HomeIran News NowIran Economy NewsState Media: Iran’s Economy Plagues With Super-Challenges

State Media: Iran’s Economy Plagues With Super-Challenges

Due to the regime’s inhumane covid-19 policy and corruption, people are suffering from both the economic and Covid-19 crises. 

According to Iran’s state-run media, based on engineered statistics by the regime’s financial institutions, Iran’s economy is entangled by super-challenges. What has caused the current economic recession, sanctions, or the regime’s corruption?

“Since the [1979] revolution, the economic situation has never been this complicated, as it has been in the last decade,” the state-run Donya-e Eghtesad wrote on September 5. The prices of basic needs of people continue to skyrocket. “Each kilo of Iranian rice was sold for 46,500 tomans last month,” wrote the state-run Setare Sobh daily in this regard on September 5.

“Due to the growth of unemployment and inflation, Iran is among the most miserable countries in the world,” wrote the state-run Jahan-e Sanat daily on September 4.

“Super-challenges plague Iran’s economy, and if they are not fundamentally addressed as soon as possible and fundamental and structural reforms are not made in the structure of our economy, the situation will become more complicated. Then, it may not be easy to manage its social and political consequences,” Jahan-e Sanat wrote, acknowledging that Iran’s economic crises would have severe consequences for the regime.

“According to data published by the Central Bank, Iran’s national per capita income in 2020 was about 4 million and 820 thousand tomans, which is 35% lower than the national per capita income in 2011,” the semi-official ILNA News Agency on September 7.  ”As far as we are concerned, some countries, such as Azerbaijan and Kazakhstan, are also ahead of us. Urban and rural households spend on average about 25% lower on food than in 2011,” ILNA adds.

“Over the last ten years, the trend of gross fixed capital formation has been about 2.7% negative on average annually. In the last two years, the consumption of fixed capital has exceeded the gross of capital formation, which indicates the net decline of the real production capacity of the country for the coming years,” Donya-e Eghtesad wrote on September 5.

“In addition to all the unfavorable trends in the basic items of the country’s macro-accounts, the infrastructure capacity and inventory of Iran’s goods have also decreased in recent years. Thus, the stability and resilience of the country’s economy in providing livelihood and meeting the basic needs of society have declined sharply,” Donya-e Eghtesad adds.

The Iranian people are the ones suffering from the current economic crisis. The Covid-19 outbreak and the regime’s inhumane policies have amplified people’s livelihood problems. Among all sectors of society, the Iranian workers suffer the most.

“More than two million contract workers are not included in government support programs and deprived of insurance. The Covid-19 outbreak has been their coup de grace,” wrote the state-run Sharq daily on September 7.

“It soon became clear that the impact of the pandemic on workers’ lives would be greater. At the same time, in February 2020, many employers did not renew the workers’ contracts or deprived them of the opportunity to continue working the following year. In the first quarter of 2021, more than 1.2 million workers lost their jobs,” Sharq adds.

“The rate of subsistence basket has reached eleven million tomans, and workers live about 19 days of each month without any allowances and expenses. All the economic data show that the people’s table is shrinking. Even rice and dairy products are disappearing from the weekly shopping cart of Iranians.”

As the Covid-19 crisis deepens in Iran, more Iranians suffer from its economic consequences. “The staggering costs of treating the disease and the astronomical rise in hospital bed prices and medicine have impoverished at least more than 3 million people in the past 19 months,” wrote the Arman daily September 4.

“Statistics from the Ministry of Cooperatives, Labor, and Social Welfare also show that before the coronavirus outbreak, Iranians paid 35% of their total medical expenses out of pocket, which is 18% in the world,” Arman adds.

“An inflationary Tsunami has further pushed back the programs to control Covid-19 in the country. Amid the crisis, medicine and oxygen are scarce, and many patients die at home due to their inability to pay for medicine and treatment. The cost of hospitalizing patients in private and non-governmental hospitals has also skyrocketed,” the state-run Arman daily adds.

The Iranian regime’s new government has started working last week. Would Ebrahim Raisi and his administration resolve Iran’s economic issues?

“The experience of Hassan Rouhani’s government has led the people to conclude that it is not a matter of changing individuals, it is a matter of changing the approach in the political structure. Unfortunately, the new government does not have the necessary social capital behind it. Despite the decline in the welfare of Iranians, there is no clear horizon for the living conditions of households,” Jahan-e Sanat wrote in this regard on September 4.

The Iranian people’s boycott of the regime’s sham elections in June was a clear sign of the mullahs’ unpopularity or lack of social capital. Besides, it also revealed that Iranians do not believe the ruling theocracy could resolve their issues.

Jahan-e Sanat explains that for several reasons, Raisi is unable to resolve Iran’s economic crises:  “The inflation continues to rise, and there is no deterrent to stopping prices the growth rate of wages is not commensurate with the growth of rising prices.”

“Getting out of this misery and creating public welfare is only possible through controlling inflation. But we must know that inflation is not the cause itself. Still, the cause of factors such as unemployment, lack of production, negative economic growth and high levels of spending as well as low levels of income,” Jahan-e Sanat explains.

“With zero production rate, we are subconsciously moving towards increasing liquidity, which in turn leads to skyrocketing prices and inflation. Over the past few years, the average annual liquidity growth has been 30%. This means that the country’s financial cycle is not working properly,” Jahan-e Sanat adds.

The regime started rampant banknote printing to compensate for its budget deficit. Thus, Iran’s liquidity rapidly increased, and since it was not per the national production growth, it resulted in inflation and skyrocketing prices.

Yet, the regime’s institutionalized corruption has created and is aggravating the economic crises. While workers and other sectors of Iran’s society suffer from poverty, regime officials receive astronomical salaries.

“The majority of astronomical salaries relate to companies affiliated with insurance and pension funds, which are considered state-owned. For example, three managers of the Secretariat of the Supreme Council of Free and Special Economic Zones receive more than 53 million Tomans. One of these managers, whose (gross) salary was 44 million Tomans in June, has received an extraordinary 7 million and 935 thousand Tomans in one month and another 22 million Tomans bonuses,” ILNA News Agency acknowledged a minor case of corruption in the regime.

So how could anyone expect Raisi and his government could resolve Iran’s economic issues. Raisi was the head of the Astan-e Quds Razavi, a huge financial institution with billions of dollars of assets, and belongs to the regime’s Supreme Leader Ali Khamenei. This institution is used to fund terrorism.

Besides, many of Raisi’s ministers are known for their corruption cases. For example, Rostam Ghasemi, Raisi’s Roads and Transportation Minister was involved in a major corruption case while serving as Mahmoud Ahmadinejad’s Oil Minister.

Iran’s economic crises are created and amplified by the regime. Thus, the regime officials would not have nor be willing to propose any solution to the current situation. This, in return, has increased society’s restiveness with daily protests by people from all walks of life.

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