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Iran Update: Capital flight from Iran highlights the Regime’s Instability

Written By | Sep 10, 2020
Biden, Iran, Regime, Economy, Chaos, Middle Class, Poverty, Mullahs

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Are Iran’s Mullahs creating a country devoid of a middle class as those that can are among the Capital Flight from Iran?Referring to the Central Bank of the Islamic Republic of Iran’s statistics, the head of the Tehran Chamber of Commerce announces that between 2011 and 2019 some 98.4 billion dollars were drained from the country. This equals 10.9 billion dollars a year for nine years.  Considering that each Iranian citizen receives a subsidy (yarane) of almost 24 dollars a year, the figure equates to 43 years of subsidies for each Iranian (run state Daramadnews august 23,2020).

Run state Mizan: “Now, our dear country is in a deadlock and a crisis of hardship and dissatisfaction. The kingdom and the nation have reached the edge of a terrible abyss of destruction .” (July 1, 2020).

The pro-regime economic analyst Saeed Leilaz says:

“I assume that in the past four to five years, the capital flight in Iran has been around 100 billion dollars.” We need to consider that these numbers do not count unproductive forms of capital like gold, financial currency, or the cash dollars that normal people store under the rugs in their houses for emergency use”.

If we consider that two-third of the Iranian people are below the poverty line, we realize that such money remains in the hands of the closest circles to the government. Coincidentally, they are the same ones that no longer trust in the regime in power.

Experts in Iran agree that the riots of 2017 and 2019 caused instability in the government and that this led to the capital flight carried out by the closest circles to the regime.

The government’s warmongering policies in the middle east resulting in events such as the Iran-Iraq war as well as costly nuclear activities. Including the deployment of thousands of armed militia soldiers all over the region, contributing to the poverty of the people.

Now the country is facing harsh the cruelest forms of inequality: grave dwellers, slum dwellers, and protests like the one in November 2019, to name just a few. (Can Iranian Protests Turn Into A Widespread Social Movement?)

Iran’s Religious Regime: Forty years of international struggle

In Mashhad, which used to be one of the richest cities in the country, there are 1.2 million slum dwellers. This number almost equals the population of Shiraz city. (Life in the Shantytowns: Result of Mullahs’ Rule in Iran)

Saeed Leilaz says

“Since the Mongol attack on Iran in 1221 (618 Lunar Hijra), that did not see or read about a tougher year than this. Not even during the Iran-Iraq war, the country has been under as much pressure as now”. (TVNetwork, Time code: 2049)
The restless lower classes protests

Each society has a layered class structure, where individuals from all layers relate to each other. Increased poverty causes the middle classes to descend even as lower classes descend even further into poverty. The descended people start to realize that their new, lower economic status is not compliant with the ownership, income, and lifestyle of their former lives.

At this point, we can see that economic and societal classes layer on top of each other. A process that continues to the point that there is one vertical pile of classes. Iran’s sociologists calling this the “The vertical class”.

If chaos occurs anywhere in this vertical pile, it quickly spreads everywhere.

The vertical class lacks persuasive dialogue and just wants to demolish whatever it recognizes as the source of its misfortune. The protestors’ behavior in 2017 showed that people just wanted to shout their disappointment. However, in 2019, there was no longer a voice confirming that the poor classes had reached the limit where living is not possible anymore.

Iran: The last encounter for survival of Iran’s middle class

The restless impoverished protesters were composed of three groups. There was the youth without a future, those who cannot go back to their past, and the workers that have no future because their income is barely enough to survive. Most of the arrested protestors of 2019 were between 18 and 29 years old.

According to surveys, this age group is the most dissatisfied in the country.

During the 2019 protests, some people from the poorest classes felt they had nothing to lose and went directly for the downthrow of the current governing system. They planted the seed of an impending rebellion.

The Mullahs attempt to take advantage of the Coronavirus

Iran’s regime knows very well that the next rebellion will be inevitable. Therefore, it wanted to take advantage of the opportunity caused by the COVID-19 outbreak to delay it.

Iranian regime relies on COVID-19 emergency to continue repression

Hamidreza Mahboobfar, a member of the Coronavirus Chamber, revealing:

“To prevent the recurrence of 2017 and 2019 protests, and followed by the economic crisis and drop of Rial’s value midst sanctions and corona pandemic, the government has employed the “herd immunity” policy and hurried to reopen the country and cancel all the limitations and prohibitions, leaving people alone with coronavirus” (run state Jahane-San’at July 9, 2020).

The herd immunity policy would inevitably end up in the massive death of around 2 million people. This way, the regime tried to make the rebellious youth and the entire society surrender. And abandon the idea of new riots.

The failure of Iran’s strategy

After days of absence, Saeed Namaki, the Health Minister of Iran, steps in front of the cameras:

“We read the security reports. It is a serious issue that people are reaching a point of an eruption from poverty. The president and the security forces must think about (people’s) livelihoods to prevent an eruption” (Irna July 8).

Namaki recognizing the failure of the strategy that was meant to prevent riots. Eghtesade Saramad newspaper (July 5) has also shown the proximity of a riot:

“The country is going through strange days with explosions of everything and all aspects of life. So strange that even the healthiest minds fall into illusions: what is happening? Why does it seem like everything has gone out of control?”.

Mostaghel newspaper also showed concern for further riots on July 5:

“Civil riots is what worries Iran in summer 2020. We should worry about it considering the wide poverty, the Corona spread and the helpless poor population with no solution thought for them”.

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Hamid Enayat

Hamid Enayat is an independent Iranian political analyst and writer based in Europe.