Why the Iranian regime spends millions in other countries, but not at home

Today, nearly half of all Iranians live below the poverty line, a number which, according to a report published by the Statistical Center of Iran, will increase to 57% in the near future. Nevertheless, this has not kept the Iranian government from investing its money in order to achieve influence in other countries, such as Syria, Lebanon and Iraq. Analysts say the regime is focused on global power instead of domestic prosperity.

Iran’s oil minister Javad Owji has warned in 2021 of a major natural gas shortage this winter, saying that a daily loss of 200 million cubic meters of natural gas is already causing power cuts. This follows petrol and fuel shortages last summer.

However, in Lebanon, the militia group Hezbollah is almost entirely supported by Iran. Hezbollah has been coordinating Iranian fuel shipments for Lebanon since August, at a time when a large part of the Iranian population could be without heat in the coming winter.

In Iraq, the Iranian regime continues to push its agenda. Iran spends billions in Iraq, despite the uncertain state of its own economy.

“It has become clear that Iran’s economic woes—especially its currency devaluation—are strongly correlated with key political and geopolitical events. The volatility in the exchange rate and Iran’s currency depreciation are signs of an unhealthy economy,” the Carnegie Endowment writes. The rial has reached its lowest value against major currencies and inflation is at an all-time high of 45 percent.

In Syria, Iran has invested massive amounts of resources and effort to keep President Bashar al-Assad in power as long as possible. Iranian security and intelligence services advise and assist the Syrian military in order to preserve Assad’s reign. Iran is also setting conditions that would allow it to continue to use Syrian territory and assets to pursue its regional interests should Assad fall.
“Iran’s involvement in both countries has also had other immeasurable costs. What is dubbed by many as Tehran’s “malign activities” in the region is partly its military and intelligence network of proxy forces in Iraq and Syria. This played a major role in Donald Trump’s withdrawal from the 2015 nuclear deal (JCPOA) and imposition of crippling sanction in 2018, as well as the deterioration of Iran’s relations with Persian Gulf Arab states. It also hurt the Islamic Republic government domestically, as ordinary people ascribed the increasing economic hardship they faced in the last ten years to national wealth being spent in the region. When the Islamic Republic was shaken by mass protests in recent years, one could frequently hear slogans from protesters against aid to Hezbollah, Hamas and Bashar al-Assad,” according to a report in Iran International.

These efforts have evolved into an expeditionary training mission using Islamic Revolutionary Guards Corps (IRGC) Ground Forces, Quds Force, intelligence services, and law enforcement forces. The deployment of IRGC Ground Forces to conflict abroad is a notable expansion of Iran’s willingness and ability. “For example, every fighter in the Fatemiyoun brigade is given anywhere from $450 to $700 monthly, which makes the militia the highest paid by Iran. For other militias, Iran pays salaries between $200 to $300 and, for local militias, such as Nubl and Zahra Brigades, it gives less than $100 month,” according to the Atlantic Council.

Meanwhile, the Iranian regime has had to cut back on subsidies that the population has relied on since the 1980s on due to lack of funds. “Yet, over time, these subsidies have become a heavy burden on the state budget. In the last decade, the regime made several attempts to reduce this burden, but has always been unsuccessful. By 2020, the volume of energy subsidies alone was estimated to be $75-80bn, one of the highest in the Gulf region,” the Atlantic council report shows.

According to the World Bank, a sustainable and inclusive growth model for Iran would require urgent reforms in areas such as energy subsidies, pension system, water scarcity management, and a comprehensive restructuring of the banking system. The Iranian regime lacks the funds to achieve these reforms, but continues to spend billions on foreign policy. The fate of Iranian people who endure the suffering this behavior imposes depends on whether the regime will decide to put its own citizens above its avarice and desire for international influence.