Economy

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Organized corruption
Why the Iranian economy is almost beyond repair

April 12, 2001
The Iranian

"It's the economy , stupid !"

Bill Clinton's 1992 electoral slogan seems quite apt for Iran's present predicament. Indeed, all reports about Iran speak of dire economic difficulties, if not total disaster.

One often hears that since the 1979 revolution things have gone from bad to worse . While a number of mollas and business people have enriched themselves beyond expectation, the once thriving middle class has been impoverished like the bulk of the populace.

Visitors returning from Iran speak of ordinary people grappling with untold problems in order to make ends meet . Economic reports show spreading unemployment and skyrocketing inflation. Yet Iran was and still could be one of the richest oil­producing countries of the Persian Gulf region .

The Islamic regime inherited a rapidly developing economy and a large foreign currency reserve.Why then such a gloomy situation?

Observers sympathetic to the Islamic Republic cite a number of causes, including the flight of capital after 1979, the collapse of the Shah's administration, strikes in the oil and other industries during the months preceding the revolution, widespread corruption during the last years of the Imperial regime, the 8-year war imposed on the country by Iraq, sabotage by the "enemies of Islam" (meaning internal and external opposition), U.S. sanctions and so on.

While some of these invoked causes, such as the pre-revolution strikes, the war or the sanctions, have certainly had an impact on the economy, it seems to me that most avoid to address other elements which underpin the present unsavory situation. Indeed, there are at least two factors that explain why the economy is almost beyond repair.

First of all , the population of Iran has more than doubled during the past twenty-two years while the the country's revenues has not increased (if not actually dwindled). This unresolvable equation underlines the urgency of the tragedy facing the whole nation.

Secondly, the number of people sponging the economy without contributing to it has attained unkempt proportions . Sine cures have been institutionalized in the form of numerous foundations endowed with huge budgets (representing almost a quarter of the general budget of the state) and paying profitable salaries to mollas and their families and friends for no real work. It is obvious that such a non-productive "siphoning" of the national resources ultimately destroys the economy.

Corruption , to be sure, existed in the Shah's regime too. But what we see in the Islamic Republic of Iran is different. It is not just corruption. It is organized corruption . It is as if proliferating leeches were sucking the blood of the nation with the blessing of attending physicians!

At any rate , these factors show that Iran's economy is terribly sick and cannot be refurbished under the present circumstances. Only the ouster of the mollas can eventually lead to a healthy recovery.

Comment for The Iranian letters section Comment to the writer Fereydoun Hoveyda