Iran regime faces a difficult year

This year is likely to be one of the most challenging ever for the post-revolutionary Iranian regime.

One critical challenge the government will face in 2022 is the economy. The Iranian regime is encountering the worst economic conditions in its four-decade rule and is estimated to be running a $1 billion monthly deficit.

The regime’s top politicians have given warnings about the status of the economy. For example, parliamentary speaker Mohammed Bagher Ghalibaf, who ran for the presidency last year, surprisingly told members of the Majlis Research Center that the Islamic Republic is bankrupt. “Iran’s economy is bankrupt and the government isn’t doing anything about it… Unfortunately, we are living by the day, and I’m saying this based on studies that I’ve made,” he said, according to the state-run ISNA news agency.

Ghalibaf added: “If our economy is bankrupt, it is because of the nationalization, not because of sanctions.” But the reality is that Iran’s crumbling economy is the result of underlying factors ingrained in the regime’s political and financial institutions: Corruption in the theocratic establishment and across the political spectrum, mismanagement of the economy, embezzlement and money laundering in the banking system, and the hemorrhaging of the nation’s wealth on militias, terror groups and proxies across the region. This is why the economic problems will persist no matter who is in power.

The government-controlled Jahan-e Sanat newspaper admitted last month: “We failed to make the state understand that no matter what faction holds power, as long as the roots of the crisis remain unsolved, its branches will not be corrected. Therefore, the main problem is the inability of civil institutions to talk to the rulers and influence them effectively.”

This is not to say that nationalization is not a key factor in Iran’s economic woes. The main issue is that the regime’s nationalization efforts have created a monopoly in many areas. For example, Supreme Leader Ali Khamenei and the Islamic Revolutionary Guard Corps, along with loyalists of both, enjoy a monopoly in almost every industry. The IRGC controls more than half of Iran’s gross domestic product and owns several major economic powerhouses and religious endowments, such as Astan Quds Razavi in the northeastern city of Mashhad.

In addition to the dire economic situation, the regime’s social and political suppression is adding to people’s fury

Dr. Majid Rafizadeh

As a result, the Iranian regime’s economic situation will most likely continue to deteriorate in 2022 as, when a few entities monopolize, control and govern the economy, ordinary people and small companies will have fewer opportunities to prosper and grow financially.

To make things worse, Iranian President Ebrahim Raisi has selected many members of the IRGC and relatives of Khamenei to be part of his Cabinet. Even Jahan-e Sanat criticized the president, stating: “An issue that has very much worried people is the expansion of monopolies within our country’s economy, which is evident in Raisi’s government. In other words, instead of making our economic environment more competitive, we are witnessing the rise of monopolies, which has greatly worried economic actors about their future.”

Another critical challenge that the regime will face in 2022 is the unprecedented level of frustration, discontent and fury that many of the Iranian people feel toward the regime. This high level of disaffectedness could set the stage for a major nationwide uprising.

Life has become unbearable for the ordinary people of Iran. Unemployment and inflation are at, or near, record highs and the cost of living has skyrocketed. State-run newspaper Eghtesad-e Pouya last month warned: “According to the latest statistics of the World Bank, Iran has been one of the top countries in terms of unemployment over the past 10 years. Throughout the last decade, the average global unemployment rate was about 5.5 percent, and unemployment in Iran was reported to be about twice the global average.”

In addition to the dire economic situation, the regime’s social and political suppression is adding to people’s discontent and fury. And the human rights violations, arrests, torture, executions, imprisonments and suppression of the freedoms of speech and expression are likely to escalate under Raisi’s hard-line government.

In a nutshell, the key problems for the Iranian regime in 2022 are its crumbling economy and people’s anger toward the government, which could trigger a nationwide uprising and threaten the ruling clerics’ hold on power.

• Dr. Majid Rafizadeh is a Harvard-educated Iranian-American political scientist. Twitter: @Dr_Rafizadeh