On the afternoon of February 11th, 1979, the man of wisdom, the voice of freedom, the only hope of independence and dignity arrived in Tehran in an old Chevrolet car, set to bring liberty with himself from France. He is surrounded by people. One is standing on the car boot smiling away, the other is on the car roof shouting to his friends: He’s here! Iran did it. We made history, not knowing what it was. He was Ayatollah Khomeini. The man who masterminded what is regarded as the very few biggest revolutions in the twentieth century. That was a victory. A real victory. But time runs down and victories become failures. Not because they were wrong in essence, but because revolution kills and resurrects. On that very day, they killed Iran and resurrected Islam. Forty six years later, today, Iran and Israel get into war. The nations who were ever-closer to each other just days before the revolution. It seems necessary to look into what Iran lost and what they gained. I am writing therefore to clear up perplexities on the economy and politics of my country in these forty-six years, and I write with hopes, reservations and frustrations, for which I cannot assign a due word but lament.
The economy of Iran faces substantial challenges today. The sky-high inflation, the undeclared unemployment of tons of thousands of young Iranians and the ever-lower value of Iranian Rial all inflict a low living standard on Iranians. Iran simply does not allow flows of foreign direct investment particularly from any Western nation due to various issues such as policy conflict, national security concerns and labour exploitation possibilities. There have been attempts from China and Russia and Gulf countries to invest on Iran’s largest ports like Bandar Abbas and Chabahar or to invest in manufacturing companies through a merge or takeover but most of them due to security issues have failed. One of the main reasons is that Iran aims to stay independent and it does not want a foreign company to have control of its critical industries to keep its sovereignty intact.
But of overriding importance here is that Iran has a protectionist economy, and this is paralysing its commerce. In the car industry, I can claim with certainty, that more than sixty percent of customer purchases are from a single firm called Iran Khodro, which has dominated the car industry for decades. It became a monopoly only due to government’s brutal tariffs, embargoes and manic red tapes that effectively are a big no to Chinese cars, much cheaper than domestic cars, to enter the country in higher volumes. Aside this, the government under the instructions of the Supreme Leader has given considerable subsidy over time to domestic producers of car who already are a monopoly in the market. As unbelievable as it seems, productive and allocative efficiency fall every year and prices hike up day by day. To give you a clue, the Peugeot 206 (you don’t see this much in the UK anymore) has become 20 times more expensive and frankly, no young couple can afford to buy a car until they are nearly retired, assuming they work full time in decent jobs.
The value of Iranian Rial is insanely low. Every one Pound Sterling is 1,210,000 Rials at the time of writing. Although it’s still disputed what could be the exact reason for this, I argue it is due to the very low demand for Rials and very high supply of the currency. Did you even know Iran’s currency is Rials? Probably not, because you have never needed to know! We simply are not present at the global stage of trade and not many tourists or foreigners come to our country to enjoy summer or to go hiking whilst I believe we have much better hiking routes, warm sunny beaches and beautiful snowy winters and urban shopping malls than many other countries I have visited. So if no one comes in, no one needs our currency. On the other hand, many are leaving the country, causing a great supply of Rials. The result is a big depreciation in the currency and as figures suggest, the Central Bank of Iran is just gobsmacked itself and no revaluation policy works anymore.
And as for the inflation – which I am tempted to call hyperinflation – I can assure you it is due to supply-side costs and does not have anything to do with demand. The low-quality educational system, the yet-behind-Europe technological improvements and the slow infrastructure development in Iran, all have caused the inflation rate to be as high as 37% in April 2025. Iranians still curse the stupidity of the former populist president, Ahmadinejad, who literally instructed the Central Bank to print money to be given to people as gifts for his first year of presidency. After that, banks had to nearly stop lending and still by this day, the private banks remain pessimistic and lending is nowhere near starting a business – a hope too big for those who don’t have bribery skills. People have lost faith in Rial, and now many buy gold and keep bank-notes or deposits just for daily expenses. Savings are all in gold or dollars.
Having set the playground of what we are on about, at the end of the day, economics is a victim of politics. If you can remember the opening of this article, you remember when I said we had a warm relationship with Israel before the revolution. So what happened now that we fought a 12-day war? Iran, and let us say the state of Persia, has always feared west. From the days of Achaemenid Empire when Persia was attacked by Alexander of Macedonia, till when Qajar dynasty were subject to repeated attacks from Ottomans and by decades ago when Iran faced Iraqi troops inflicting war on it, it is proved that the west of Iran does no good. This is not what I propose, but there are Iranian historians who argue Iran can never rely on West. Now we understand that Europe and America have the greatest powers and are the best investors and traders Iran could see coming in. The American investment in Iran can increase demand for Rials, leading to an appreciation of currency. It can bring in technology that may reduce cost-push inflation and it can bring prosperity by lower prices as it will force domestic monopolies out. However, Iran fears, as it long has feared, that America colonises Iran like it did in the time of Shah Mohammad Reza Pahlavi, which had rendered Iran a puppet of desires and orders of America in Middle East. That is why we continue to lose, it is because we are in a dilemma of becoming dependent but prosperous or staying strong but miserable.
Political rationality usually fails in Iran due to something we call expediency. There is always a justified complacency in the circle around the Supreme Leader that makes every decision logical without any thought put into it. Many economic projects that could have boosted the Iranian economy are still being cancelled or postponed to be investigated further. This belatedness in policymaking and frequent changes in government’s position in following an agreement or sudden instructions from the Supreme Leader to stop or start a project is an inevitable burden on efficiency of the government. It has always been hard for the government to endure the irrationality of leadership and hard for the leadership to tolerate the new-thinkers who oppose that expediency. That has always been the case in Iran, even long before the revolution but between clergymen and governors. You saw the government of Iran stating that the nuclear facilities were ‘severely damaged’ after Israeli strikes while at the same time the Supreme Leader said ‘no damage’ has been caused. This expediency does not only involve politics, but also economics. I heard from an Iranian diplomat once that the huge investment of UAE on southern Iran got simply rejected on an evening about ten years ago when the relevant minister said ‘Look, we are not looking for trouble and we are better than them – we will invest better. Tell them the project is refused’. Therefore, this complacency tied with expedience kills any opportunity, let alone diplomacy. Albeit, I’m willing to mention that the diplomacy between Iran and America is not the problem of these two matters, but rather the missing overlap of mutual advantages.
To come to an end, let me make clear that politics should never – and I repeat to insist – never combine with ideology. This was exactly what took place on February 11th 1979. And until Iran is ruled by Islamic thought, it is doomed to have a weak economy. The world has changed since 1979 but the policies of the system ruling in Iran, have barely changed. Iran needs change. It’s Iran, now or never. However I presume that the plan Trump dreamt of – a regime change – is nowhere near the reality. There is no opposition party, no person competent enough who is not secretly killed or imprisoned by the government, who can lead a revolution. It’s Middle East, where no democracy works. It is dictatorship that can keep Iran – where every city seems like a different country – together and unaffected by protests or division demands. People of Iran are tired. They really cannot undergo another change, another revolution. And some even do not care much! You – who is reading this – are probably walking on Houghton Street in London, thinking about the terms I used in previous paragraph and whether I used FDI correctly or not, because you are well-educated. To the villager on the farmland far away from city and television, he who does not know who the Supreme Leader is and who the president might be or what FDI is, the notion of revolution seems ridiculous. And never forget, Iran is not Britain. We are people who can simply choose to die for freedom. People with close hearts, sensitive emotions, family-oriented and social lives. This is not what you find in London, where you live alone, where you don’t have time to cry because you are at work till eight in night and where you cannot think of what freedom is, because you have always had it.
I write to the end of my article, with lament. With grief for that beautiful six-year old girl who died under Israel’s attacks, left by her country, left by the world, left by fate. And writing this piece places me at no ease, as I fear the government to punish me some day when the read this passage because of my criticism, something not allowed in this government. But I have hope, for the country I owe my identity to, to flourish once again, and to see good days coming.
