Iran’s economy is stuck in a swamp

Analysis by PMOI/MEK

Iran, April 30, 2021—For nearly a decade, economists in Iran have been describing Iran’s poor economic situation.

Farshad Momeni, an economist, believes that this situation began in the country in the 90s and today we have reached the stage of “progress in swamp.”

“When we say a collapsed economy, some people think the collapse of an economy is like the collapse of a building,” Momeni said, according to an April 28 report by the Eghtesade Puya daily. “The collapse of the economy is not like this but is that development-oriented trends give way to declining process. It does not mean that Iran will be wiped off the earth, but the quality of people’s life will decline catastrophically. The fate of producers is becoming more catastrophic, and inequalities, corruption, and moral crises are intensifying. We call this a collapse.”

Like other domestic and foreign analysts, Momeni admits that in the contemporary economic history of Iran, the 2010s has become a lost decade and the most unprecedented jumps in inflation, currency depreciation, production decline, and investment have occurred:

“Everyone knows that when the Planning and Budget Organization officially reports in 2021s plan that at the turning point of 2019, all the investments made in the country are not even able to compensate for the depreciation of that year (according to the Jamaran website, April 28), this hints the process of collapse. When the Statistics Center reports that the food consumption in the country has dropped dramatically, this is a sign of disintegration and collapse. This is not like a building’s destruction, but it is worse. Official reports from the Planning and Budget Organization and the Ministry of Industry state: ‘We are facing a terrible decline in the productive force and the exchange rate over the past two decades has declined to one-half to one-third of what it was in 1988, which was the worst and weakest year of economic performance in the first ten years after the revolution.’ When nearly a trillion dollars of oil and other resources of the country have been sold but economic growth is close to zero, it is collapsing the country’s economy.”

National economic confusion

This economic collapse is reflected in the media and in the circles of government-linked economists, and everyone acknowledges it. These days, the regime is stuck between the upcoming presidential elections and negotiations on its nuclear program, and it has very little maneuver space.

“These days, Iran’s economy is stuck between negotiations and elections, and no one seems to care about the minutes and hours we need to return to the per capita income point of 2011. We are confused about the national economy,” the state-run Ebtekar daily wrote on April 28.

Disorder syndrome in economics

There was a time when regime’s officials claimed that problems could be fixed with the proper management of oil income. Interestingly, during the presidency of Mahmoud Ahmadinejad (2005-2013), more than $ 700 billion went into the officials’ pockets and nothing was left for the people. Today the talk is about the government looting the property of people and future generations.

“A look at the managerial approach and behavior in all post-revolutionary governments shows that having or not having high incomes, especially oil revenues, has no effect on improving economic conditions, as can be seen in the Ahmadinejad and Rouhani administrations. In Ahmadinejad’s government, where we saw the highest oil prices and as a result our country received large revenues from the sale of $140 per barrel of oil, nothing special happened,” Tejarat daily wrote on April 27.

In Iran, more than 85 percent of the economy is in the exclusive control of the government. This shows that there is no planning and stability in the Iranian economy.

“We see that we have not had a good vision and planning for production and producers, and the production sector has always been confused. On the other hand, the high statistics of capital flight show how inefficient we have been in removing barriers to production,” according to the Tejarat daily.

The need for deep surgery in the economy

In this situation, of course, there are some parties that only point to some parts of current crisis and still hope to find a way out!

“The head of the Shiraz Chamber of Commerce, referring to the Supreme Leader giving economic names to years for the past 11 years, said: ‘Despite this, unfortunately, there has been no change in the country’s economy, but we have gone back,’” according to an April 27 report by the Gostaresh News.

Gostaresh News further writes: “In the 21st century, our people must stand in line for hours to buy chicken and a bottle of oil, and they lose their lives due to the lack of vaccines, and these are the result of incorrect railings in the economy. The country’s economy need a deep surgery.”

Politics with an empty treasury

The regime’s economist are now talking about politics with an empty treasury out of fear for the future of the regime.

But the staggering budget deficit of different governments sends the message that the game is over. Nothing comes out of the ballot box except failure and regret. Mohsen Jalalpour, the former head of the Chamber of Commerce, says that the Iranian economy is entering 2021 and an election race that is significantly different from previous periods. Among other things, the government is facing a budget deficit that is unprecedented in the history of the country. Oil revenues are no longer the same as they used to be to cover up the disastrous economic situation.

The Darayan website wrote on April 27: “Currently, the economy is in one of its worst times and the Iranian people are facing the deepest and longest stagflation in the country’s economic history. The future government will not only inherit the debts and budget deficit of the previous government, but due to the uncertain conditions of the sanctions, it will have no clear prospect to cover its expenses and repay its stacked debt.”

Now, while regime officials are fast busy blaming each other for the problems, when it comes to the people, they are fed up with the corrupt regime in its entirety.

“If governments make gross mistakes and distance themselves from the people and there is a crisis of trust between them, the country’s current expenses will increase to such an extent that it will lead to the collapse of the government,” Eghtesade Puya warned in its April 28 report.

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