by Azita Carlson
A large number of investors and domestic deposit holders have lost millions in Iran. Banks have collapsed, there have been several bankruptcies, financial institutes are in chaos and the social security system is in tatters.
This is reminiscent of the situation in Egypt during the eighties and nineties when religious parties looking to invest money established financial institutions. They made hundreds of millions of dollars, but the institutions gradually started to disappear. Along with the funds.
The situation in Iran is worse because the institutions became official and the collection of funds was made legal. This is why the people of Iran are so angry. Inflation is spiking and poverty and unemployment levels are increasing.
Around half of the population is said to be living under the poverty line and it is expected that this will rise even further in the next few months as the economic situation deteriorates.
The people took to the streets in protest at the end of last month because they cannot put up with the corruption they see on a daily basis.
Billions of dollars are plundered abroad on the financing of terrorism and extremism and on supporting numerous militias and proxy group.
The Iranian people are the first victims in this whole situation. Also affected are the millions of people that have been displaced from their homes, most notably in Syria, because of the Iranian regime’s meddling abroad.
Furthermore, hundreds of millions of dollars’ worth of deposits from Gulf states – mainly Kuwait – have been lost. The fact that these wealthy nations took the risk to invest in the first place is puzzling. They are stable countries with billions in foreign capital, so investing in a poverty-stricken and corrupt nation that has a chaotic leadership has baffled some.
Furthermore, Iran already faces numerous international banking restrictions.
Greed has probably played a big factor. The failed banks were offering interest rates of around 30 per cent – thirty times more than international currencies elsewhere in the world.
However, the fact that these nations have invested heavily in Iran, and lost a fortune in the process, can only – hopefully – serve as a deterrent for others who are also tempted to invest.
Whether it will happen again in Iran is unknown. Common sense would say that it wouldn’t, but greed seems to make people forget about what happened in the past, for example in Egypt.
European countries have expressed an interest in investing in Iran but it would be more prudent for their time to be spent on ensuring that some sort of order is returned to the nation first.
The Iranian regime denies its people of freedom, democracy and human rights.
These are fundamental values in Europe and they should not be brushed aside to carry out business deals or financial transactions. Any money poured into Iran will probably not be spent on the people, but plundered on illicit activities outside its borders.