As economic pressure mounts in Iran, RFI spoke to economist Djamchid Assadi about how this is leaving the country more isolated and strengthening the role of the Revolutionary Guards.
Iran has been unable to export oil since 1 August after a United States naval blockade shut down its main export terminals, adding to pressure on an economy already struggling with inflation and widespread poverty, Assadi told RFI.
The Islamic Republic had been given a 60-day grace period from 15 June to reach an agreement and exported as much oil as possible during the following six weeks, meaning revenue from those shipments was still coming in, said Assadi, an economist and lecturer at the Burgundy School of Business in Dijon, France.
The US has also blocked several cryptocurrency exchanges, which had allowed Tehran to circumvent US sanctions.
“All of this shows that the economic situation is extremely dire,” Assadi said.
'Extreme poverty'
Officially inflation is running at more than 85 percent, although some estimates put the rate at 200 percent or higher, according to Assadi.
“But even if we take the official figure of 85 percent, the reality remains the same: incomes are not rising at the same rate as expenditure,” he said. “Expenditure is therefore rising faster than incomes, and the population is becoming poorer.”
Unemployment is also adding to the pressure, with official figures showing a considerable rise in the number of street vendors in Iranian cities.
“These are not professional traders, but people who have lost their jobs, who can no longer provide for their families and who are beginning to sell items they own at home, in the hope of finding buyers,” Assadi said. “In short, this is a situation of extreme poverty and inflation, unfortunately with no promising prospects.”
The economic decline does not necessarily mean that Iran’s political system will collapse, however, he said.
“The Islamic Republic is being weakened by the war and international economic sanctions, but that does not necessarily mean the regime will fall,” Assadi said. “A political regime does not simply disappear because it is poor or because the population is protesting. As long as the regime remains stronger than the population, it can hold on to power.”
Internal divisions are also making political change more difficult, he said, with two rival factions competing within the Islamic Republic.
“One faction may accept a compromise, only for another to subsequently undermine it,” Assadi said. “This is a key reason why it is very difficult to bring about political change.”
Revolutionary Guards’ role
The weakening of the Islamic Republic could meanwhile strengthen the position of the Islamic Revolutionary Guard Corps, known as the Pasdaran, Assadi said.
“This is an idea that may seem paradoxical, but the more the Islamic Republic weakens, the stronger the Pasdaran becomes in Iran,” he said.
Sanctions make the Guards increasingly important because of their experience in finding ways around international restrictions, raising funds and securing equipment, he added.
“Since the war with Iraq in the 1980s, they have become accustomed to circumventing international sanctions during periods of tension. Consequently, the more economic sanctions and attacks there are, the more important their role becomes in the country’s governance.”
The Revolutionary Guards, however, are not a unified force and significant rivalries also exist within the organisation, he added.
Iran can expect little relief from its relations with China and Russia, Assadi said, arguing that neither should be regarded as a genuine partner of the Islamic Republic.
“I do not believe that China is truly a partner of the Islamic Republic,” he said. “It is primarily seeking to capitalise on the situation.”
China has occasionally sold military equipment to Iran, but Beijing uses Tehran more as leverage in its dealings with the US, Assadi said.
“I believe China has no interest in supporting an Islamic Republic that is becoming increasingly isolated on the international stage."
Russia also has shared interests and cooperation with Tehran, but also seeks to maintain those relations as part of its dealings with the US and the West, Assadi said. Moscow also maintains good relations with Israel, and would therefore not align itself entirely with Tehran.
“Iran has therefore isolated itself to a great extent."
Uncertain outlook
The coming period is likely to bring continued instability rather than either full-scale war or peace, with attacks, pauses, truces and renewed hostilities, Assadi said, comparing the situation with the final years of the Iran-Iraq War.
“It was neither an all-out war nor true peace,” he said. “Sometimes there were attacks, sometimes they stopped, and sometimes oil tankers were targeted.”
Iran could still try to sell oil at reduced prices or find alternative sources of income, but doing so is becoming increasingly difficult, he explained.
“The poorer the regime and the people become, the more brutal and repressive the regime becomes,” Assadi said. “If by ‘resisting’ we mean surviving, then yes, the regime can survive. But this survival increasingly depends on force and repression.”
A genuine compromise with the US could itself threaten the survival of the Islamic Republic, he argued, particularly if it involved Iran renouncing its nuclear weapons programme and ending support for its allies in the Middle East.
“Under such conditions, the regime will cease to exist."
This article has been adapted from the original interview in French by Antoine Camara.
