Despite the Lifting of Sanctions, Why Iran's Economy Has Plunged Into Recession? – Part 3
- Sunday, 18 December 2016 20:11
NCRI - A year after signing the nuclear deal, while significant problems such as export restrictions and the prohibition of the international bank transfer (swift) have been resolved a transparent atmosphere is created to identify the radical economic problems of Iran.
In part one, and part two, to answer the main question: “why the recession is becoming deeper while the sanctions are lifted and the international transaction with Iran has been opened.” We started with examining ‘Internal issues’ like, ‘the lack of security and stability’ , the ‘domination of the Guardianship of the Islamic Jurist in the country,’ the power struggle mainly between Iranian regime’s Revolutionary Guards (IRGC) and Rouhani’s government and its disparaging effects on oil contracts, the following is Part 3.
Part three: Economic Article
Iran’s economy is deeply suffering from financial instability
Iran’s economy is deeply suffering from financial instability
C- Financial Instability
Iran’s economy is suffering deeply from a financial instability, with its main aspect being the failure and bankruptcy of the banking system as reviewed in chapter one.
Masoud Nili, government’s senior economic advisor, states in this regard: “I believe that Iran’s most important economic issue right now, is the state of its banking system which lags far behind that of the global banking system… what is threatening the economic stability is the banking system. Iran’s banking system’s problems has been fueled by a jump in the amount of its claims of the government, its direct and indirect investment in housing and construction sector, a jump in its non-current liabilities and finally it’s being disconnected from the international banking system.”
According to some of Iranian regime’s officials, including the Deputy Foreign Minister Abbas Araghchi, aside from European banks’ concerns about the sanctions, Iranian banks’ “poor fiscal discipline has not been ineffective” in the European banks’ decision not to cooperate with their Iranian counterparts.
D- A Widespread Corruption
Another aspect of financial instability is a deep corruption in all layers of bureaucracy. There’s not a single day on which the Iranian regime’s rival factions do not reveal a shocking, multibillion-thousand-toman (Iran Currency) corruption case. Such cancer-like corruption, already affecting the whole body of the Iranian economy, has so far been visible in the following areas:
- Exports and imports, by imposing unreasonable tariffs and sudden, overnight regulations and directives.
- Receiving huge loans by the Revolutionary Guard’s senior authorities and firms and transferring them to non-productive sectors.
- Tax exemption and tax evasion of the organizations associated with vilayat-e-faqih (Khamenei’s office).
- Tender contracts without following legal procedures.
- Transactions based on secret data.
- Assigning shares of public companies at low prices to the Revolutionary Guard and the firms controlled by Khamenei.
- Irregular crude oil sales.
- Irregular crude oil sales.
- Illegal and destructive possession of lands and natural resources.
- State-sponsored sport and the government’s insistence on being involved in sports business.
To be continued
