Why the Iranian economy is almost beyond repair
April 12, 2001
"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.