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What is the root of Iran’s economic problems?

Analyses by PMOI/MEK


Iran, Dec. 7, 2018 - It’s been little more than a month since the U.S. re-imposed new sanctions against the Iranian regime. Shedding crocodile tears, the dictatorship ruling Iran is trying to whitewash its crimes against the Iranian people and portray the sanctions as illegitimate pretending that sanctions are against the Iranian people alone and do not affect the regime’s destructive activities both inside the country and across the Middle East.


One of the Iranian regime’s attempts was to bring some so-called celebrities to its defense. To their credit, these actors and actresses acted their role well as paid hands of the Iranian regime. Videos of celebrities alongside with a child suffering from cancer went viral on social media, with the full support of the regime’s propaganda machine. Iranian social media users quickly reacted against these so-called celebrities. Users challenged the celebrities, asking where they were when different strata of the society were protesting against regime corruption and unpaid wages, and why were they just raising their voices in support of the government.


However, every nation that has experienced a dictatorship in its history can remember those celebrities who support the dictator by taking part in its propaganda. Leni Riefenstahl was one of the most recognized talented and innovative German actresses and directors in 1930s. Although her films enjoyed worldwide attention as the most effective, and technically innovative, propaganda films ever made, she significantly damaged her career and reputation after the WWII due to her support for German dictator Adolf Hitler.


The regime’s propaganda against new international sanctions is focused on health care and the economic situation of Iranian people as if the regime cares about the Iranian people’s health and lives.


To clarify the issue, I just want to draw your attention to some figures and facts and see whether the problems of the Iranian people are rooted in economic sanctions or in the regime’s own destructive agendas.


Let’s see where the money goes in Iran and what it’s spent on. Is the country’s wealth being used to solve the fundamental problems of the people?


Nuclear project

The nuclear project was one of the most significant domains where the regime squandered Iran’s wealth during the past decades.


At the time that many countries are trying to phase out of nuclear power due to its inefficient long-term benefits and the increasing costs of such sources, the Iranian regime insists on continuing the nuclearization process.


According to the study of Vienna Environmental Ombudsman, “Only very new nuclear construction projects are completed during the scheduled cost and time limits – many overrun their planned budgets and construction time many-fold (Greenpeace 2013). In the past decade, the construction costs for NPP increased many-fold, sometimes even by a factor five (Böll 2010).”


“The Massachusetts Institute of Technology calculated the increase of construction costs of 15% per year (MIT 2009 as Update of MIT 2003). The overnight costs in the basic scenarios increased in this comparison from 2,000 to 4,000 US$/kW (MIT 2009),” the report added.


In addition, Christof von Branconi, the Tognum director responsible for the group’s onsite energy business, stressed that Europe will stop using nuclear power in the near future, “We carried out a study with the German Association of Machine and Plant Manufacturers into what the energy mix in Europe will look like in 2030. In 2007, the nuclear energy share was 28 percent. That is predicted to be 19 percent in 2030,” he said.


A report by Deutsche Welle proves the same fact. According to Deutsche Welle, independent energy expert Olav Hohmeyer says Germany could switch to green energy completely by 2030.


In this situation, the Iranian regime has invested billions of dollars in the nuclear project. Mohammad Jahromi, Iran’s minister of labor and social affairs from 2005 to 2009, revealed that “The Nuclear project cost Iran $160 billion every year.” (Sharq state-run newspaper)


Alireza Kafshkonan, the head of the governmental electricity community told the state-run news agency ILNA that constructing a 2-megawatt wind farm will cost $3.5 million in Iran. However, the Sputnik news agency reported in September 2016 that Iran and Russia signed a contract worth $10 billion for building two new units for Bushehr nuclear site – these two units will be completed after ten years and are supposed to produce 2,000 megawatts.


Moreover, in September 2017, the Telegraph reported, “A UK investment fund is set to build one of the world’s largest solar power projects in the world in Iran by the end of the decade.”


“The deal between Quercus and Iran’s Ministry of Energy is worth over €500m (£440m) and will bring forward a giant 600MW solar project within the next three years by building a 100MW standalone installation every six months,” Telegraph added.


It goes without saying that the investment in renewable energies is more efficient than on dangerous costly nuclear projects. However, Iran owns vast oil and natural gas sources that can provide Iran’s power at lower costs.


But as the Iranian resistance has revealed the regime’s plans time and again, the fact is that the regime has imposed all these heavy costs on the Iranian people to seek its bomb-making ambitions and to stabilize its dictatorship in the region.

Bushehr nuclear site

Bushehr nuclear site


Studying the regime’s budget comparison

According to the official reports by the Iranian regime, the government’s budget for the fiscal year 2018 is more than $341.4 billion. In December 2017, the state-run news website Tabnak published the military and security budget of 2018. According to Tabnak, the annual military and security budget of the Iranian regime increased by more than $4.021 billion. As a point of reference, the budget for 2016 was approx. $13 billion.


Studying the healthcare budget, the health ministry’s spokesman Iraj Harirchi told the state-run news agency ISNA in April 2017 that the healthcare budget was $8.9 billion for 2016 while the government spending for the year was $338 billion. In December 2017, Masoud Abolhalaj told ISNA that the total healthcare budget for 2018 fiscal year equals $6.4 billion.


The result is that in 2018, the Iranian regime's military and security budget increased by 33% year over year, accounting for 4.7% of government spending, as compared to 3.6% the previous year. But in the same period, Iran's health budget decreased by 40%, from 2.6% of the government budget to 1.8% of the government budget.


In addition, in December 2017, Ahmad Hamzeh who is a member of the health committee in the regime’s parliament declared, “In 2018, the construction budget for Iran's health ministry decreased by 41%.”


In December 2017, the deputy minister of health told the state-run ISNA news agency, “In 2018, the budget of family doctors decreased by 50% in comparison to 2016.”


The situation in the ministry of education is very similar. The “Voice of the teacher” (Seday-e Moalem) state-run website wrote an article titled “Is there any difference in 2018 budget for the ministry of education?” The article compared the budgets of 2017 and 2018. According to the article, “In 2017, the ministry of education was allocated 9.8% of the government's budget, but in 2018, that figure declined to 8.4%.”

The regimes missile lunching

The regime's missile launching



What did the mullahs' regime achieve for the Iranian people in 40 years?

Are foreign nations to blame for Iran's economic problems? Or are the problems the result of corrupt policies?


To understand what the mullahs achieved for the Iranian people in their 40-year rule, let's compare South Korea and Iran during the past 40 years. It is worth mentioning that in 1979, when the mullahs rose to power, Iran had a population of 37.2 million compared to South Korea’s (SKR) 37.5 million.


According to the World Bank data, in 1979, Iran's per-capita incomes was $6,859 which was twice that of South Korea. However, it should be mentioned that Iran has large oil sources, mines, etc. and in the past 40 years, Iran has had more than $2,000-billion income from oil exports alone, while South Korea has had none of those sources of income.


But in 2017, while Iran had $6,947 per capita when at the peak of its oil exports, South Korea had $26,152 per capita, again without any oil sources.



According to Khooshehay-e Kasbokar state-run economic website, “In 2006, 18% of Iranian people were under the poverty line, but only 2% of Korean people were under the poverty line at the same time.”


The conclusion is clear. Do the math. The regime does not spend the revenue from Iran's oil exports on the Iranian people, but to fund terrorism, domestic suppression, and to build weapons of mass destruction.


Sanctions are just a tool for mullahs to distract the public opinion and to cover up their own corrupt policies and political agendas.


So, who's to blame for the economic problems of the Iranian people?



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