Iranian economic problems have been increasing for several years now reports The National Council of Resistance of Iran (NCRI), and the People’s Mujahedin of Iran (PMOI / MEK Iran), Regime Officials point to western sanctions to justify this economic downturn, ignoring that the downturn in question was ongoing when the 2015 Iran Nuclear deal was instated. It was only in December 2017, months before the US pulled out of the agreement to re-impose its own unilateral sanctions that the first in a serious national uprising began. The rising inflation, unemployment, and poverty play an obvious role in the unrest.
The first constituent protest was held in Mashhad, to protest the worsening economy, however as the uprisings spread, they assumed a more general political message.
These demonstrations alluded to the fact that the Iranian people attributed the economic downturn to government corruption, not foreign pressure. Protesters rallied with slogans like “the enemy is here; they are lying when they say it is America.”
This is obviously in direct contention with the Regimes’ demonization of US sanctions. Recently several experts have sought to quantify the effects of long-term corruption that is riddled throughout government entities. The corruption is also prevalent throughout a private sector dominated by political elites and members of the hard-line parliamentary regime, the Islamic Revolutionary Guard Corps (IRGC).
After the Iran-Iraq war empowered the IRGC politically, the “privatization” of government-run industries was implemented to funnel wealth into IRGC front companies like the Khatam al-Anbia construction conglomerate. It can be estimated that today, the IRGC controls (in whole or partly) entities that make up over half of Iran’s gross domestic product.
These duplicitous privatization schemes have run consistently since Hashemi Rafsanjani’s administration. From 1991-2019, 900 state-owned enterprises have been transferred to the private sector. This is a total value of around 720 trillion tomans; more than 170 billion USD.
It is unclear where some of the counties’ 180 billion USD exports (2018/2019 alone) end up, according to the Iranian Central Bank. It is thought to be hoarded with the rest of the wealth belonging to the IRGC financial institutions and so-called ‘religious foundations.’
These establishments have seen a benefit in previous years with the rise of imports. The value of these imports grew from 16 billion dollars in 2005 to 90 billion dollars in 2011, which makes Iran more dependent on imported goods and provides the “private sector” and the IRGC partners with financial incentives to want to continue this growth.
These incentives contradict Khamenei’s public insistence on boosting domestic production to offset the so-called effects of western sanctions on America. In March 2020, Khamenei declared that a boost to production should be Iran’s top priority, despite the climate of Covid-19 making many forms of work, too dangerous.
Iranian Health Ministry reports over 60,000 covid-19 related deaths, however, the PMOI has deduced from hospital and morgue records that the death toll is more than a quarter of a million people. In addition, around 80 percent of Iranians are living under the poverty line and the exponential inflation and rising commodity prices extenuate the suffering. Pensioners have protested for months to draw attention to the fact that their income is below the rising cost of living.
Unrest is bubbling under the surface as the decimation caused by a coronavirus, meets the effects of a crumbling economy.