Iran steps up military funding as economy collapses
Iran’s Islamic Revolutionary Guard Corps (IRGC), which has played a key role in crushing protests since September, has been allocated US$3 billion, an increase of 28 per cent, in Tehran’s most recent budget.
The UK and European Union are considering adding the IRGC to their list of terrorist organisations with Germany, the Netherlands, and the Czech Republic lobbying for the change.
While Iranians struggle with rising food prices, observers estimate the actual income of the IRGC could reach US$17 billion.
Iran’s spending on its army also increased by 36 per cent to over US$1.22 billion. Spending on the police will rise by 44 per cent to US$1.55 billion. Prison funding has risen by 55 per cent.
Protests began after the death in custody in September of Mahsa Amini, 22, and around 19,400 Iranians have been seized since. An estimated 524 people have been killed, reported Iran’s Human Rights Activists News Agency. At least four protesters have been executed.
As prices rose, Iranian consumption halved last year.
Inflation has exceeded 50 per cent, the highest level in recent history, while more than half of the population are now below the poverty line, the Statistical Centre of Iran reported.
Western sanctions mean Iran is selling its oil at around US$37 a barrel at around US$7 profit, according to Iranian economist Mardo Soghom. The market price is over US$70 per barrel.
“During Trump, China was buying much less, 150,000 barrels a day, but after the Biden era, oil exports to China increased tremendously to 700,000 a day,” said Soghom.
Iran has the world’s second-biggest gas reserves after Qatar but its technological limitations mean it cannot be exploited.
“They need bigger platforms and huge pumps in order to extract the gas,” Soghom told The Times. “Even their distribution network is a source of waste, around 40 per cent of energy getting lost, including electricity. They have had to shut down factories in order to get heat to households and last month, the government cut gas to 800 government entities to divert energy to homes because there was a snow storm.
“To improve production, the government needs about $40 billion in investments and western technology,” he added. “This kind of technology is only available to western firms like Total and Exxon. China and Russia don’t even have this. Russia relies on BP for this kind of stuff, so with this foreign policy they [Iran] have, stuck in their animosity with the West, they have neither the money nor technology to improve like Qatar does.”
Iran’s Islamic Revolutionary Guard Corps. Picture credit: YouTube