Iranian President Ebrahim Raisi handing over the draft budget to Parliament Speaker Ghalibaf on Dec 12, 2021. (IRNA)

January 29, 2022

In the summer of 2021, the Iran regime’s supreme leader Ali Khamenei installed the infamous Judiciary Chief Ebrahim Raisi as the president. During his election campaign, Raisi claimed that he and his incoming economic team have prepared a 7,000-page economic program and that if carried out, the people and the country would witness a boom.

Now more than 180 days later, the question remains: What happened to the 7,000-page economic program, and, for that matter, the economic boom Raisi had boasted about?

Now that Raisi has been in office for six months, the economy is still plagued with many a plethora of economic problems and astronomical corruption.

Practically speaking, what has become obvious is that Khamenei and his handpicked president do not care about the country’s economy. Instead, they are only interested in filling the coffers of their cronies and agents by stealing from the country’s wealth.

After much wrangling over the 42,000 rials preferential currency used by the regime’s officials and brokers for the import of the country’s basic and important goods at a convenient price, the Parliament finally approved its elimination. This will only lead to a spike in the price of food stuff.

The import of basic goods so far was $11 billion with the 42,000 rial currency, but revenue of less than $1.8 billion has entered the country’s treasury.

If goods were to be imported at the open market rate, some $10 billion would go to the treasury, a significant difference in revenue that will end up in the pockets of the regime’s officials.

Is the government’s business performance clean and transparent? Is it governed by any regulations at all? Does the government have any control over all the entry and exit points of commodities? Or on the customs and the country’s ports which are under the control of the regime’s Revolutionary Guards (IRGC)?

In this regard, a report published by the regime’s Parliamentary Research Center said:

“Since 2013, statistics related to the reports of the Central Headquarters for Combating Smuggling show that in the lowest case, the total amount of incoming and outgoing smuggling (including reverse smuggling) was more than $12 billion, which is a significant figure compared to the country’s official trade figures. Goods include clothing, footwear, cigarettes, home appliances, cosmetics.” (State-run daily Arman, January 1, 2022)

News about the country’s economic crisis is leaking from all corners of the government’s institutions and their statistics. One of them is the so-called “lofty” index which is an indicator of the consumption power of the managers and owners of manufacturing enterprises.

The scale of this index is between 0 and 100. And any number above 50 shows the prosperity of the manufacturing enterprises and vice versa.

Now, this index has reached its lowest rate in the past four months.

“This lower ‘lofty’ index for the past four months reflects growing concerns of the private sector entrepreneurs and business owners.

“Surveys of economic actors show that the continued recession and volatility of foreign exchange market prices and declining purchasing power have negatively affected the positive expectations of economic actors and that companies have faced a lack of liquidity and reduced orders due to declining customer purchasing power.

“Also, the main reason for the decline in the overall index in December was due to the recession in the construction, services, and agriculture sectors,” the State-run daily Tejarat, wrote on January 5, 2022.

The report emphasizes that procurement managers are facing severe disruptions in currency price stability and other production costs and are unable to forecast and plan for the coming months and cannot make any planning to continue operations in the coming months.

State economists also warn that the economy has returned to a period of recession, seeing the “lofty” index and performance of foreign trade and the situation of smuggling and rent-seeking of billions of dollars.

Iran Focus

About Track Persia

Track Persia is a Platform run by dedicated analysts who spend much of their time researching the Middle East, in due process we fall upon many indications of growing expansionary ambitions on the part of Iran in the MENA region and the wider Islamic world. These ambitions commonly increase tensions and undermine stability.