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Sanctions Relief Will Not Solve Iran’s Economic Crisis Despite the Iranian Regime’s Demands

In the Vienna talks, the Iranian regime is trying to lift sanctions against its nuclear program and thinks that this is the way to save Iran's bankrupt economy, while the regime's economic situation is worse than being saved by lifting sanctions.
In the Vienna talks, the Iranian regime is trying to lift sanctions against its nuclear program and thinks that this is the way to save Iran’s bankrupt economy, while the regime’s economic situation is worse than being saved by lifting sanctions.

With the nuclear deal negotiations still continuing in Vienna, officials of the Iranian regime are sticking by their demand that all sanctions against them must be lifted. The regime is blind to the fact that they are the cause of all of Iran’s economic problems, as they relentlessly lay the blame on everyone else.

The People’s Mojahedin Organization of Iran (PMOI/MEK) said, “The reality is that in more than four decades of tyrannical rule, the mullahs have damaged Iran’s economy beyond repair. History has shown that Iran’s economy will not be revived by giving the regime planeloads of cash and access to international financial channels. And this time around, if things have changed, it is only for the worse.”

For a health economic cycle to work, it needs a solid infrastructure of production, which in turn creates jobs and wealth, as well as opportunities for new enterprises. However, in Iran this infrastructure is barely fit for purpose. Large companies which once signified Iran’s economic power are running on fumes. The cause of this decline was not a result of sanctions placed on the regime, as they suggest, but because of the regime’s decades of institutionalized corruption and destructive policies.

The power that the Islamic Revolutionary Guard Corps (IRGC) have been given over Iran’s economy and domestic production makes it near impossible for Iranian entrepreneurs to get their own businesses off the ground and able to compete in the marketplace. Especially as a lot of Iran’s industries are controlled through organizations owned by the IRGC or the regime’s Supreme Leader, Ali Khamenei.

The MEK said, “The IRGC’s control over Iran’s ports and borders have also resulted in a tax- and customs-free import business that has resulted in huge profits for the regime at the expense of national production. Workshops, factories, and local businesses have shuttered because of the IRGC’s clout over the market.”

Highly educated Iranians, who are aware that due to the regime’s control they will be unable to advance greatly in their fields domestically, are migrating abroad year after year in their thousands. This brain drain will likely never change, even if sanctions are lifted, as the IRGC will still have control over Iran’s economy.

In order to reach economic growth, one of Iran’s options is to attract foreign investment into their stock market. With foreign investment into Iranian companies, this would greatly increase the flow of capitals and create new job opportunities. However, Iran’s stock market is tightly controlled by the regime and the IRGC, and as they have previously manipulated the market to their own advantage, they are not likely to start playing by the rule book any time soon.

The MEK said that when the stock market collapsed, “The IRGC, which was pulling the strings and orchestrating this Ponzi scheme, made huge profits. Ordinary people got the short end of the stick.”

Following this stunt, it is likely that any rational foreign investors will be wary about investing in Iranian stocks as it has become apparent that the numbers at the Tehran Stock Exchange do not reflect the true value of the Iranian stock market.

Therefore, even if sanctions are lifted and all financial and trade channels are once again opened to the regime, they will struggle to attract foreign investment. Plus, the fact that anyone wanting to do business with Iran will have to deal with the IRGC, who heavily control most of Iran’s major businesses.

Not just content with controlling Iran’s economy, the IRGC is greatly involved in a lot of the regime’s malign activities, from money laundering and financing terrorism across the Middle East, as well as continuing to violate human rights on a grand scale. Also, with many top officials in the regime being individually sanctioned for their roles in illicit activities, sanctions relief will not resolve these issues,

The MEK said, “In a nutshell, Iran’s economic problems won’t be solved by infusing cash into its markets. They are deeply ingrained into the nature of the regime ruling Iran. And without regime change, there will be no economic flourishing.”

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