News : Economy
- Published: Tuesday, 04 September 2018
By Edward Carney
The money Iran received from the U.S. following the nuclear deal was spent on funding terrorism in Yemen and Iraq, as well as the bloody war in Syria. Subsequently, a global drop in oil prices after U.S. oil production skyrocketed occurred, and the Iranian economy plummeted. The spread of inflation saw a rise of discontent of the Iranian people.
To make matters worse, fraud and corruption within the government was revealed. Iran is also the victim of a terrible drought that environmental mismanagement has exacerbated. This pattern of incompetence has the people of Iran calling for the regime change that leadership has fought so hard to quell, and it has responded with a vicious crack down on dissent.
Regime security forces have arrested those who engage in any form of protest, such as a woman waving a hijab, a businessman marching in the Grand Bazaar, or a farmer in his village square.
The Trump administration’s exit from the nuclear deal seems to foreshadow the imminent destruction of the beleaguered Iranian economy. The Revolutionary Guard Corps controls most of the economy, and they watch helplessly as waves of foreign companies leave, and Iranian oil exports grind to a near halt as the renewed economic sanctions already begin to have an effect on Iran’s economy. And the hope that the European Union will keep an economic lifeline open to the regime seems to be evaporating.
In what appears to a scapegoating of Iran’s President Hassan Rouhani for a crisis spiraling out of control, he was summoned before parliament for the first time. He made a startling statement, “the economic problems are critical, but more important than that is that many people have lost their faith in the future of the Islamic Republic and are in doubt about its power.” This surprising admission reflects on the power the regime has used over the last 30 years, and how that power is loosening.
Even Khamenei must realize that their hopes of rescue by Europe appear diminished. His official website published comments Khamenei said to Rouhani and his cabinet on Wednesday, “There is no problem with negotiations and keeping contact with the Europeans, but you should give up hope on them over economic issues or the nuclear deal.”
Khamenei also told Rouhani and his cabinet to work “day and night” to solve the mounting economic problems which include the collapse of the rial currency and surging unemployment.
But he also seemed to call on parliament not to press too much on Rouhani. According to Reuters, he said that officials should instead unite against U.S. pressure, since publicizing differences would only make the nation more unhappy.
Looking for other for scapegoats, the parliament started impeachment proceedings against the Education minister and moved to impeach the minister of Industry, Mines and Business. This followed the firing the Finance and Labor ministers.
U.S. officials aim to reduce Iranian regime’s oil exports to zero, after the new round of sanctions in November. A new report issued by Analysts with Oxford Economics this week says they expect U.S. imposed sanctions on Iran’s oil industry will “cripple” the Middle Eastern country’s economy after they take effect.
The sanctions are expected to send Iran’s economy into recession, and the analysts predict it will decrease by 3.7 percent next year, “the worst performance in six years.” The Oxford Economics report claims that it’s unlikely any efforts by other world powers can help Iran find a way to export oil.
Co-authors M. Bardastani and Maya Senussi wrote, “It now looks like the impact will be worse than we initially thought as the other signatories to the original deal have yet to spell out a clear strategy that would allow them to circumvent U.S. sanctions and continue importing Iranian oil.”
Russia and China are both faced with slowing economies, and China is in its own trade and tariff war with the Trump administration, so any hope of a lifeline coming from either of those countries is unlikely.
The November sanction are aimed at the regime’s petrodollars. Senior adviser at the Foundation for Defense of Democracies, Richard Goldberg, wrote in a Wall Street Journal editorial, “In June, Saudi Arabia, pledged to increase oil production by as much as two million barrels a day to replace Iranian crude.
Recent reporting shows Saudi Arabia and Iraq attempting to make up Iran’s market share. Last week the Trump administration announced a release of 11 million barrels from America’s strategic petroleum reserve.”
The impending economic crisis may be the worst they regime has or will ever confront.
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