Thursday, July 18, 2024
HomeIran News NowIran Economy NewsReal Cause and Outlook of Iran’s Economic Crisis

Real Cause and Outlook of Iran’s Economic Crisis


When it comes to Iran’s economic crisis, many of the regime’s apologists, or those unaware of the mullahs’ institutionalized corruption, blame international sanctions. However, the facts and figures, acknowledged by regime officials and state-run media amid factional feuds, show how the regime has devastated Iran’s economy.

“The price of poultry, which has become one of the vital needs of Iranian people’s food basket, has increased. The price of poultry flies in the sky of expensiveness, despite promises by government officials. Today, [poultry] price increased by 4500 tomans. This increase of 4,500 Tomans increased the poultry’s price from 20,400 to 24,900 tomans. This skyrocketing price has taken another form in the free market and instead of resolving the poultry-distribution crisis, has worsened the situation,” wrote the state-run Young Journalist Club on Friday.

“Now poultry is the most expensive item among food items. The poultry price reached more than 40,000 Tomans in the second half of [the Persian Year of 1399]. After several weeks of denial and negligence of the Ministry of Jihad Agriculture and the Ministry of Industry, Mine, and Trade, the government was finally able to control the price to some extent by widely distributing strategic reserves of animal feed. Thus, the [poultry price] fell below 35,000 tomans, but still, this rate was more expensive than the approved price,” wrote the state-run Mashreq News on Friday.

“According to the latest report of Iran’s Statistics Center, the inflation rate for the twelve months ending March 2020 for the country’s households reached 36.4%/. The point-to-point inflation of food items in February reached more than 60%,” Mashreq News added.
But why people experience skyrocketing prices?

“The Ministry of Agriculture Jihad is illegally changing the approved price of poultry for the fourth time. Meanwhile, neither the price of animal feed and [poultry farmers’] wages nor other expenses have increased,” Mashreq News article adds, quoting Mojtaba Tavangar, head of the market regulation committee at the regime’s parliament.

“The government is behind 95% of the skyrocketing prices, but they blame the guilds and small business owners for avoiding being accountable,” said Gholamreza Hassanpour, head of the trade union Basij on Friday, according to Mashreq News article.

“Currently, in most provinces of the country, we face a shortage of live chicken supply, which has led to an increase in prices. The number of chicks in the last one-and-a-half months was 95 million, which did not reach the quorum, while it should be 110 million,” said Mohammad Ali Kamali, CEO of the National Poultry Farmers Union, on November 20, 2020.

Yet, in April 2020, videos from Iran showed over 16 million chickens being culled. The regime’s affiliates, mainly the Revolutionary Guards (IRGC), dominate Iran’s economy and profit from skyrocketing prices.

“The officials’ double standards [in treating people] and their lack of motivation about the [regime’s] ideals have caused misery in the country,” Mojtaba Zoulnouri, Chairman of the Security Commission at the regime’s parliament, said on Thursday, according to the state-run Tasnim Newsagency,

For instance, Javad Modallal is one of the regime’s affiliates who dominates Iran’s poultry industry. Modallal and his two sons, Saman and Peyman, have used their connections with the IRGC to dominate large parts of the country’s economy. They have a significant share in different industrial sectors like vegetable oil, cement, mineral water, tea, molten iron, and steel.

How the Islamic Revolutionary Guards Corps IRGC plunders Iran’s economy

In addition to the regime’s institutionalized corruption, another reason for the skyrocketing prices is the inflation rate. The rising liquidity rate is the reason for the skyrocketing inflation rate. The regime’s wrong economic policies are to blame for this rising liquidity.
“Speaking to Negar TV about the causes of rising inflation, Abdol-Nasser Hemmati, the Central Bank chief, has said: Let us be frank with people. In 2019 and 2020, parts of the government budget were financed by the National Development Fund’s foreign exchange earnings, or simply banknote printing, which would result in inflation. Yet, due to budget deficits, we could not do anything else,” Mashreq News wrote on March 28, 2021.

“We have said many times the government itself makes the currency more expensive, which will affect people’s livelihood. It should be noted that this increase in the exchange rate is a source of income for the government and has fragile consequences for people. In other words, it creates a dangerous imbalance for families and their livelihoods. The consequences [of this action] will affect the country’s economy for years,” said Hossain Raghfar, one of the Iranian regime’s economists, in an interview with the state-run ILNA news agency on March 1, 2021.

The economic and social crises have turned Iranian society into a powder keg. Therefore, the regime’s officials and state-run media express fear of another nationwide uprising.
“The Iranian society is grappling with crises. The intertwining of social crises has made living conditions difficult for people. In such a society, people are not able to resolve their issues through different social institutions, and [this trend] ultimately causes many social crises in society,” wrote the state-run Mashreq news on March 22, 2021.