Editorial: Iran Regime’s Attempts to Manipulate Economy
The Iranian economy is under a lot of pressure because of the crippling economic sanctions the Trump administration has put in place. Iranian government officials are being tasked with altering the economy so that it does not appear as dire as it really is.
Several officials have been given the task of artificially showing a low rate for the U.S. dollar despite the fact that trading is at a standstill.
The regime has tried to portray the U.S. sanctions that were implemented at the beginning of the month as being ineffective. However, the artificial reports it is responsible for will not be able to continue being effective for much longer.
The artificial elements come from a number of different strategies. One such way to pump up the figures is through taking millions of dollars from the banks and putting it into the market. This is one way to counter the initial effects that came from the sanctions, albeit artificially.
Putting money into the markets and using bank overdrafts is not a tactic that the Iranian regime will be able to use for much longer because the economy is in an extremely delicate situation. Very little trading is being done in the country so it is in no way feasible that the economic situation is stable.
The Iranian regime is losing control of the economic situation and it knows that its current strategy has a very short expiry date. It can only deny the existence of a crisis for so long. To try and regain some of the control that is gradually slipping away, the authorities are enforcing even more suppressive crackdowns on the public.
The people of Iran have been protesting for almost a year. The domestic unrest is in a very delicate position because further explosive protests threaten to break out at any time. The people have been calling the regime out for its widespread corruption and mismanagement of the country’s wealth. However, instead of taking measures to improve the situation, it is reacting in the only way it knows how – with further suppression and violence. Several people have been executed for financial crimes but it is nothing that is going to improve the lives of the people in the immediate term and it certainly won’t undo all of the damage that has already been done.
It is expected that inflation in the country will rise by 40 per cent. The unemployment rate is also expected to increase significantly over the next 12 months. This year, according to the International Monetary Fund (IMF), Iran’s GDP will be at 1.5 per cent negative and during the course of next year it will get worse and reach 3.6 per cent negative. However, it must be noted that these estimates are based on official government figures. Considering that the official figures are accurate, the estimates are also not realistic.
The economic pressure on Iran by the Trump administration is having the intended effect so far. In the longer term, it is important that pressure is maintained and that it is given no leeway.