The Iranian elite is correct in banking on the difficulty for outsiders to understand Iran.

Iran’s ambitions for regional hegemony and nuclear weapons are closely related but not necessarily identical; their unrelenting pursuit in spite of their irrationality shapes the Iranian conduct.

But what is also clear is the impact of the economic havoc these policies are aggravating to the people. Less clear is the role of the deteriorating economic situation that can potentially play to alter the Iranian conduct.

Temporarily Iran is intoxicated with the progress on the nuclear weaponry issue at the expense of the material wellbeing of its populace.

The nuclear clock is running against the crucial economic survivability of the regime.

The race between these two clocks is subject to speculation in the region and beyond.

The intersection between the two can be explained by the Iranian almost epochal interest in the material and artistic and things secular.

The fable about Persian civilization is largely about things artistic and material, not the ideological or emotional.

Hence, the economic policies and performance of the Iranian regime flies against the history and sensibilities of the Iranian people, the state of affairs economically is not sustainable in the medium term.

The economic situation is the weak link in the Iranian strategic dimensions.

The supreme leader and the president spoke about the economic difficulties and the sanctions, especially on the oil front.

The Iranian oil minister was quoted as saying that Iran lost about 40 percent of its oil income.

Still Iran has about $ 70 billion of foreign reserves and exports about 1.5 million barrels per day, so they can take the pressure for a while longer, the inflection point is always hard to pinpoint.

For an economy that is dependent on oil and gas for about two-thirds of the budgetary outlays, a decline of 45 percent is bound to bite and is capable to alter the conduct, but the nuclear clock could be running faster.

The harsh sanctions started only on June 2012 and the effect on the Iranian riyal was devastating with a more than 60 percent decline on the middle class and started to erode support for the regime.

It is probably ironic that the Iranian government embarked at the end of 2011 on a program to restructure the economy through reducing the subsidies and a new cash distribution to most people.

The program was an ambitious grand project to deal with subsidies infested with the lethargic oil dependent economy. And it would have been a potentially good role model for other oil economies.

However, the project was torpedoed by the political infighting and shortage of funds in light of the sanctions.

The reformists’ agenda was not fully implemented and there is nothing worse than halfhearted reforms as they tend to send the wrong signals without taking all the needed medicine.

In the medium term, the most likely victim is the crucial Iranian oil and gas industries. Iran has been an oil producer since 1908.

Hence most oilfields are aging and would require heavy maintenance.

History tells us that once these fields are under utilized and under maintained, they become harder to reinstate and some die forever.

If the current situation persists, Iran is likely to witness another devaluation that would end the middle class and could lead to political chasm in the Iranian political edifice.

Economically and possibly politically, Iran is becoming similar to a composite of Venezuela (oil), Egypt (over population) and North Korea (closed). The erosion in the economic base is unmistakable and is likely to harm Iranian interests in the long term.

Inflationary pressure, unemployment and lack of foreign exchange will hamper progress in medium and long term.

The damage is self-inflicted due to the Iranian hegemonic and nuclear weapon ambitions. The Iranian people are talented and proud, and deserve better once the Mullahs take a note on the Shah traveled path of spending Iranian wealth on weapons and goals beyond Iran’s capacity.

The more things change the more they stay the same until Iran learns to live within its means and spend its wealth on its people.

— Fawaz Al-Fawaz is Riyadh-based economic consultant