By Denis Korkodinov
Social unrest in Iran poses a serious threat to regional destabilization. Against this background, Washington is unlikely to ease pressure on Tehran. As a result of this, the Ayatollah regime has only two ways out of this situation: either complete bankruptcy or war.
According to international analysts, the Iranian economy, under the influence of internal and external factors, only fell by about 10% in 2019. At the same time, revenues from the sale of oil decreased significantly, and the value of the national currency fell to 60% from its previous level.
In these conditions, the leadership of the Islamic republic was forced to use unpopular measures to increase the tax burden, which would delay the state bankruptcy procedure. This was due to the fact that the export of Iranian oil, the main source of revenue for the Ayatollah regime, was called into question as a result of international sanctions. In addition, organized protests in Lebanon and Iraq deprived Iran of the possibility of external financing.
The increase in gas prices was due to the fact that due to the relatively low prices of this type of fuel, the Iranian leadership at the expense of budgetary funds compensated for the losses of fuel companies. Among other things, Tehran smuggled more than 11 billion liters of gasoline daily to Pakistan and Armenia daily, which created an extremely unstable market situation. Under such conditions, sooner or later, the state would increase the cost of gasoline in order to level the existing budget deficit. In addition, this would make it possible to annually receive an income of at least $ 2.5 billion.
It is worth noting that in 2010, Iran has been implementing a program for compensating citizens for fuel costs. The average value of such compensation per Iranian is about $ 11, and the aggregate calculation for all residents of the country is $ 858 million per month. However, due to international sanctions, the Iranian government was unable to continue this program, obliging the population to independently pay for their fuel costs. This led to the fact that gas prices were increased by 50%. However, to reduce the state budget deficit, Tehran plans to reduce social programs by almost $ 309 billion. And despite this, the price of gasoline in Iran still remains one of the lowest in the world – about $ 0.12 per liter.
In this regard, it is a mistake to assert that the ayatollah regime does not struggle with the consequences of the economic crisis. Nevertheless, the protesters demand, in addition to reducing the cost of gasoline, to stop Tehran’s financing of the Iraqi militia Hashd al-Shaabi, the Ansar Allah movement in Yemen, Hezbollah in Lebanon, armed groups operating in Syria, as well as Palestinian organizations.
According to the leaders of the protest, the adoption of these measures will significantly increase the revenues of the state budget by about $ 20 billion annually, but, meanwhile, this will lead to a complete loss of its regional significance by Iran, as a result of which Tehran will have only one option – war.
(The opinions expressed in this article are solely those of the author and do not necessarily reflect the views of World Geostrategic Insights)