When in 1979 the mullahs took the power, they “did not nationalize” the private sector but removed the gambling on the stock exchange by “nationalizing the economy” and “privatising the exercise of power”: the State was fragmented and each piece entrusted to a clan.

Many clans have family ties, but these ties did not prevent the internal quarrel or the competition between two rival clans. The chief of each clan is commonly one of the mullahs who gave their support to Khomeiny for the seizure of power. Thus, at the same time the State and the economy were privatising and entrusted to families who manage their sector: the power and the economy are by this way hostage of a mafia environment.

This economy is primarily based on the speculation and on the black markets. Apart mullahs, there are in the Iranian politico-economic landscape the Revolution Guards who act individually or in group. The security of all components of this Mafia relies on them. This protection has a cost and in reciprocation for their loyalty, these militiamen, who are ancient ex-convicts or loots before the revolution, are continuing to receive some shares of the cake.

It is this mullahs and militiamen’s oligarchy which manages the political, diplomatic and economic businesses of Iran. It is not a question of simple social climbers, it is worse. The social climber undoubtedly has professional capabilities of which these characters are devoid of. Their arrival with the businesses relies on geopolitical circumstances and not on their competences. Their competences are dependent on the manipulation of the masses, repression and terrorism.

The mullahs immediately understood the need to influence in Lebanon, in order to become an aggressive regional power. They exploited the Europe-America divisions and at the same time as their armed terrorism, they undertook to politicize their economy in order to obtain the kindness of the commercial allies to counter the American adversity.
There is therefore in Iran a particular field, the oil (but not only), which must guarantee the survival of the regime. By practising, the cheaper oil prices of the market, the regime has gained the support of some intermediate powers. In counterpart to this protection, the major part of oil is sold at low prices (with the Buy-back selling method) and only 20 to 30% are sold at market prices. In parallel, the partner States agreed to invest important capital in Iran, investments which fed the sectors reserved to the various clans.

These investments were not advantageous to the Iranian economy because the capitals were not managed to create richness for all Iranians but for personal enrichment (for the chiefs of the clan and their offspring in constant growing). The profits were never invested for the renewal of the equipment, industrial modernization, research or education. They were absorbed by official companies managed for life by one clan or another. At the same time, the population had grown poorer and the domestic market ceased existing. Outside the country, the Iranian economic success is not recognized.

It is probable that the foreign investors done well out of occasional businesses, but this management has caused the ruin of Iran and destroyed its industrial capacities. The system has functioned as long as the investors blindly continued financing it but it will rapidly collapse if the investment and the oil incomes stop. The oil sold in Buy-Back (presale method) brought a fixed income but not very interesting for Iran (less than incomes received before the revolution | see graphic below) and ensured it the protection of the European and Asian States, these incomes were completed by the share sold at market price to feed the budget of the State.

We can include in this budget the current expenses and also the enormous military expense, the salaries gave to million militiamen and the government subsidies (like those for the gasoline and for bread), but we should not forget the economic and military aids (missiles, weapons, equipment) to the Hezbollah, the Hamas and to the hundreds islamist movements.

The mullahs’ regime spends money like water to award the loyalty to external or interior groups. It also invests with loss important capital in outlaw countries and ruined such as Byelorussia, Zimbabwe and many other African states in order to attract the votes of these UN Member States. This wasteful regime must also face to the growing needs for the clandestine nuclear program which requires prohibited components which worth their weight in gold.

There are thus several handicaps which undermine the Iranian economy: a timeworn industry which has became bankrupt, very high (international) expenses which are always increasing (500 million dollars for Hezbollah, 250 million dollars for Hamas…), oil incomes decreased to obtain a diplomatic protection and contracts granted to foreign powers for the same reason.

As a consequence Iranian textile industry was sacrificed and this market entrusted to China as the Iranian car industry was sacrificed to the profit of France. Iran is a country for sale.

This country does not produce anything, but sells everything. As we specified, a small part of the Iranian oil production is sold at market prices, but this part (undeniably insufficient) did not permit to the mullahs to reconstitute reserves and to refund their debt even when the prices were highest: Russia and Algeria reached that goal within the same time frame.

The Iranian economy is based on the clearance sale of the various industrial sectors, heritages from before the revolution. It is also based on the export of the oil (which an important part is sold at a ridiculous price and small a part at normal price). Today the oil prices are falling down and this last gross profit will disappear soon: the mullahs’ situation worsens. They have no choice anymore! Unless removing certain expenditure (nuclear power or terrorist), they are condemned to the bankruptcy. The foreign investments are exceptional: The headlong rush is also condemned.

They are in front of realities which they could not explain to the Iranians: the financial health of Iran is bad and the tendency is worse. Thus the confession of the loss of the reserves is a first step and the announced balance of 75 billion undoubtedly does not correspond to capital “given to the Russians”, but to the whole capital which has disappeared in unpublished expenses of the regime :
 Various misappropriations of founds,
 corruption,
 bad investments,
 Flight of capital…
 And once again, it is a question of accusing enemies… foreigners !

Because there still remaining from now only two possibilities for the mullahs: to seek war or to escape. It is probable that all will not do the same choices, but it is also true that all do not really have the choice. Thus Rafsandjani, with a criminal record heavier than the Saddam Hussein one’s, has only the choice of the confrontation and it will involve with him his friends and its allies.