The Mullahs and the Iranian Economy
After the Iran-Iraq War in the 1980s and during the time of President Akbar Hashemi Rafsanjani, the nation entered a process of economic reform. But it adopted a false model of neoliberalism. It never followed the Western model of free-market capitalism, deregulation, and reduction in government spending. Instead, there are no free-market reforms, no security of capital, no normal supply-and-demand mechanisms, and no freedoms for healthy competition, as seen in the West.
This has led to the twin perils facing Iran: an entrenched financial oligarchy of the mullahs and the subsequent erosion of the Iranian culture, especially with the “brain drain” loss of millions of educated Iranians.
The Oligarchy of the Mullahs
After the war, the mullahs turned over virtually all profitable enterprises to the Islamic Revolutionary Guard Corps (IRGC) as a reward for acting as a military force protecting the regime based on Velayat-e-Faqih. This bounty to the IRGC (and their allies in the circle of power) included factories abandoned since the time of the deposed Shah, many fertile agricultural lands, and expensive properties in the cities.
Imports of goods became the monopoly of mullah-owned companies, and thus the mullah oligarchy was formed. This process in Iran is called privatization, but it is not privatization by any normal definition. In this way, the IRGC took control of not only a military force supporting the Shia clergy but also at least half of Iran's economy. It is said that there are 250,000 millionaires in Iran. In one of the election debates, Iranian Parliament speaker Mohammad Bagher Qalibaf acknowledged that only 5% of Iranians’ hands “reach their mouths” and the rest live in poverty. In practice, a new, corrupt, super-rich class emerged. Interestingly, despite the coronavirus, the number of Iranian millionaires in dollars increased by 21.6%, while it increased by only 6.3% globally.
Institutionalized corruption, including massive levels of embezzlement, has originated from this newly arrived class of Iranians. A daily slogan of many low-income workers at demonstrations says, "If embezzlement is reduced, our problem will be solved." Corruption at high levels has led to many workers not receiving their salaries for months, and many have incomes below the absolute poverty line.
In a general view, the three largest economic enterprises in Iran are classified as follows:
1- The National Iranian Oil Company
2. The IRGC empire, which controls up to two-thirds of GDP
3- The commercial empire of the clergy with the foundations at their disposal (such as Astan Quds, which was headed by the current president Ibrahim Raisi before he became took office).
There is no transparency or public auditing of these firms. The corps and mullahs do not pay taxes and do not abide by any of the laws because of their influence. The economy remains dependent on oil
and gas. Thus, the economic institutions in the hands of the IRGC and the mullahs “trading empire” -- which belong only to the mullahs' aristocracy -- have completely taken over Iran's economy. We are facing a corrupt economy under the unprofessional and ignorant management of "insiders." In such a situation, there is no private sector that can actually generate employment. Domestic production in agriculture or other fields is disappearing. Meanwhile, the commercial empire of the mullahs imports goods and makes huge profits. To hide their actions, the corps or the trading empire use many companies or companies with cover names.
After the 2015 nuclear deal, Iran's blocked currency, which is said to be worth US$ 150 billion, was released, and when up to 2.5 million barrels of oil were sold per day, the only beneficiaries were the Revolutionary Guards and the trading empire. In response, in 2018 and 2019, two major uprisings occurred based on poverty and inflation. The uprisings of Isfahan, Khuzestan, and Baluchistan directly or indirectly stemmed from the domination of this aristocracy over the economy and water. In Iranian society, the middle class has almost disappeared. Recently, teachers staged massive demonstrations with hundreds of thousands of people. Their average salary is about $208 and the officially declared poverty line in Iran is $416. There are practically two categories of Iranians: The 5% affluent class, which have taken all the wealth, and the remaining 95% who suffer in poverty. In Iran today, we no longer talk about the absolute line of poverty or even the line of misery; we talk about the line of survival, that is, trying to stay alive.
The Danger of Erosion of Civilization
The “brain drain” from Iran has become a constant bleeding of national vigor. Many young people with higher education cannot find jobs according to their specialties. Their choices are to take low-income jobs or emigrate from Iran. According to official statistics, in recent years more than 40,000 educated Iranians who cannot find work in Iran have left the country every year. This brain drains costs Iran up to US$150 billion a year. It is noteworthy that this amount exceeds the country's oil revenue. This shows how barren the economy is: Their inability to create good jobs is driving this wave of migration from Iran.
According to reports, the desire to migrate has recently become an "erosion of civilization." According to the 2020 World Census, the demand for Iranian immigration has reached 1.8 million. Therefore, using the term “civilization erosion” is accurate. This figure is equivalent to 2.33% of the country's population -- a population that puts their skills and expertise in a travel bag.
Moreover, according to some published statistics before 2018, 37% of the students who won medals in student Olympiads, 25% of those who won the Elite Foundation, and 15% of those who achieved high rankings in the national entrance exam, have left for other countries. These numbers have increased significantly in recent years. Also, according to other sources, 3,000 doctors and 900 university professors left the country in the last year alone.
What drives this kind of emigration? Factors include unemployment, inflation, corruption, the inefficiency of general management, inequality in job opportunities, discrimination in civil rights, lack of a clear vision of the future, frustration with reform, the issue of civil liberties, and undue government intrusion in private life.
"The first reason for the mass exodus of elites each year, which is about 38,000 elite graduate and Ph.D. students, is certainly a lack of hope for a bright future," Mostaghel, the state-run newspaper, wrote. "The second reason for the elites to flee the country is the circle of managers in Iran, which does not exceed a limited group of several thousand people, and it will never be the turn of a management without an elite without a relationship and a party."
The oligarchy of the mullahs and the flight of many of Iran’s best and brightest workers announce, above all, the instability of the Iranian theocracy. Iran’s long-suffering people feel a great urgency -- and a growing national determination -- to end the status quo and establish a new order to bring Iran into the modern world.