Insider news & Analysis in Iran
Iran's Economy in Free Fall

By Edward Carney

Across Iran, protests and strikes continue, following those that began in December and quickly spread across the country. Originally, the protests were about the soaring price of food and other basic commodities, as well as the failure to pay wages. Now, the demonstrations have turned against the government.

In just six weeks, the second wave of U.S. sanctions go into effect, and the Iranian economy is already in free fall. International economic experts believe that the regime cannot survive this economic catastrophe.

The inflation rate will reach 60 percent this year, according to Iran's Central Bank. The rial has hit a record low against the U.S. dollar. While Iran's active work force is 26 million, at least 10 million people are jobless. Youth unemployment has reached 40 percent, with many university graduates unable to find a job.

ISNA official news agency reported in April that at least 33% of the population live under the absolute poverty line, meaning that they cannot afford essential daily needs.

Most of the state-owned banks in Iran have gone bankrupt, but the government tries to hide this.

The regime intends to increase its military spending in Iraq, Syria, Yemen and Lebanon, but has announced budget cuts that will affect the poor. Supreme Leader Ayatollah Ali Khamenei and President Hassan Rouhani claim that they need to continue their meddling in the region to save the Islamic Republic. Meanwhile, the repression of the Iranian population, including the arrests of thousands of protesters escalates.

U.S. Secretary of State Mike Pompeo has urged all countries to reduce their imports of Iranian oil to zero, when the second set of sanctions go into effect in November. After Pompeo's announcement, Iranian oil exports dropped by almost one-third.

EU companies says they will continue to trade with the regime, but U.S. President Trump has warned that anyone who does business with Iran won't do business with America. This warning pushed Germany's state-owned rail operator Deutsche Bahn to announce the phasing out of projects in Iran. As well, several other European companies have suspended plans to invest in Iran, including the French oil giant Total, and carmakers PSA, Renault and Daimler.

Marshall Billingslea, the U.S. assistant secretary for terrorist financing in the Treasury Department, said last week that sanctions on Mahan Air and supporters of the Iranian carrier will be imposed, as the airline was involved with transporting weapons and personnel to Syria in support of Bashar al-Assad.

The clerical regime’s leader Khamenei’s policy of aggressive military expansionism across the Middle East has them providing men and resources to back Assad, as well as driving the campaign against the Sunni population of neighboring Iraq by supporting the Shiia mobilization forces. Iran has financed and supplied the Houthi rebels in Yemen, and Hezbollah in Lebanon.

“Combined with the mullahs' own predilection for corruptly lining their own pockets, it is little surprise that the country with the world's second-largest gas reserves and fourth-largest crude oil reserves is facing economic meltdown.

Iran, despite its rich, civilized and open culture, has become an international pariah, its religious fascist regime condemned for human rights abuse and the export of terror, while its 80 million beleaguered citizens, over half of whom are under 30, struggle to feed their families against a background of record temperatures, power outages, water shortages and food prices that have risen by more than 50 percent,” according to Struan Stevenson, coordinator of Campaign for Iran Change, former member of the European Parliament representing Scotland, former president of the Parliament's Delegation for Relations with Iraq and chairman of Friends of a Free Iran Intergroup.

It is also not surprising that the widespread protests have spread from the main cities to rural towns and villages. The working classes have united with middle-income earners. Chants of "leave Syria alone, think of us instead" and "death to the dictator," show the people’s demand for regime change. Cries of "death to Khamenei" - and "death to Rouhani" are commonplace during protests.

The People's Mojahedin Organization of Iran (PMOI or MEK) is acknowledged for the coordinated nature of the protests. The MEK is part of a political coalition — the National Council of Resistance of Iran (NCRI) — which is the democratic alternative to the theocratic state. The NCRI offers a future of freedom, justice, democracy, human rights, women's rights, abolition of the death penalty, an end to international terror and aggression and an end to the nuclear threat.

The contrast to the current chaos and oppression has young Iranians willing to risk their lives to bring about regime change.

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