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Iran's Bigger Problem: A Crumbling Economy

(Al Arabiya) Dr. Majid Rafizadeh - The recent dismissal of Economy and Finance Minister Abdolnaser Hemmati by the Iranian parliament reflects the gravity of the country's financial collapse. While Iranian officials often blame U.S. sanctions and external pressures for the economic downturn, the real issue lies in decades of mismanagement, a lack of visionary economic planning, and corruption. As inflation soars, the national currency plummets, and purchasing power declines, ordinary Iranians are struggling to make ends meet. Iran's currency, which stood at 595,500 rials per dollar in August 2024, has now depreciated to 927,000 rials per dollar. This has led to skyrocketing prices for food, housing, and essential goods. In addition, fears of an Israeli strike on Iran's nuclear facilities have led to uncertainty in financial markets, discouraging foreign investments and causing businesses to hesitate in long-term planning. Moreover, with its regional allies in decline, the Iranian government is finding it harder to justify its costly foreign interventions, which have drained the country's resources for years. Much of Iran's wealth has been funneled into financing proxies in the Middle East, leaving little for domestic development.
2025-03-06 00:00:00
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