The situation in Iran has not been as sensitive and unusual as it is now since 1979 [Islamic Revolution]. Political and economic risks are at their highest; forecasting economic indicators such as inflation, economic growth and exchange rate has become immensely difficult and practically impossible thanks to the increasing tension with the world, hardships and sanctions, as well as coercive control that has led to all kinds of restrictions in the real world and filtering in the virtual space.
This was stated by Jafar Kheirkhahan, an economist, in an article for the Persian economic daily Donya-e-Eqtesad. A translation of the text follows:
Contrary to what was advertised and expected, the move toward integration of decision-making bodies in the past few years has fired up protests. What happened in practice were contradictory and inconsistent comments about opponents; now we have senior officials who are unable to practice what they preached.
Cooperation and empathy have been replaced by conflict within the society and with the government. The initial protests of the past two months have created a very unstable situation; they have turned into widespread riots and violence.
An important and neglected element with a very high and unpredictable effect is the entry of new players who can influence the mentality and attitude of a large part of the society; its consequences will gradually become visible in the type of actions and reactions within the system.
You should expect to see a decline in the support of a majority of people toward the policies and decisions of the government and even move toward neutralizing them. Just as large-scale corruption acts like pebbles in the gears of the economy, disobedience, sabotage and non-compliance with policies prevent the smooth movement of the economy and make life harder for everyone.
As a result, Iran’s economy has passed the stage of a chronic disease it was suffering for several decades to confusion and extreme frustration beyond the strength of all its components. Under the circumstances, rumors and lies and not the goals, long-term plans, wisdom and specialties become determinative.
With such a change in people’s perceptions, cooperation turns into non-cooperation. People will be in perpetual fear and rush to various markets; rumors make the economic variables volatile. These so-called psychological factors play the main role in affecting the markets. In other words, every comment by politicians gives rise to various interpretations rather than being enlightening and helping economic players in their planning and decision-making.
The psychological tendency formed among the majority of people to not cooperate with the government leads the country to a war of attrition. If the society decides to confront, it will inflict heavy losses on itself and the economy. Consequently, the cost of economic exchanges will increase exponentially, the productivity will turn negative, providing services and normal routine of businesses will become more expensive and dissatisfaction will grow even more.
Given the gradual formation of various challenges that have been the result of negligence in previous decades, we will see the emergence of super challenges that become real by the moment. The type of confrontation of other countries and Western powers in relation to the government, mechanism of dissatisfaction cycle.
A famous maxim says, “Forecasting is difficult, especially if it is about the future.” I say it is impossible to predict Iran’s economic future under the current critical conditions because everything completely depends on all kinds of strategies, tactics, clout of conflicting powers and new hidden and visible forces that enter the equation.
