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Iran: Poverty And Misery And Regime’s 2021 Presidential Election

Iran: Poverty And Misery And Regime's 2021 Presidential Elections

This piece is part of our several articles covering the Iranian regime’s sham presidential elections.

Executive Summary

This article intends to review how Iran’s economic crises have pushed more people under the poverty line, encouraging them to boycott the regime’s sham presidential elections. The facts in this piece are basically the ones that the State-run media or regime officials have acknowledged.  The second part of the article presents the facts underlining that the country’s economy is on freefall and how the Iranian regime has destroyed Iran’s economy.  

Facts and figures

Iran’s clerical regime will hold its sham presidential elections in June. While the regime’s Supreme Leader Ali Khamenei, intends to have a large turnout to legitimize his regime, Iranians in their daily protests chant “We will not vote anymore; we have not seen any justice,” and “We will not vote anymore; we have heard enough lies.”  

Iran Expanding protests hint at what is to come

There are several factors why Iranian people call for the nationwide boycott of the regime’s sham presidential elections, such as oppression, economic crises, and people’s desire for a democratic country.  

This article intends to review how Iran’s economic crises have pushed more people under the poverty line, encouraging them to boycott the regime’s sham presidential elections, as they see the ruling theocracy as their true enemy. In the second part of this article, we intend to share some facts about how the regime has destroyed Iran’s economy.  

“The [sham] presidential elections have the unprecedented situation in terms of people’s unwillingness to participate,” wrote the state-run Mostaghel daily on Saturday, April 17.  

Now let’s look at the facts of underlining Iranian people’s dire economic conditions:  

1- “When the country’s average inflation for 52 years is a little more than 18%, it means that its 52-year inflation rate is 546845%,” said Abbas Akhundi, former Minister of Urban Development, on April 6. “When the growth of the country’s national investment for nine years is negative 6.8 percent, it means that this year’s investment has decreased to fifty-two percent compared to ten years ago,” he added, according to the state-run Eghtesadnews website. “The next year’s inflation rate will be higher than 40% of the [previous year]. This means absolute poverty,” Akhundi added. 

2- “In December 2019, Hossein Salahvarzi, Vice President of Iran Chamber of Commerce and Industry, ranked Iran 119th among other countries in the world based on a global report comparing countries in the framework of 9 indicators of business opportunities, education, health, security, individual freedoms, and quality of governance,” Arman daily added. 

3- “Our budget’s infrastructure is damaged. Look at the infrastructure of this year’s budget. It is record-breaking for its kind. It indicates there is a 36% difference between [public] salaries and expenses,” said Mohammad Bagher Ghalibaf, the Speaker of the regime’s Majlis, on January 24, according to state TV.    

4-     The Research Center of the Iranian regime’s parliament has prepared a report on the country’s economic situation. During its session on May 31, the new parliament of the mullahs has presented the report by Mohammad Ghasemi, the head of the center. The report is titled “Image of the country’s economic situation: Challenges and Strategies.” Its release was also widely covered by state media.  

5- According to Majlis Research Center’s report:  

– The first factor in the country’s economic decline is the fall in the national GDP. In straightforward terms, the gross domestic product is the total value of goods and services produced in a country over one year.  

– Severe inflationary tensions are the second cause of the country’s sinking into the black hole of poverty. The 41 years of religious dictatorship in Iran have been completely spent with inflation. According to official sources, the average inflation rate in the last four decades has been 20 percent, while the average inflation rate in the world has fluctuated at around 3 to 4 percent.  

– Iran has the fourth-highest inflation rate after Venezuela, Zimbabwe, and Argentina. One of the most important factors in the continuation of high inflation in Iran is the peak of liquidity, the volume of which has recently reached over 2500 thousand billion tomans (10 thousand times more than what it was in 1979), while the volume of national production at current prices has increased only five times.  

– In 2019, liquidity growth reached over 31 percent, while GDP fell by about 7.5 percent. This is the primary source of the collapse of the national currency and the people’s purchasing power, as well as the dramatic fall in the exchange rate of the rial against foreign currencies.  

Now in this situation, Iranians have to struggle to make their ends meet. One might argue that international sanctions on the regime have caused increased pressure on Iranians. But as regime officials have acknowledged and based on the information revealed by the Iranian Resistance, the regime’s corruption and wrong economic policies are the real cause of the current crisis.  

Facts:  

– “There is ‘Transnational’ corruption network in Iran, which operates in the unofficial market. Its annual trade value is $20 billion to $25 billion,” said Abbas Akhundi, the former Minister of Roads and Urban Development of Hassan Rouhani’s government, on February 8, in an interview with semi-official ISNA news agency.    

-- Akhundi underlined that this international corruption network has been formed throughout the last 15 years and reached its height during Mahmoud Ahmadinejad’s presidency. The network distributed over $100 billion among military institutions. Akhundi also underlined that “Iran’s economy is grappling with deep and institutionalized corruption.”   

– “We had $ 119 billion in foreign exchange earnings in one year. Last year, we had less than $ 15 billion in foreign exchange earnings, but we had inflation and skyrocketing prices in both years. Our problem is not lacking money, and we have problems even when we do have money. “On one side, there are mountains of wealth. On the other side, there is poverty,” Mohammad Baghaer Ghalibaf, the regime’s Parliament speaker, acknowledged on Monday, March 29, during the factional feuding, according to the state-run Khane-Melat news agency. 

– Hossain Raghfar, one of the regime’s economists, acknowledged the regime’s mismanagement and deception are the real damaging factors of Iran’s economy. “The problem of the country’s economy is not the U.S. or sanctions. The main economic problems are lies, deception, and blaming others for diverting the public mind from the bitter realities that domestic politics has brought upon the people,” Raghfar told the state-run Resalat daily on Thursday, October 15. “The United States has consistently been cited as the main cause of the country’s problems, while these problems are due to domestic performance. Imports of items such as saddles and toothpicks rose from $16 billion in 2005 to $90 billion in 2011, making the country more dependent and consumerist,” Raghfar added. 

Iran corruption: $4 8 bn. missing in Rouhani's government, the other side of poverty in Iran

In addition to some facts acknowledged by regime officials and economists, Khamenei and the Revolutionary Guards have dominated Iran’s economy through their financial institutions and the so-called private companies.  

Below is an excerpt of two detailed reports about the IRGC’s financial empire, published by the National Council Of Resistance of Iran (NCRI):  

“International sanctions were never the cause of Iran’s economic ills, which is why their lifting has not provided the cure. There are systemic, entrenched forces at play that have to do with the nature and sociopolitical roots of the political system in power today. Iran’s current chronic recession is primarily an outcome of a despotic regime’s dogged attempts to survive despite a hostile domestic environment. Its rule is constantly challenged by a population largely excluded from legitimate political representation or material economic benefits. [Two nationwide Iran protests in 2018 and 2019 are testaments to this fact.] 

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

This transformation is enabled by the regime’s constitution, adopted in December 1979. All of the principles and articles regarding property ownership either deny or subvert respect for private property. Article 44 constitutionally splits the entire economy into three sectors: state, cooperative, and private. The regime is granted legal justification to seize property by claiming “adherence to Islamic law,” protection of “public interests,” and “social justice.” 

Article 49, for example, grants the regime “the responsibility of confiscating all wealth” that the state considers being obtained through illegitimate means. As such, regime officials are unleashed in their large-scale and lucrative confiscation campaign. 

Starting in 2005, ownership of property in various spheres of the economy gradually shifted from the population writ large towards a minority ruling elite comprised of the Supreme Leader’s office and the IRGC. 

Over the past decade, this has been billed as “privatization,” and is how a significant portion of Iran’s economic institutions have been handed off to the Supreme Leader’s office and the security, military, and economic apparatus under his auspices. This so-called privatization campaign, which must be viewed as a decisive turning point, began in earnest in 2005 when Supreme Leader Ali Khamenei and the IRGC succeeded in closing ranks and stacking the executive with people who completely – at least initially – towed their line and shared Khamenei’s strategic vision for the regime. 

How privatization of major companies is destroying Iran’s economy

At this point, Khamenei began to implement a profound restructuring of Iran’s economy, particularly the ownership of a wide range of industries and institutions. 

The first took the form of an official directive issued by Khamenei in May 2005. The government was instructed to transfer 80 percent of its economic enterprises to “non-government public, private, and cooperative sectors” by the end of 2009. Among these were large mines, primary industries (including downstream oil and gas), foreign commerce, banks, insurance, power generation, port, roads, railroads, airlines, and shipping companies. By some estimates, close to $12B in shares were transferred over just three years, from 2005 to 2008. This compares to less than $1B from 1991 to 2004, a staggering 12-fold increase in a quarter of the time. 

The beneficiaries of the bulk of these transfers were the Supreme Leader’s office and its various tentacles, including the dominant Setad, the armed services, and the infamous bonyads (foundations). The implications of this stunning power-grab are better grasped because these institutions exercise virtually absolute control of all decision-making processes, legislative mechanisms, intelligence gathering, and access to significant budgetary commitments. As a result, major powerhouses have arisen, which now act as the main players and consequently the gatekeepers for western companies into the Iranian economy. 

The 14 powerhouses and large economic institutions that control Iran’s economy are as follows: 

The Headquarters for Executing the Order of the Imam (Setad) 

The Mostazafan (Oppressed) Foundation 

Astan-e Qods-e Razavi 

Shahid (Martyr) Foundation 

Emdad (Aid) Committee 

The Islamic Revolutionary Guard Corps (IRGC) Cooperative Foundation 

The Khatam al-Anbiya Construction Headquarters 

The Cooperative Foundation of the Bassij Force 

The Ghadir Investment Company 

The Armed Forces Social Welfare Investment Organization (SATA) 

Khatam al-Osia Construction Headquarters 

The Cooperative Foundation of the State Security Forces (NAJA) 

The Cooperative Foundation of the Army (BTAJA) 

The Cooperative Foundation of the Armed Forces Joint Chiefs of Staff (VDJA)” 

The vast and interconnected network of wealth and power in the hands of the Supreme leader is indicative of a sophisticated monopoly over the Iranian economy. Doing business with Iran is to do business with Khamenei and the IRGC. Simultaneously, the significant revenues from this monopoly enable and primarily fund the regime’s terrorism, intransigence, and regional adventurism. 

Meanwhile, the above facts and figures show that the regime is strategically unstable due to these developments to keep pace with the demands of a growing population and a young demographic. According to The Economist, “The Islamic Republic’s labor force is expected to grow by 2.5% annually in the five years to 2020, equivalent to about 3 million new job seekers. The problem is thorniest for young people and women, for whom unemployment stands at 25.2% and 19.7% respectively.” These figures are, in part, obtained from official and ultraconservative estimates. 

Conclusion 

The regime has plundered Iran’s national wealth to fund its illicit and malign activities, such as export of terrorism, racing toward a nuclear weapon, and manufacturing ballistic missiles. This is in addition to the regime’s institutionalized corruption, which devours billions of dollars a year. 

It is now becoming clear why Iranians are willing to boycott the regime’s sham presidential elections. 

This article could be summarized in the following points: 

– Iranians are grappling with poverty, which results from the regime’s wrong economic policies, corruption, and plundering the national wealth. 

– Iran’s economic crisis has no solution under the current regime, no matter who Khamenei selects. Because the regime is the real reason for Iran’s economic crisis 

– Since Khamenei and the IRGC dominate Iran’s economy; namely, the “private” section, doing any business with the regime will only fuel its warmongering and oppression machine. 

As the people of Iran continue their protests and call for a nationwide boycott of the regime’s sham presidential elections, the international community should support their desire and not recognize the mullahs’ sham elections.