Iran on the brink: economic crisis and war threaten to divide the country!

Iran on the brink: economic crisis and war threaten to divide the country!

The situation in Iran has deteriorated dramatically in the last few days. A week ago, Israel launched a military attack on Iranian facilities that has had numerous impacts on the country and its people. These attacks targeted both military installations and Iran's controversial nuclear program. Particularly affected are major oil and gas production sites, including the South Pars gas field and the Asaluyeh refinery, which were bombed FAZ reported.

The immediate effect of these attacks was a dramatic decline in the Iranian rial, which fell by 18 percent during the initial strikes. To stabilize the destabilized currency, the government has banned foreign exchange trading and websites are no longer allowed to display price information on dollars or cryptocurrencies. In addition, the Iranian central bank is trying to counteract possible capital flight while the stock market is at a standstill. Gasoline is being rationed at the country's gas stations, leading to long queues and further straining the already tense economic climate.

Economic misery and ongoing sanctions

The already miserable economic situation in Iran is being exacerbated by these armed conflicts. Before the war, the country struggled with an inflation rate of over 35 percent; Poverty and a shrinking middle class are the order of the day. The frequent shortage of electricity and water also makes the living conditions of the population worse. Western sanctions, which have intensified under the Trump administration since 2018, have put severe pressure on Iran's economy. Above all, oil exports, which represent the country's most important sources of income, were severely affected by the measures, although China, as the main buyer, can only help to a limited extent.

But it's not just the sanctions that are to blame for this crisis. Corruption and mismanagement have further weakened the country's economic structures, as shown by the scandal surrounding the tea trading company Debsh. It is also said that state-affiliated companies benefit from the sanctions, while private companies suffer from the consequences. Observers see a bleak outlook for the country's future: a deep economic crisis is expected, and many skeptics are wondering whether sanctions can actually lead to a rethink by the government. Examples from countries like Cuba and Venezuela show that sanctioned regimes often do not abdicate or deviate from their course.

Political and social situation

Meanwhile, the domestic political situation in Iran is becoming noticeably worse. Omid Nouripour, Vice President of the Bundestag and Green Party politician, warns of a possible escalation of the conflict between Iran and Israel, which could have fatal consequences for the entire region, including Israel. He describes the situation as a potential “conflagration” and demands that all sides exercise maximum restraint in order to break the spiral of violence and protect the civilian population. The civilian population in particular is suffering from the tense situation, with nationwide shortages of fuel and basic supplies.

Unrest is growing among the population. Many are trying to leave Tehran, while the Iranian leadership has taken few civil defense measures. There are no air alarms and air raid shelters, and people live in constant insecurity, while the anti-regime climate is further suppressed with arrests and internet shutdowns.

In an international context, major foreign ministers, including Germany's Johann Wadephul, called on Iran to return to negotiations over its nuclear program without preconditions. This was also supported by G7 leaders, who made it clear that Iran should not have access to nuclear weapons.

Iran's catastrophic economic and social situation remains a hot topic. Experts are skeptical about whether foreign sanctions will really lead to a change in political behavior in Iran, or whether the pressure will lead to the regime further consolidating its control over civil society. The question remains what will happen next for the country and what consequences the conflict will have for the region.