Iran: Economic, security risks threatening the regime’s future

Analysis by PMOI/MEK

Iran, October 25, 2021—Iran is the only country in the world that has had double-digit inflation rates for more than four decades, economic experts believe, leading to the rapid spread of poverty and the destruction of economic and social structures.

As popular protests spread across the country, regime officials are going the distance to claim that there seems to be a prospect of resolving the people’s livelihood crisis. However, despite the people’s distrust, authorities are doing nothing but convening various meetings and talking about generalities.

“In coordination with different branches of the government, the judiciary and the parliament that are in this council and this meeting, as well as private sector activists, God willing, this path will move us in the coming months to accompany the private sector with an approach appropriate to our economic conditions,” said Mohammad Reza Pour-Ebrahimi, Chairman of the Economic Commission of the regime’s Majlis (parliament), during a virtual meeting on October 19 with the Ministry of Economy and the private sector, according to state TV.

 Government officials in various meetings, including the Economic Coordination Council and the private sector, claim they have found the key to resolving the crisis by cutting off the Preferential Exchange Rate for basic goods and paying them directly in the form of credit cards to disadvantaged people.

During the same meeting, Economy Minister Ehsan Khandouzi discussed “the replacement of consumer credit cards instead of allocating Preferential Exchange Rate, adding that the government agrees with reforming Preferential Exchange Rate procedures.”

Many economists have previously warned that eliminating the Preferential Exchange Rate would mean skyrocketing prices, and rising commodity prices resulting in people’s table decreasing significantly.

This time around, the regime’s economic crisis has a taken different form and the issue cannot be “resolved” by merely increasing or decreasing the Exchange Rate. Various state-run media outlets have gone as far as voicing concerns of regime overthrow and warn the ruling establishment that manipulating the Exchange Rate and unbridled inflation “will have render severe security and social consequences in addition to widening the class gap,” according to an October 19 report published by the Farhikhtegan daily.

On October 19, the state-run Jahan-e-Sanat daily published an article titled “A Look at the Crisis-Creating Phenomenon and Its Effects on Iran’s Economy.” While referring to the crises and challenges created between the regime and neighboring countries, the piece concludes that the mullahs’ regime is being swept away by regional countries and an ideological-economic siege has painted a darker outlook for the mullahs’ future.

“The important part of the story is that the greater the risk, the harder it will be to cure… Iran’s economic challenges have become so deep that we really can’t do much to cure it in a short period,” the Jahan-e-Sanat piece continues.

“The gap created between the government and the people has paved the way for a national movement and unity. It is only natural that in a polarized political atmosphere that any crisis transforms into a political and factional conflict. In fact, security and politicization are the consequences of this fragmentation of the power structure in facing the crises.”

 Regime economists are warning of the consequences resulting from the widening class gap, parallel to national uprisings, with phrases such “security threat” or “disintegration of the power structure.” However, when it comes to the reality of Iran’s socio-economic crises, those regime’s officials who are closely involved and for years have tested the depth of corruption and inefficiency, are far more explicit in their choice of words.

“The devastating flood of inflation in the second half of the [Iranian calendar] year [from September 23 to March 21, 2022] is likely to have different consequences for the economy. The situation we are in is very difficult and complicated. With this large amount of liquidity accumulated in the Iranian economy, we may be on a very dangerous path, which I deliberately do not want to refer to with current literature,” said Masood Neeli, former secretary of the Government Economic Coordination Task Force. “I have not see any other period as dangerous as today in terms of inflation. These floods can destroy us all,” he added, according to an October 19 report by the state-run Hamdeli newspaper.

The regime has milked the country and the people out of their last rials [Iran’s national currency], and today, the public has nothing to lose. This is the reason behind continued protests across the country despite the regime’s ongoing oppression.

The regime is playing with duplicitous claims about fighting corruption. And of course, the Iranian people do not expect a plan or an actual solution from the regime.

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