NCRI – Hassan Rouhani claims that one of his government’s economic achievements and records during his presidency is that Iran’s economy was collapsing and the JCPOA has saved it. However, when it comes to the evaluations and analyses of major industrial brands’ achievements during his presidency, one would clearly observe the fact that industry and industrial corporations are in crisis within Iran.
In this regard Nasim a news website in Iran, writes, “The closure of more than 30 famous brands and old established factories, such as Arj, Darougar, Azmayesh, Pars Electric, Isfahan polyacryle, IRANA tile, Tabriz Machine manufacturing, Iztech, Isaac bicycles, Varamin Sugar Factory, Swan Oil Factory, Ray Textiles and Iran wood, are only portion of the important country’s production companies that have pulled down their shutters during Rouhani’s presidency.”
This State-owned site goes on to mention, “Rouhani is the one who had promised flourishing of the Iranian economy in 100 days. Not only has he not improved people’s living standards these past 4 years, but according to most economy activists and experts, the economy has reached an unprecedented recession in its years after the revolution. One of the results of his economic activities was an economic downturn and the closure of famous brands whose names are associated with the lives of all Iranians. Unofficial statistics indicate that closure of these brands have led about one million people being unemployed in past four years.”
It is, of course, very obvious that factories would close or become bankrupt in other countries as well or one brand is replaced with new ones due to their marketing management weaknesses or poor quality, which cause them to lose their market share. This is an event that has just happened in Iran. But what makes Iran’s situation so particular is the number of closures and another is the history of the brands, which all were famous for quality and profitability. Their disappearance was not because of poor quality or that better products were created in Iran, but mass legal and illegal imports have replaced domestic production and caused the closure of factories, one after another.
In other countries, manufacturing centers in the competition typically lose market-share and go bankrupt or another factory with a cheaper, more modern or more appealing product takes over the market and places the competing markets or manufacturers out of business. Of course, it is most of the time not a permanent state of affairs and may only happen for a period of time. After correcting its course, then the business again returns to market. Under the Iranian regime, when factories are shut down, it is forever and their workers are, without any support, placed out of work and their lives become endangered.
It should be noted that the bankruptcy of this large number of industries and factories logically cannot be entirely the product of a period of 4 years. The destruction of so many industries is the result of a total economic policy of the country. It has nothing to do with the governing of this faction or that faction. Statistics, for example, indicate during Ahmadinejad’s presidency, 50-70% of the factories were shut down. The difference between Rouhani and others lay in the fact that he claims to have a key for solving these economic problems and claimed to have achieved economic growth and lowered inflation. Meanwhile, closures, bankruptcies, unemployment and people’s empty tables are there. Deceitfully, Rouhani claims that the economy has improved. Regarding the closure of factories, particularly the oldest ones, several causes can be cited but the main causes are the following factors:
Transfer of factories to “so called” private sectors, but they are fundamentally not private sector. Instead, they are entities, such as Iranian Revolutionary Guards, which do nothing other than the plundering of properties and factories;
Existence of State jobber gangs which import foreign goods with lower custom tariffs and putting domestic manufactured goods out of the market, the existence of vast and established smuggling, a lack of cash for the industries not affiliated with the government and lack of government support for domestic production, sabotage and purposely withholding needed raw materials at customs;
Lack of factories’ raw materials, poverty and the weak public’s purchasing power resulted in the accumulation of goods in storage;
Obtaining heavy taxes from factories and manufacturing shops and continued municipalities’ extortions and governmental organs of producers.
Of course, one can say in between that main reason is the occupation of Khamenei and IRGC of Iran’s economy with an investment monopoly and they have private harbors for a vast network of smuggled goods without being responsive to anyone. So, no energy is left for the country’s economy.
The root cause of economic problems in this regime aren’t purely economic, but are political and its roots go back to the governing structures.
With an administration like Rouhani, which is known for astronomical salaries and a president who doubled the budget of IRGC, the arm of suppression and terrorism under his responsibility, this problem will not be solved. The problem intensifies each day. As long as this structure and governance exist, one will witness more factory closures and the complete economic collapse in Iran.
