Iran to blame for its currency crisis

Many countries are suffering a sharp deterioration in the value of their national currencies, which has affected living standards due to higher prices and lower purchasing power.

The way to tackle this has varied from one country to another, whereby those with civilian regimes have been addressing the crisis completely differently from totalitarian and ideologised ones.

Currently, there are two examples of regimes suffering from a currency collapse — Iran and Argentina. In Argentina, which enjoys an elected regime, many factors contributed to the corrosion of its national currency, particularly economic mismanagement, growing public debt and deficits, as well as the resultant impact on sectors such as agriculture.

In Iran, with its totalitarian dictatorship, elections are a mere eyewash and the constitution gives the appointed supreme leader absolute powers to run the government for life without accountability or control from any side. Thus, the devaluation reasons include corruption and mismanagement by the supreme leader and the Revolutionary Guards.

Reasons also include the destruction of water resources and the financing of costly foreign wars, through the support of terrorist organisations like Hezbollah and Al Houthis in Yemen, which have led to wasting the country’s vast wealth and its seizure by influential groups. In addition, the economic boycott has deprived Iran’s local economy of the basic elements for growth and prosperity.

In Argentina, the country came up with factual reasons for the successive devaluation of the peso, including the recession, which contributed to a huge deficit as well as mounting public debt. Immediate actions were taken to tackle the reasons and not engage in blaming foreign parties who have nothing to do with the internal mismanagement.

In Iran, the supreme leader and the Revolutionary Guards have not had the courage to bear the consequences of economic mismanagement. They attributed the crisis to a foreign conspiracy, while forgetting other technical reasons. This has led to a further deterioration in the currency, due to a wilful ignoring of the root causes. This was made clear by the powerless President Rouhani, as well as former president Mahmoud Ahmadinejad, who accused the Revolutionary Guards and the supreme leader of corruption and controlling the economic life.

The professional way to address such crisis, as is the case in Argentina, will ultimately lead to a recovery in the value of peso, particularly after agreeing to a rescheduling of debts with the International Monetary Fund, which offered Argentina $50 billion (Dh184 billion) to reduce the deficit.

Meanwhile, in Iran, economic conditions will continue to deteriorate. Its rial, along with the regime itself, will definitely collapse due to a failure to address the crisis. This means the situation will last and be made even worse by the supreme leader and his entourage, including the Revolutionary Guards and other opportunistic forces, who have smuggled Iran’s wealth abroad and left the Iranian people in the lurch.