Senior regime officials in Iran began the Persian calendar year on March 21 with promises to rein in the country’s economic crises. What we have seen to this day has been anything but that and Iran’s financial woes are mounting in an unprecedented fashion.
“Throwing money here and there will solve nothing,” regime Supreme Leader Ali Khamenei said on March 21. Regime President Ebrahim Raisi claimed to conduct “economic surgery” and bring rising inflation under control. “The government should not become addicted to throwing money all around,” he said on March 24, claiming to be addressing “the people’s expectations” to decrease inflation and improve the economy.
Less than two months later, the problems that have plagued the economy are nowhere near being resolved. Even preventing its destruction is also nobody’s concern. Iran’s economy is such an utter catastrophe that millions across the country can barely even afford bread.
Ten months into Raisi’s presidency we have yet to see any economic reform, let alone improvement. Senior regime officials claimed to prevent money from being splashed here and there to control inflation and tackle economic corruption. However, the question now is why has the bad situation worsened significantly and is spiraling out of control?
The truth is that despite their claims, Khamenei and Raisi are keen on further plundering the Iranian people as a medium to overcome the budget deficit. The resulting high inflation, skyrocketing prices, and expanding poverty has more people taking to the streets in recent anti-regime protests.
In economics, “splashing money” here and there has a negative impact on a country’s production and economic growth. Splashing money and/or uncontrolled banknote printing leads to the most basic goods being imported, rendering the stoppage of many, if not all, production lines. However, this is true for countries which enjoy proper infrastructures and strong economies. In such countries production brings revenue, leading to economic growth and, thus, better living standards for the population.
As a result, bringing an end to state subsidies in those countries that have a well-positioned economy with adequate infrastructures is considered a correct step forward. The resulting revenue not only makes state subsidies unnecessary but leads to better livelihoods for the people.
This principle (ending subsidies) in countries like Iran has the exact opposite impact, owing to the plundering nature of its two dictatorships of the Shah and the mullahs’ regime, lacking any meaningful infrastructure, and a non-productive economy relying mainly on selling oil and imports. And the reason lies in the fact that there is no production to create revenue.
Therefore, eliminating Iran’s subsidies will only push Iran’s needy population into utter poverty and further misery. And we’re talking about a country where at least 70 percent of its population lives in poverty and 12 million people are living in absolute poverty, meaning they sleep hungry at night.
Eliminating subsidies for basic goods, in an economy like Iran’s, will lead to rising inflation and skyrocketing prices. The people’s purchasing power plummets, leaving them more incapable than ever to buy even basic food necessities.
Khamenei, Raisi, and the regime’s Majlis (parliament) Speaker Mohammad Bagher Ghalibaf decided to cancel the subsidized currency exchange rate, providing them with $8 billion in one year alone. Money that was spent to provide for their domestic crackdown machine and terrorism abroad. Instantaneously prices of basic goods spiked, leaving millions of people unable to even purchase bread for their families.
Raisi’s bragging about bringing about major economic reforms and improvements is being criticized even by the regime’s own state media. “The knife of this surgical operation is a knife that has long been stained, leading to increasing inflation, deepening rifts among the society’s classes, and expanding poverty across the board,” according to a piece published on May 15 in the state-run Jomhouri Eslami daily.
Therefore, the claim made by Khamenei and Raisi of bringing an end to “splashing money” into the country’s economy, is none other than pursuing their main objective in the shadows while justifying their methods of stealing from the Iranian people.
