{"id":337881,"date":"2025-10-05T15:42:31","date_gmt":"2025-10-05T14:42:31","guid":{"rendered":"https:\/\/www.ncr-iran.org\/en\/?p=337881"},"modified":"2025-10-05T15:42:31","modified_gmt":"2025-10-05T14:42:31","slug":"irans-command-economics-corruption-and-the-costs-of-isolation","status":"publish","type":"post","link":"https:\/\/www.ncr-iran.org\/en\/news\/economy\/irans-command-economics-corruption-and-the-costs-of-isolation\/","title":{"rendered":"Iran\u2019s Command Economics, Corruption and the Costs of Isolation"},"content":{"rendered":"
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File photo: A crowd gathers outside a local money exchange shop amid mounting currency instability and the collapse of the Iranian rial<\/figcaption><\/figure>\n

Four-minute read<\/em><\/strong><\/p>\n

Iran\u2019s economy is not just slowing; it is being de-tooled by decree. As international isolation deepens after UN snapback, the state is answering market signals with administrative commands\u2014price caps, currency suppression, forced \u201cunity,\u201d and politically convenient showpieces like zero-removal from the currency. The result is a feedback loop of scarcity, rent-seeking, and public distrust that weakens both firms and households.<\/p>\n

When orders replace prices<\/h2>\n

A business forum<\/a> in late September 2025 (\u201cBarriers to Enterprise in Iran\u2019s Economy\u201d) put a name to what firms have lived for years: the \u201cprice-control trap.\u201d Economist Mousa Ghaninejad argued the policy rests on a basic misunderstanding: \u201cIf policymakers understood how a market works, they would never make this mistake; and if they do understand and still continue, that is demagoguery.\u201d He warned that state dictates have even blocked producers from lowering prices, turning a tool claimed to fight inflation into a mechanism that destroys production and breeds rent. Prices, he noted, are information; when the government replaces them with orders, it breaks the economy\u2019s compass.<\/p>\n

From the technology sector, Hesam Armandehi (founder of Divar\u2014an Iran-wide online classifieds platform similar to Craiglist) described how start-ups<\/a> lost a decade to security-state rulemaking: \u201cWhile the world lets markets set prices, in Iran even online advertising gets a directive that your profit must not exceed 15 percent.\u201d The contrast he drew was stark: peers in the United Arab Emirates became billion-dollar firms, while Iranian founders moved capital and talent abroad to escape a \u201csecurity-minded, illogical state.\u201d<\/p>\n

Another state-affiliated economist, Ali Mirzakhani widened<\/a> the lens to currency policy: \u201cWhen the state suppresses the exchange rate to hold down import prices, it hits domestic production and sets up the next inflation jump.\u201d Echoing mainstream monetary theory, he underlined that Iran\u2019s inflation is fundamentally monetary, yet money printing and ad-hoc controls continue\u2014delivering chronic stagflation, not relief.<\/p>\n

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A Nation on the Brink: #Iran<\/a>\u2019s Economy Nears Total Breakdownhttps:\/\/t.co\/vGWSKMuzub<\/a><\/p>\n

— NCRI-FAC (@iran_policy) June 9, 2025<\/a><\/p><\/blockquote>\n