While Iran’s economy bleeds, Tehran’s military spending is booming

It is hardly a secret that Iran’s economy has been in freefall for some time. The numbers don’t lie – The average Iranian is at least 15% worse off than they were ten years ago. Meanwhile, the value of the national currency, the Rial, is worth 59% below its value at the end of 2017 according to Reuters’ Andrew Torchia. This steep economic decline began way before the recent US sanctions on Iran. In other words, it is largely the result of gross economic mismanagement on behalf of Iran’s leaders.

And it seems clear that Iran’s economic plight is worsening. Local media reports that the country’s own parliament assesses that Iran could face hyperinflation with all its implications, as soon as March. Alarmingly, the same article concludes that “Some economists believe the official statistics underreports inflation and Iran might already be in hyperinflation territory.”

Although this disastrous financial prediction from within Iran has eluded the international media, some reporters have recently given an indication of the economic turmoil facing ordinary Iranians. In the New York Times, Thomas Erdbrink reports on the dire economic situation, which “drags down the middle class almost overnight.” He comments that “Along Tehran’s high-end shopping district… stores selling Western brands are shutting down. Rent increases are pushing people out of their longtime neighborhoods, and plane tickets to Europe now often cost two months’ salary.”

Meanwhile, in the Financial Times, Robert Wright reports that the “downturn in Iranian economy” is being blamed for a “migrant surge” in the UK. Such is the financial desperation of many Iranians, that they are increasingly prepared to risk the long and hazardous journey to UK waters, in the knowledge that “The UK does not return Iranian nationals who arrive in the UK to Iran because of the country’s poor human rights record.” The article quotes a UK official, who commented that “One of the things we’re very conscious of is we’re seeing worsening economic conditions in Iran.”

You would have thought that a government facing what appears to be a potential economic Armageddon, where daily life is already being ravaged, would look to cut costs wherever possible. Surely in such a situation, responsible leaders would embark on belt-tightening across the board as an immediate step? Incredibly, this is far from the case when it comes to Iran’s military spending. Quite the opposite in fact.


Iran’s spending on arms, troops and conflict has mushroomed significantly over the last few years. The military budget has spiked by an eye-watering percentage over the past four years. Of course, in that time, Iran has strengthened its foothold in Syria and has entrenched itself even more deeply in Lebanon, Yemen and elsewhere. Just because Iranians are suffering at home, Iran’s leaders see no reason to curb their military adventurism and their dreams of regional expansion and dominance.

Far from it. According to the International Institute for Strategic Studies, Iran’s 2018-19 budget bill will allocate $19.6 billion to defence spending, amounting to a full 7.5% of the country’s total budget. This is 50% more than the 5% mandated by a parliamentary bill in 2016. The study found that in real terms, Iran’s military expenditure in 2018 was 53% higher than it was five years previously. The same report commented that “the budget process in Iran is deliberately obscure” and so it is highly likely that the amount spent on military force was in fact greater than the figures noted. None of these budgetary details have yet to be covered by the global media.

The fact remains that Iran’s regime has abdicated its basic responsibility to put the people first, choosing aggressive foreign military campaigns over basic welfare. Even as Iran stares at the precipice of hyperinflation and economic desperation, no effort is being spared to finance the country’s military machine. This serves as a stark reminder that whatever the conditions, Iran’s unshakable priority is regional expansion – A thirst which is only likely to be further fed by a US withdrawal from Syria. The global media is not blind to Iran’s economic woes. Yet, rarely does it shine a light on the one area in which Iranian spending is flourishing – Dangerous military growth and development.

Blogging & updating on #Iran related news- focusing on Politics, Human Rights & the Iranian nuclear Program. Followed by top Middle East Analysts, Reportes & think tanks.

Posted in Iranian Financial Sanctions, Iranian Foreign Relations, Iranian Internal Issues, Iranian Politics, IRGC, Media Coverage, Military, Yemen

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