Electricity Shortage, Sign Of Iran’s Long-Standing Multiple Crises
Although Iran's multiple crises have been surfacing with a new momentum in recent weeks, the country's Strategic Studies Center did forecast at least 100 looming crises in 2017, long before the United States withdrew from the nuclear deal with Iran and reimposed sanctions that paralyzed the economy.
Not every problem Iran is facing in mid-2021 is the outcome of US sanctions. The forecast made in collaboration with Ayandehban [Future Monitor] agency four years ago listed problems some of which are not primarily economic in nature. Some of the 100 crises such as deforestation, the inefficiency of the judicial system and corruption are essentially the outcome of mismanagement rather than the result of economic problems.
Others including water shortage, systematic corruption, lack of confidence in the future, lack of investments and unemployment are more related to economic problems than anything else. However, some of these 100 crises are long-standing problems that are mostly four decades old and reveal the inefficiency of the Islamic Republic as a political system. In essence, it is the lack of democracy and accountability that have led to bad governance and mismanagement.
Some of these crises, such as the implications of Iran's military interventions in Syria, Yemen and elsewhere have nothing to do with Islam or the idea of a Republic. Almost everyone killed in Syria, Yemen, and Iraq as a result of Iran's interventions is a Muslim. The regime's claims about fighting terrorism in Syria is no longer valid after its indifference to Taliban atrocities in Afghanistan.
Nonetheless, no one can deny that a majority of these 100 crises (some 70 of them) rooted in economic problems were not made worse by international sanctions before 2015 and US sanctions after 2018.
When Iran was able to export oil almost as much as it needed, officials threw money at many of these problems just to keep the situation calm without solving the root causes. But sanctions on banking and oil exports have made this impossible.
And then, there is the crisis number 101 which is Iran's inability to improve relations with the United States that would lead to lifting of sanctions and helping to address most of the first 100 crises.
A new report by Mohammad Mehdi Hatami, a writer on economic issues, published by Fararu website on July 8 observed that most of the 100 crises have been triggered at once. The report said that the electricity shortage, which has been temporarily tackled through shutting down steel mills and cement factories is only the tip of the iceberg and reveals only a small part of Iran's economic problem.
According to Hatami, the Iranian economy has been facing a major problem in attracting investments leading to the erosion of economic structures. Consecutive governments have simply failed to invest in the energy sector, while demand has been rising.
At the same time, domestic capital has been diverted to non-productive sectors including Forex, gold and housing or has left the country. Investment in Iran was declining between 2004 and 2019. Lack of investments make infrastructure and industry obsolete, bring about a decline in national production and stop creating jobs. In other words what has happened to the power industry will sooner or later happen in other sectors, further eroding confidence in the governing system.
The Fararu report said: "For several decades in the near future, good economic governance will be the country's most urgent problem. Unlike the 1990s when most demands were political, the demands in the 2020s will be economic as the nation will call for efficiency." Otherwise, Iran is likely to become a "failed state" if the government proves to be incapable of fulfilling its most obvious responsibilities including supplying water and electricity and providing food and medicine.
Currently Iran ranks 44 in the Fragile States Index among 178 nations in terms of resilience against political and social downfall and collapse. In other words, Iran's situation is worse than 134 other countries in terms of legitimacy of the government, balanced development, brain drain, rule of law, and public services.