Future of Iranian regime threatened by divisions
The divisions within the Iranian theocratic establishment appear to have reached an unprecedented level and are now endangering the sustainability of the political system.
Iran’s hard-liners — including those who are close to Supreme Leader Ali Khamenei — are attacking President Hassan Rouhani and blaming his so-called “moderate” administration for the extreme pressures that Tehran is currently encountering. For example, Iranian parliament speaker and former presidential candidate Mohammed Bagher Ghalibaf last week slammed Rouhani’s administration, stating: “What makes this pressure harder to bear is the mismanagement, carelessness, and tangible inattention that make people feel helpless. The least that an official can do today is to be with the people. Today, everyone should know that political disputes will not become any bread and water for the people. Our main problem is that decision-makers do not focus on the day-to-day issues of people... mismanagement in making the right decisions, and ultimately do not have the real and effective will to solve problems.”
The strategy of blaming the president is used by Iranian politicians in order to dodge accountability for the country’s problems. The ultimate decision-makers in Iran are not the president or the foreign minister, but Khamenei and the senior cadre of the Islamic Revolutionary Guard Corps (IRGC). Iran’s presidential office is only tasked with setting the tone for the supreme leader’s objectives on regional and international concerns.
One of the most critical issues in the country is the relentless devaluation of the currency, which has become one of the least valuable in the world. Instead of taking responsibility and addressing the underlying issues, many members of parliament, as well as top authorities including Khamenei, find it easier to attack the president. One lawmaker, Javad Hosseini Kia, bashed Rouhani over the rial’s poor performance, saying: “Dear Mr. Rouhani, the recklessness of this government has plunged the people into black soil. (The US dollar) rate is above 300,000 rials, inaccessible housing, increase in prisoners and dowry enforcement cases, decrease in marriage statistics and increase in divorce statistics, the shrinking people’s baskets and the fading of meat, chicken and dairy products from people’s table are the results of this negligence.”
The fact of the matter is that there are two major institutions that have significant control over the nation’s economy, including the value of its currency, and they receive large portions of the country’s budget: The IRGC and its affiliates, and the Office of the Supreme Leader. Although the IRGC is known as a military organization, it has become involved in monopolizing Iran’s economy by engaging in illegal trading. The IRGC buys and controls various economic sectors, such as telecommunications, gas and oil, and commercial airlines. When it comes to Khamenei, just one of the organizations he owns — Setad Ejraiye Farmane Hazrate Emam — is worth at least $95 billion.
The strategy of blaming the president is used by Iranian politicians in order to dodge accountability for the country’s problems.
Dr. Majid Rafizadeh
Furthermore, financial corruption is evident at the top and across the political spectrum, among both the moderates and hard-liners. Although Rouhani famously promised that he would root out “corruption in the country’s administrative and economic system,” the misuse of public funds continues on a large scale, including by his administration, and that is one reason why the currency has lost so much value since Rouhani took office in 2013.
Meanwhile, much of Iran’s revenue is being spent on keeping Bashar Assad in power in Syria or supporting militia and terrorist groups across the region, rather than on strengthening the country’s economy and redistributing wealth.
The regime’s banking system is also to blame. The regime has developed a flawed and corrupt system, in which banks are paying out among the highest interest rates in the world — as much as 20 percent on savings accounts — while favoring the regime’s agents and loyalists. In comparison, the average interest rate for US banks is about 1.5 percent.
The financial system has been designed in a way that helps officials and those at the top rather than the ordinary people. People who have connections and have accumulated wealth through corruption can deposit billions in one of the government’s banks, such as Caspian or Sepah, and receive 20 percent interest every year. On the other hand, ordinary people are struggling to make ends meet.
Iran’s economic problems are systemic and exist deep in Tehran’s corrupt financial system. The current currency crisis is not an anomaly or an exception: The rial’s value has plummeted almost continuously for the last 40 years — since the establishment of the regime — from nearly 70 per dollar in 1979 to as much as 290,000 now. This negative trend will most likely continue as long as the Iranian regime does not adequately address the country’s financial corruption.
Finally, the quarrels between Iranian officials and the gaps within the regime’s political system have become more noticeable due to the extraordinary pressure the theocratic establishment is facing economically and politically. If the current pressure continues, the divisions in the theocratic establishment will inevitably widen and ultimately bring the regime to its knees.
- Dr. Majid Rafizadeh is a Harvard-educated Iranian-American political scientist. Twitter: @Dr_Rafizadeh