Tsunamis can cause death and devastation as has become painfully clear over the past two decades. Earthquakes, like the recent Haitian and Chilean monsters, are not subtle events. They flatten buildings, crush houses, and turn infrastructure into concrete and steel confetti. But earthquakes can also generate power that remains largely unseen until a huge tsunami rises out of the sea and obliterates a coastline.
This metaphor comes to mind when analyzing the social and political situation in Iran.
Rouhani Admits Economic Tsunami
In his speech to the Parliament when he presented the budget for the Iranian year 1398 (March 2018-March 2019), President Hassan Rouhani resorted to a series of false statistics of his government’s economic success. But he further admitted that these brilliant advances and successes were stopped by American conspiracies, and the process was reversed.
Rouhani presented made-up figures and statistics. The more important point is that Rouhani confesses to the fact that the situation has deteriorated due to sanctions. He admits
In the past days, some government media have exposed some of the economic downturn.
In an article entitled “Tsunami in Iranian Trade,” the Ebtekar newspaper dated December 26, 2018 examined the impact of the sanctions on regime banks. The Chinese Kunlun Bank reporting on the economy, said: “Banking transactions between Iran and China are among the key issues for the country’s economic activities. And any disruption in it can put our exports and imports into serious challenges. The challenge of the kind of interruption in economic activity!”
Now, with the price of chickens rising, people are resorting to buying digestive systems for chickens.
China Fails To Save Iran
The Ebtekar newspaper points out what some regime officials had previously promised. “Economic agents can pursue transactions with the Bank of China (Kunlun) through their operating banks … But less than two weeks after the publication of the news, the bank announced in a statement that in order to resume business relations, some conditions were imposed, and the condition on one of its clauses is the termination of the transaction, and (financial transactions) with certain industries. It is normal for Iran’s trade relations to slow down in such a situation, and in this context, the economic future of Iran can be faced with serious challenges.”
Jahan-e-Sanat (World of Industry), another Rouhani faction newspaper, announced the closure of 100 paper production units. It wrote: “Following the problems in the paper market, out of 600 active manufacturing units in the paper industry. 100 units are closed.”
The report adds: “If this trend continues, the rest of the active units in this business will be shut down. The shutting down of paper production units after the closure of the chain of textile factories, shoe manufacturing, the production of household appliances and garment production units, is now signaling the expansion and deepening of the recession and rising unemployment rates.”
Regime Loses Power as Economy Continues Decline
It is not only state media whose reports indicate a severe economic situation, the closure of many factories and production units, or the impending tsunami in the economic field. International organizations also point out the deterioration of the economic situation in Iran.
The International Monetary Fund (IMF) has predicted, like the World Bank, that economic growth this year and next year will be negative in Iran.
According to the International Monetary Fund (IMF), Iran’s economic growth in 2018 and 2019 is projected to be -1.47% and -3.61%, respectively.
According to the IMF report, due to the depreciation of the Iranian Rial against the dollar, Iran’s GDP will fall from $ 430 billion in 2018 to $ 333 billion in 2019. The IMF also predicted that Iran’s economy would be 6.3 percent smaller next year. According to this forecast, the unemployment rate will increase to 7.12%.
Following the announcement of new sanctions by the United States, the clerical regime pinned its hope on the European Union and its special mechanism. It was also looking to Russia and China to save it.
Regime Officials Admit Europe Failure
So far, there has been no serious progress in the relationship with Europe and its mechanism. The media and figures of both groups express hopelessness and disappointment. Javad Zarif spoke about the special financial mechanism of the European Union called SPV in an interview with a Khorasan newspaper on December 25, 2018. He said “Europeans had a serious opportunity in Iran and they lost this opportunity because of inaction against the United States, or internal intransigence or opportunism (they wanted to use the benefits without paying a price). Unfortunately, Europe has no readiness to pay the price, the one who has lost in the SPV case in Europe.”
Zarif acknowledges that the regime did not profit from its relationship with Europe and its special mechanism. At the same time, he is speculating that Europe has lost in this matter. The fact is that the main loser in relation to Europe is the clerical regime. The regime has so far failed to get a serious concession from Europe after the US withdrew from the JCPOA and their sanctions. This regime wanted to make a small confrontation with the sanctions.
Expressing disappointment over Europe and its mechanism, it is clear that China will not be too helpful for the collapsed economy. This is especially in the face of banking sanctions.
One of the regime’s agents, Massoud Khayatzadeh, a member of the regime’s Chamber of Commerce, acknowledged that the banking relationship with China has also been cut off. He said: “While almost all countries had interrupted relations with Iran, China was the only one that maintained its small relationship with us. The fact that the Bank of Kunlun would once again engage in a discussion of banking transactions, that has not yet been successful, could have a significant effect on the future of the economy.”
“Today, more than 80 percent of our imports and exports are from the maritime sector, and this disconnection is not a pleasant thing, in other words, a tsunami is taking place in our trade,” Khaytakadzadeh added.
Another member of the Chamber of Commerce, Majid Pourkaed, spoke about the sanctions of the Chinese Bank and its effect on the Iranian economy. “Undoubtedly, cutting off relations will create a huge impediment to our economic system, in other words, it would engage us in an uncertainty.”
PMOI Supporting The People
This is an economic tsunami and economic collapse that the Iranian people welcome.
It will not be unexpected if in the not-so-distant future, more economic chaos and collapse happens. The economic tsunami advances every day. The collapsed economy does not have enough capacity to resist sanctions and save itself from deadlock and total destruction. Nor is there prospect of serious aid from outside, and in particular the European Union. These two things together mean the regime cannot save itself from complete collapse.
Previously, many European and Iranian government media outlets have repeatedly acknowledged this fact. Even if the new European mechanism is implemented, it cannot deal with severe sanctions. This mechanism can only solve the exchange of goods with goods or exchange of oil against food. In no way can that kind of exchange seriously help the crisis-gripped economy.
In the meantime, Members of Resistance Units, a network associated to the Iranian opposition People’s Mojahedin Organization of Iran (PMOI/MEK), are targeting bases of the Revolutionary Guards (IRGC), Basij paramilitary forces, and regime icons on a daily basis. And according to Iran News wire, there were more than 271 protests in 72 cities, villages, and industrial areas in Iran. That was only the month of January 2019, with an average of nine protests per day.