 11.4 percent in the first months of 2020.
Rising housing prices in 2020 widened the gap between household purchasing power and housing prices, making the housing market inaccessible to consumer buyers. The year 2020 was also a stagnant year in the field of housing construction, and the amount of construction in the capital reached the lowest possible level in the last 17 years.
Population aging and reduced fertility
Iran has become 10 years older in the last 60 years. This is an overview of the aging population of Iran, which was raised by the Senior Advisor to the Ministry of Health in 2020.
A serious crisis that is set to make Iran the world’s oldest country for the next 30 years, fueled by declining marriage and childbearing rates, especially during the coronavirus pandemic. People are afraid of marriage or childbearing due to issues such as fear of the future, despair, economic problems, insufficient income, lack of housing and other problems, and this issue caused the birth rate in 2019 to be about 170,000 less than the previous year.
A trend which is continuing and none of the government’s baseless, worthless, and unprofessional plan due to its fundamental nature will solve this problem.
Meddling in the Middle East and terror
Iran’s government has a long history in interference in other countries affairs, which has started with the foundation of the Islamic Republic by Ruhollah Khomeini, the Iran-Iraq as the first alibi and detonator of all the crises in the Middle East. This trend continued with formation of the Hezbollah in Lebanon, the support of the Houthis in Yemen. Then founding many other proxy groups in all the Middle East countries, especially Iraq after 2003 with the invasion of Iraq by the United States-led coalition.
But that is not all. Another case which is mostly unseen but obvious are the regime’s extraterritorial terror activities which has led to many conflicts and chaos like the assassination of Rafic Hariri, which since then Lebanon has not a stable government. Or the assassinations of many of Iraq’s popular faces which weakened its society and paved the way for the rise of fundamental and extremist groups. But now Iran’s government is facing with a JCPOA+ in which these cases along with its missile case are included, which shows that the world cannot tolerate this regime’s destructive activities anymore.
