How would the turmoil in Iran affect the economic and living aspects, reflected the extreme poverty suffered by a vast majority of its people despite having the natural and human resources to build an advanced economy and achieve high living standards? Why an upheaval happened earlier during the 40 years of mullah rule remains an important question. But what has happened is the other way round.

The living standards of most Iranians have deteriorated since the fall of the Shah. Millions have joined the ranks of the impoverished, destitute and homeless due to the corruption, mismanagement, capital flight, drying up of domestic liquidity, and militarisation of the economy. History clearly shows that the system in any country would inevitably collapse if its economy were militarised and ideologized.

The examples are many, the most recent being the disintegration of the Eastern Europe bloc, which was prompted into a feverish arms race that exhausted those countries through unproductive investments.

The situation in Iran seems much worse. If the eastern bloc has been able to market its military products and recover some investments, Iran’s military spending on its backward technologies — imported from North Korea — are unable to market these and putting a heavy burden on the economy.

Moreover, the Iranian regime’s mismanagement has led to the emergence of a new corrupt and rich class, involving the mullahs and the Revolutionary Guards, who are intent on maximising their wealth. The Supreme leader heads this corrupt class with wealth ranging between $55 billion (Dh202 billion) to $70 billion, according to many sources. This was amassed by the confiscation of properties of the former rich and from oil and gas revenues, which resulted in the flight of investors and owners of capital as well as those who have experience in wealth management.

Key economic sectors

Another large part of the national income has been used in financing foreign terrorist organisations, whereby the Hezbollah alone receives between $800 million and $1 billion annually as well as around $6 billion for the Al Assad regime in Syria, according to the UN.

Key economic sectors in Iran, such as the financial and industrial sectors, have been in decline, either because of mismanagement or because of the boycott caused by the mullahs’ tension with many countries around the world, particularly its neighbours. On top of that, the living conditions of the Iranians have been neglected, savings have shrunk; financial institutions, banks, pension and retirement authorities bankrupt; and leading millions of Iranian to the loss their savings and sources of income.

These factors have led the economy to lose momentum, declining year after year and hitting rock bottom. Poverty, unemployment and high inflation were the most notable results.

There is also the collapse of the national currency Toman. Things got worse after a huge increase in the population prompted by the Supreme Leader’s encouragement for bigger families, with the aim of providing human resources to be used by the regime in its senseless regional wars.

The economic and political system has created the factors necessary to destroy itself from within, and this is what has actually happened.

It does not matter whether or not the regime will survive its inevitable destiny this time, as it did in 2009. The question of its continuation is no longer possible, especially as it has become very close to the feudal system run by a priesthood — a backward religious ideology mixed with an economic system characterised by corruption and an inability to develop. This is completely contrary to the nature of modern economies known for their dynamism and integration within the global system.

It goes without saying that Iran’s regime goes contrary to the movement of history, meaning more suffering awaits the Iranians. They will eventually face it down, but at a very high cost. But they will need to get back to being part of the international system.

— Dr Mohammad Al Asoomi is a UAE economic expert and specialist in economic and social development in the UAE and the GCC countries.