The Iranian economy has not lived up to the expectations sold to the Iranian people, when Rouhani brokered the 2015 nuclear deal and the lifting of various secondary sanctions that impacted civilian life. The growth of international investment has not increased substantially and unemployment remains high at 12.7%, particularly among the young people.
Yet, the mullahs are leading lives of wealth and power, reflecting the corruption that is rampant throughout Iran’s economy. Throughout the country, there are communities of desperately poor human beings, many living in shelters made from cardboard or scraps of polythene. These are just a sampling of those who are suffering in Iran, but it isn’t limited to the homeless.
Protests are being held in the streets over what people call “miserly wages” that are paid to workers, which amount to three times less than the poverty line. But while the evidence isn’t there in the lives of the everyday Iranian, the International Monetary Fund (IMF) indicated that Iran’s economy has made an impressive recovery after the 2015 nuclear deal.
It is estimated that hundreds of millions of dollars are already pouring into Iranian coffers from frozen assets that have been released, and this amount could eventually total $150 billion. Instead of it being earmarked for programs to assist average Iranian citizens, billions have already been earmarked for military purchases from Russia to grow the Iranian military. On top of these expenses, there are the costs for supporting Hezbollah in Lebanon, the initiative in Syria, and the financial support and weapons for terror groups in the Gaza Strip and Yemen.
Khamenei has shown his dissatisfaction with Rouhani, called for Iran to develop a “resistant economy” focused on becoming more self-sufficient versus depending on international investment.
“One of the pledges Rouhani made was to provide such welfare and success for people that they no longer seek subsidies. Four years later, when people look at his slogans and evaluate how much has truly been accomplished, they see Iran’s economy, 100 days after this president came to power, remains a mess; unemployment has especially skyrocketed amongst the youth; and the economic recession has deepened,” said Iranian MP Naqavi Hosseini in remarks aimed at the Iranian President.
While Iran is in the throes of the biggest political, social, and economic crisis of its recent history, all through the mismanagement of the economy, and its leadership’s incessant greed, the mullahs are insuring they have a nest egg for retirement, or money put aside should their corrupt empire be overthrown, requiring a quick exit from the country.
“The continuation of such bad economic conditions is not good for society. We are on the verge of a cliff. Major action is needed and there is not time to check or test anything. The government must answer as to why the $5 billion they were supposed to unfreeze after the Lausanne is now frozen in Oman,” said Iran’s former oil minister.
There is also evidence of a deepening recession, while inflation continues to grow. One Iranian official noted that those in charge have created jobs for foreigners, while others noted that it is bad when Iranian gas is more expensive than imported gas.
Even bold international investors are hesitating to do business in Iran, in part because of U.S. sanctions that remain in place. Total is investing in Iran, but carefully to avoid running afoul of any rules. This means no Americans on Iranian projects and it must be careful to not do business with sanctioned Iranians or their companies.
While the Iranian oil and gas reserves are large, the geopolitical landscape makes it difficult for companies to feel comfortable making investments in Iran. Plus, tough talk from Washington and the possibilities of additional sanctions have raised concerns that opportunities in Iran will disappear.
But along with these issues, doing business with Iran has been reported to be difficult with banking restrictions in place, corruption, and strong political opposition to letting foreigners invest in Iran.
International figures are also called Iran out for its purchases of weapons for other factions within the region, especially those in countries that are suffering from various levels of instability. Essentially, if Iran has the money for that, then why don’t they have the money to invest back into their own economy?
But even this boasting of military might could be a bluff by Iran, whose leaders have toned down various anti-American rhetoric. “The slogan ‘death to America’ has disappeared almost entirely from the official discourse of the regime spokesmen, including Iranian Supreme Leader Ali Khamenei himself, as have public burnings of the American flag,” according to a report by the Middle East Media Research Institute (MEMRI) published in March. The report also calls Iranian claims of domestic development of military technologies are “complete nonsense”.
“Iran does not create any quality military equipment, they only are able to buy from abroad,” said Yigal Carmon, the president and founder of MEMRI. He noted that they are regular customers of North Korean missiles.
Evidence also exists that Iran may have overextended itself in Syria, where it is spending $6 billion annually to support Assad, according to the Bloomberg News. Clearly, Iran’s economic woes are not disappearing, just because some of the sanctions have been lifted.