How does corruption flourish under the rule of the Iranian regime? This pressing question was recently addressed by Hossein Salahvarzi, the former head of Iran’s Chamber of Commerce, in an interview with the state-run Shafaqna media outlet on February 3, 2025.
Salahvarzi exposed the extent of foreign exchange corruption and the government’s flawed economic policies, arguing that the Central Bank’s mandated pricing and misguided policies have fostered rent-seeking behavior and widespread corruption while severely impacting the country’s exports and trade balance.
Unrealistic Exchange Rates: The Root of Foreign Exchange Corruption
Salahvarzi pointed to the government’s manipulation of exchange rates as a key driver of corruption. “In recent years, the government’s insistence on setting unrealistic exchange rates has led many to compete for the largest share of foreign exchange resources,” he explained. This unhealthy competition, compounded by political interference in the Central Bank, has intensified foreign exchange corruption and deepened economic inefficiencies.
$9 Billion in Exported Foreign Exchange Lost
One of the most striking revelations in Salahvarzi’s interview was the staggering amount of foreign exchange that has not returned to the country. “Last year, while Iran faced a trade deficit of $16 to $17 billion, nearly $9 billion in foreign exchange from exports failed to return to the economy,” he stated. Salahvarzi described this as a clear example of systemic corruption, which not only drains the country’s financial resources but also fuels further instability in the foreign exchange market.
Economic Mismanagement and the Elusive 8% Growth Target
Salahvarzi also criticized Iran’s long-standing failure to achieve sustainable economic growth. “Over the past four decades, seven development plans have been formulated, all aiming for an 8% economic growth rate. Yet, due to a lack of structural reforms, rampant foreign exchange corruption, and weak macroeconomic policies, we have never come close to this goal,” he noted.
He stressed that without fundamental reforms—including greater transparency in foreign exchange policies, the elimination of mandated pricing, and an independent Central Bank free from political pressure—corruption and economic crises will persist. “Failure to act will cause irreparable damage to Iran’s economy, and any delay in implementing reforms will only exacerbate the consequences,” he warned.
A Corrupt System Beyond Reform
Despite Salahvarzi’s recommendations, the reality of Iran’s entrenched corruption suggests that meaningful reforms are unlikely. The regime’s deeply rooted political and economic structures thrive on systemic theft, looting, and anti-people policies.
In such an environment, the notion of reform is futile—akin to trying to resuscitate a lifeless body. The regime’s corruption has reached a point where it has become an existential threat to the country’s economy, leaving the people with no choice but to seek its complete removal.
The Impact on People’s Livelihoods
The consequences of foreign exchange corruption extend beyond economic indicators—they have a devastating impact on ordinary citizens. The depletion of foreign exchange reserves drives up the exchange rate, fueling inflation and price hikes.
Increased production costs, declining purchasing power, and the devaluation of the national currency have pushed many Iranians into economic despair. Low-income groups face an escalating livelihood crisis, while businesses struggle to survive in an unstable environment.
The only viable path forward is the dismantling of the corrupt and oppressive regime that has brought Iran to the brink of economic collapse. Until then, the country’s economic turmoil will persist, and the people will continue to bear the burden of a failing system.
