In the past 16 months, the economy of Iran has experienced and will continue to experience complicated conditions in the coming days and months. Amidst this, the widespread economic crises in the country have added to the tightening of the economic situation for citizens to the point that now the term “economic collapse” is heard more from economic experts and even politicians.

Dr. Farshad Momeni, an economist and member of the faculty at Allameh Tabataba’i University, but about this trend, he says: “Someone who knows a little about economics will understand that if the economy is evaluated based on the current daily living conditions of the people, the sentiments of the people and business owners, and reports from the Central Bank and the Statistical Center, not based on the assumptions of government officials, it is evident that our situation is getting worse day by day.”

For many experts and even the general public, the question has been raised whether when Mr. Raeisi and his economic team took over the government, they had a proper understanding of the economic conditions and situation of Iran in domestic and international capacities, or if they were already under the influence of certain slogans and mental illusions.

Dr. Momeni says, “In my opinion, there was no proper understanding and most of it was delusions and incorrect assumptions, including the statements made by Mr. Zakani, who claimed that 80% of the current situation is due to mismanagement and only 20% is related to sanctions. This viewpoint was widely spread and believed by all his colleagues in the government and parliament. Their belief was that a group of incompetent and self-serving managers were running the country, and their personal and group interests lie in bringing the country to an unacceptable state, so that the rulers are forced to sign the JCPOA.”

He added, “The people’s perception was also that Mr. Raisi’s presidency could be a solution for two reasons; firstly, the analysis that no government, like the Rouhani government, has the ability and permission to resolve crises and revive the nuclear deal, due to the opposition and obstruction of hardliners, and that Raisi’s one-handed power would open the way and secondly, they had the perception of Raisi as a decisive and solution-oriented manager with strong leadership and acceptance among all conservatives, which both public perception and analysis turned out to be incorrect and all hopes were dashed.”

From slogans and statements such as “I challenge economists” or “I am aware of the economic situation and people’s suffering” or “I do not tie people’s livelihood to foreign policy issues”, a perception has emerged that he must have a well-thought-out plan in the economic field, which he has mentioned several times in reference to his 7,000-page plan, but it has never been presented anywhere to be examined and scrutinized. The question that comes to mind is whether Raisi was deceived or deceived in the economic field?

During the war, the government’s economic advisor says, “In my opinion, Mr. Raeisi did not have a proper understanding of the country’s situation. Not only did they fail to fulfill their commitments, but they also did not care to adhere to them afterwards. As evidenced by their disregard for official reports from the Statistical Center and Central Bank, they continue to talk about progress while completely ignoring the alarming state of the economy. This shows that they either have no grasp of reality or do not care about the public’s perception in the country or the world.”

He continues, “Solving Iran’s economic problem does not require 7,000 pages, but rather 7 pages are enough for it. Today’s economic situation in Iran is the result of two distinct factors: confrontational relationships and facing global established values, and undesirable economic governance within the country.”

This university professor considered the current conditions in the country as a form of governance and said: “According to many economic experts, today’s situation is the result of a completely corrupt and corrupt capitalist system and the weakening of property rights and an inefficient government. Other characteristics that can be mentioned as undesirable governance include lack of transparency and rule of law in the country, as well as unfavorable relations at the global level and confrontation with the global economy.”

“We are standing in a place where we are facing the values, social, and political systems of today’s world. Countries similar to us, with no complementary aspects, are also very limited. Today, only four countries, Iran, Venezuela, North Korea, and Zimbabwe, are in this situation and we have no complementary aspects. Even today, Venezuela is negotiating and selling oil.”

Dr. Momeni talks about the government’s method of ruling and sovereignty and not adhering to national interests in international relations: “This situation causes us to even lose our exchanges at the regional level, because in the economy and in international trade, for no country, even our closest partners like Russia and Iraq, nothing but national interests are determining factors. We are the ones who make decisions based solely on ideology, and the fate of our other partners is completely clear, and this situation will become even clearer in the very near future for our neighbors like Iraq. We are moving towards a direction where we are even losing the regional markets that we have and can work with them with lower standards.”

Economic advisor Mir Hossein Mousavi, in response to the question of whether Mr. Momeni, who is criticizing today, has any points about what has been delivered to the government, says: “This criticism is not unique to me, because if you remember, in April of this year, sixty-one economists wrote a letter to the people and warned about the economic situation in the country. Today, there are two groups of economists: one group believes that we need to gather once again and ask the government to take the previous recommendations seriously, and the other group is so frustrated that they believe there is no benefit in repeating the same things and that saying more and giving warnings is pointless.”

But every day, we witness a great deal of social and economic criticisms towards the performance of the government, not only from economists but also from other groups and business owners; from widespread organizations like chambers of commerce to others, and every day we see these criticisms from various platforms.

A member of the faculty of Allameh University added: “The situation is clear and we must do two things: either continue on this path that leads to decline and collapse, or find a solution to our relations with the world and change our governing methods so that we can take advantage of the opportunities we will have in the future and not let them slip away like we did in the past. Mr. Rouhani was also chosen in very special circumstances and it was necessary for his government to also become a victim of these two issues, but they did not allow it. Furthermore, what the Rouhani government inherited is not comparable at all to what we have today.”

He then mentioned the sharp increase in the exchange rate in recent months and added: “The fact that the exchange rate has grown by 65% in the first fifteen months of a government is unprecedented. It is true that we had one of the biggest currency jumps during the Rouhani administration, but it is unacceptable for the exchange rate to continue to rise at this rate. It is not acceptable for the government to proudly announce at the beginning of the year that I have eliminated the preferred exchange rate of 4200 tomans, but then eight months later proudly declare that I have established the preferred exchange rate and then not be able to maintain it and immediately say that it is fluid and subject to change and is not stable.”

Momeni, referring to the performance of the Rouhani government and Raisi in relation to the preferential exchange rate and the issue of an empty treasury raised by Raisi, says: “Now the gap between the preferential exchange rate and the market exchange rate is at least 15,000 tomans, which is higher than what existed between the 4,200 tomans exchange rate and the market rate initially. Regarding the issue of an empty treasury, we saw that the previous government provided a detailed and transparent report, and the current Minister of Economy also confirmed that the treasury was not empty. I believe that Mr. Rouhani should have implemented plans with caution and great prudence to preserve the government’s resources and the resources in the treasury, but he did not.”

Farshad Momeni adds in response to the question of what has been delivered to the government: “For example, during the coronavirus period, it was expected that there would be more serious support for families and businesses, but that did not happen. The reason for that was the very conservative approach that the government was taking, because our economic outlook and resources were not clear at the international and national levels. In this same area that the Rouhani government has delivered, the situation has gone towards collapse and many of the leading economic enterprises that I could mention have either been closed or have been managed for months with an interim and uncertain head.”

He continued, “In the past 16 months, not even one page of reports has been presented or published in the areas of welfare, employment, and economy. Even in cases where they proudly announced and unveiled policies such as employment policies or the national employment ecosystem, the reports and statistics presented are completely different from reality and what the Statistical Center and Central Bank report. For example, during Rouhani’s term, the Ministry of Welfare achieved first place in transparency in the national level for three consecutive years in the areas of entrepreneurship and public relations, and was a pioneer in eliminating licenses and digitizing services. However, today, all of those achievements have been lost and we have returned to the situation of ten years ago.”

University professor Allameh, by comparing the performance of the Rouhani and Raisi administrations in the preferred currency and the policy of eliminating it, which is considered a major source of conflict between these two spectrums, also states: “For at least five decades, the economy of Iran has been sick and this illness has intensified over time. Today, we are facing a chronic illness that has reached its peak in some periods in a very alarming manner. This illness must be addressed at an institutional level. For example, our corruption index ranks 150 out of 180 countries, and in terms of competitiveness, we rank 120 out of 140 countries. In the business environment, we are ranked 128th.”

They also mentioned the issue of corruption and the ranking of corruption in different governments of the Islamic Republic and said: “If we go back a little to the end of Mr. Khatami’s government, we were ranked 77th in corruption, and at the end of Mr. Ahmadinejad’s government, we dropped to 144th place. In the business environment, we were ranked 88th and dropped to 152nd place, and the situation has been the same in other indicators.”

He added, “The truth is that fundamentalist governments were corrupt and disrupted the business environment; because unlike the rest of the world, the extreme right and anti-development movement in Iran, which started with Mr. Ahmadinejad, was against the private sector and hindered business activities. This movement has a highly centralist and concentrated approach.”

He continued, “Unfortunately, this type of perspective has intensified in these governments and is part of their ideology. They do not believe in the freedom of households and businesses in the economic sphere and think that the government should control everything to the maximum. Rent-seeking relationships also stem from this mindset. Look at the household appliances market and see what kind of rent has been created for producers by restricting imports.”

Dr. Momeni, criticizing the government’s economic policy of surgical operations, which was carried out in an entirely inappropriate time by eliminating preferential currency, also says: “Setting the exchange rate at 4200 tomans, despite its opponents, can be understood with the assumption of war relations, but individuals with a highly centralized perspective disregarded the defensive and transparent position and called this action an economic surgery and repeated it after eight months. In fact, during the mentioned economic surgery, warnings were given that the patient was not in a suitable condition for surgery and the surgeon was not qualified for it. If the surgery is performed and the patient’s condition worsens, it means that the surgeon was not qualified for the surgery. Apart from economists, other individuals also warned the government and private sectors not to liberalize the currency for medicine, agricultural raw materials, and animal feed under any circumstances.”

Recently, sixty-one economists of the country wrote a letter and it seemed that they have no hope in the current government and have only written this letter for the sake of recording it in history. Dr. Farshad Momeni was one of these economists who clearly stated in the letter that the path taken by the government and the overall ruling will lead to economic collapse.

The believer believes that collapse means failure; a situation in which the government is unable to fulfill its governing duties, even if it has multiple economic responsibilities.

He continues by referring to the signs of economic collapse in the country: “The collapse has completely happened in people’s minds and its tangible manifestation can be seen in the inability to provide medicine, energy for production companies, and even gas for government offices, maintaining stability in the currency market, food security, reducing poverty, reducing unemployment, and increasing social disintegration.”

This economist has explained that the interpretation of collapse in politics and sociology or economics may differ: “In my opinion, collapse occurs when there is evident disconnection between the government, the market (economy), and society, and these three main institutions are unable to resolve their common issues through social interaction and dialogue, leading to a society facing distrust and disconnection among these three.”

He added that “even though some have talked about government bankruptcy, the reality is that bankruptcy is meaningless for the government and the public sector, in the sense that a bankrupt enterprise is forced to close. The government and public sector are forced to carry out their duties in any way possible, such as borrowing from the central bank, borrowing from foreign sources, and printing money, in order to maintain border security, domestic security, and pay their employees’ salaries; therefore, bankruptcy is meaningless for them. As you can see, even in the worst situations in Venezuela and Zimbabwe, bankruptcy has not happened in this sense. But in my opinion, collapse means failure; a situation where the government cannot fulfill its governing duties, even if it has multiple economic interventions.”

According to this economist and university professor, signs of collapse can even be observed at the societal level: “At the societal level, we see signs of collapse in high divorce rates, suicides, migration, and poverty, all of which indicate social collapse in the country. We have signs for this situation, one of which is street protests that are happening with very close economic and social foundations, and widespread dissatisfaction that is shown in every poll and with every basis. Migration or silent protests, poverty and suicide are all important indicators of society, but if you think about when this social collapse happens at the political level, I am not a political expert.”

It seems that what is being introduced today as the performance of Ibrahim Raisi’s economic team is actually the result of the economic performance of the Islamic Republic of Iran over the past 44 years. A government that from the beginning claimed to establish an “Islamic economy” and in just a few years not only destroyed the economic infrastructure left over from before the revolution of Bahman 57, but also turned into one of the most corrupt and destructive governments in the history of Iran and even the world.

If the Iranian economy has survived so far despite the mafia structure and rent-seeking in the Islamic Republic, it has been with the help of large amounts of money from the sale of crude oil and other natural resources. However, economic sanctions have closed the flow of large foreign currency revenues from the sale of crude oil and exposed the inefficiency of the economic structure of the Islamic Republic.

All of this is happening while experts from different factions of the system are currently warning about the coming weeks and months. And on the other hand, at the top of the government, officials of the Islamic Republic are seeking to secure as much income resources as possible, regardless of the cost. The “generating” plan, based on which public assets and resources belonging to the people of Iran and entrusted to the government will be sold, so that the government can use it for current expenses; and all of this in a non-transparent process, with the immunity of a seven-member committee of government officials who are pushing forward this treacherous auction.