Iranian-born Amir Taheri, chairman of the think tank Gatestone Europe, is a columnist for the daily Asharq Al-Awsat, former executive editor-in-chief of the Iranian daily Kayhan, and the author of 11 books. Mr. Taheri briefed the Middle East Forum in a conference call on Nov. 29, 2018.
While the Islamist regime conveniently blames the renewed U.S. sanctions for Iran's economic malaise, a number of domestic and international factors account for the country's economic decline.
Massive government corruption and poor management prevent the effective functioning of the economy and set the stage for general chaos. Tehran's poor relations with its neighbors preclude the advent of normal economic conditions and leave it vulnerable to great-power manipulation. First, Beijing has used the sanctions as a pretext for withholding payment for its $22 billion in oil purchases from Iran to pressure Tehran to import Chinese goods in exchange for the debt. Second, Moscow has played an intricate double game with the Islamist regime, making generous promises it does not intend to keep while trying to exclude Iran from entering the international gas market.
Ordinary Iranians do not feel the direct economic pinch since food, medicine and humanitarian aid are exempt from sanctions, but a rapid economic deterioration has fueled widespread anger over the regime's adventurism abroad, seen by many Iranians as the main source of their economic plight. This was manifested not only in massive nationwide protests in early 2018 but also in quiet defiance of the Supreme Leader's religious rulings (fatwas) and growing talk by the opposition of regime change.
Such a sea change may be in the cards, but Iran's economic malaise alone will not suffice to bring it about. The regime maintains a veneer of legitimacy by dividing its domestic and foreign foes on the one hand and using an iron-fist to enforce its rule on the other. This means that only a concerted international pressure can usher in such a historic change, albeit through a skillful combination of economic pressure and limited military measures rather than a fully-fledged military intervention. Experience shows that the Islamic Republic tends to stage a tactical retreat whenever cornered, only to return to its usual ways once the pressure eases. The international community must not fall (again) for this ploy.
Unfortunately, instead of seizing the moment, the Europeans, Russians, and Chinese remain entrenched in their delusional dream of "reforming" the Islamist regime, as starkly illustrated by their stubborn adherence to the disastrous Iran nuclear deal, the JCPOA. Even the Trump administration, despite withdrawing from the JCPOA, does not seem to have a long-term strategy beyond renegotiating a new nuclear deal. Yet even if this goal were to be somehow achieved, it will still remain a dead letter as only a regime change in Tehran will enable its full return to the international fold.
Summary account by Marilyn Stern, Communications Coordinator for the Middle East Forum