Trump bets economic pressure can squeeze Iran as regime’s own failures deepen the pain
Trump Signals Shift in Approach to Iran as Economic Pressure Takes Hold President Donald Trump has indicated that he is willing to let economic pressure on Iran take its course, rather than immediately pursuing military action against Tehran. In a phone interview with Axios’ Barak Ravid, Trump stated that the US is “only semi-negotiating” with Iran and is instead focusing on the country’s economic struggles, including massive inflation and a lack of funds.
Iran’s Economic Crisis: A Result of US Sanctions or Decades of Mismanagement? The Trump administration has been pointing to Iran’s financial distress as leverage, but a more complex question has emerged: how much of Iran’s economic crisis is due to US sanctions and the war, and how much is the result of decades of corruption, economic mismanagement, and poor spending decisions by the Islamic Republic? Trump has argued that the US naval blockade on the Strait of Hormuz has exacerbated Iran’s financial crisis, while others point to the country’s long history of mismanagement and corruption.
The Human Cost of Iran’s Economic Crisis The economic pressure is taking a visible toll on the daily lives of ordinary Iranians. A recent investigation by the Iranian newspaper Jahan-e Sanat found that supermarket workers are encountering customers who are shoplifting basic groceries or eating packaged food in stores because they can no longer afford it. The accounts offer a stark glimpse of the strain on Iranian households as prices rise and purchasing power erodes.
Washington Intensifies Campaign Against Tehran’s Revenue Streams The US Treasury Department has intensified its campaign against Iran’s revenue streams, targeting the country’s oil trade, shadow banking networks, weapons procurement operations, cryptocurrency holdings, and sanctions-evasion infrastructure. The campaign, known as Economic Fury, has prevented “tens of billions of dollars” in revenue from being accessible to the Iranian regime and its proxies, according to the Treasury Department.
Expert Analysis: Iran’s Economic Crisis is a Result of Decades of Mismanagement Miad Maleki, a senior fellow at the Foundation for Defense of Democracies and former Treasury Department sanctions official, argues that while sanctions and the war have accelerated Iran’s economic decline, the underlying vulnerabilities were created by the regime’s own policies. Maleki points to decades of corruption, economic mismanagement, and poor spending decisions, including the allocation of significant resources to the military and the Islamic Revolutionary Guard Corps (IRGC) at the expense of basic public services and ordinary households.
The IRGC’s Economic Apparatus and the “Gray Budget” The IRGC has built a sprawling economic apparatus that gives it control over major sources of revenue and allows it to profit from opaque channels created by sanctions. The IRGC’s economic arm, Khatam al-Anbiya Construction Headquarters, has become a major force in the Iranian economy, and the Treasury Department has designated it as an IRGC engineering arm used to generate income and fund the organization’s operations. Maleki estimates that the IRGC’s “gray budget” could add another 50% to 100% to its military outlays, further exacerbating the country’s economic crisis.
The Impact of Sanctions on Ordinary Iranians Morad Tahbaz, an Iranian-American conservationist who spent nearly six years imprisoned in Iran’s Evin Prison, argues that sanctions have created a lucrative “franchise” for those controlling the channels through which money and goods move. Tahbaz says that the sanctions have effectively created a black market, gray market, and illegal smuggling networks, which hurt the people of Iran the most. He also notes that the entrenchment of the IRGC-linked economy may complicate efforts to end the confrontation, as those profiting from restricted financial channels have an incentive to preserve them.
Treasury Department Maintains Humanitarian Exceptions to Sanctions The Treasury Department maintains standing authorizations intended to limit the effects of sanctions on ordinary Iranians, including certain humanitarian trade involving agricultural products, medicine, and medical devices. The department also considers additional requests on a case-by-case basis, according to a spokesperson. The authorizations are contained in OFAC regulations and General License 8A. Source: WorldNewsAPI | Read original