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Iranian economic problems wrongly attributed to sanctions

General elections are close in Iran, and the country’s economy is in shambles. This situation, however, is not related to the sanctions.

Iran now pumps out as much oil as it can, and foreign companies still compete fiercely for oil and gas development projects there. Skyrocketing oil prices in the wake of the Arab Spring events easily offset whatever small effect the sanctions had on Iran.

Iran’s economic troubles are similar to those of other Muslim countries, from Egypt to Saudi Arabia. A burgeoning population, an influx of rural residents into the towns, an inability to compete internationally in the technological economy, socialist policies with heavy subsidies, gross corruption and mismanagement, unsupportable military expenses—these and other factors combined to devastate the Iranian economy, with or without US input.

Moreover, Iran’s population attributes the country’s economic troubles to the secular government rather than to the supreme ruler. That weakens Ahmadinejad, who is a moderate compared to Grand Ayatollah Khamenei.

And no amount of economic trouble would prompt Ayatollah Khamenei to relinquish his nuclear program, because Shiite military dominance is for him a religious issue.

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