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Iran’s Economy in Tatters

Michael Sharnoff

Writing in the Wall Street Journal last weekend,Farnaz Fassihi noted that declining oil prices and soaring inflation have battered Iran’s economy. In July, a barrel of oil cost more than $110. As of last Friday, the price had plummeted to less than $34 per barrel. Economists now predict that this flaccid oil economy will yield Iran a $50 billion deficit in 2009.

It is ironic that only weeks ago, Iranian leaders cheered on the U.S.financial crisis, hoping for an economic collapse. Indeed, Tehran’s leaders believed that U.S. economic hardships would shift attention away from its nuclear program, not to mention its support for global terrorist organizations.

Things have not gone according to the Mullahs’ plans. With economic hardships mounting, Iranians are increasingly critical of Tehran’s fiscal irresponsibility, its failure to create new jobs, and its continued misallocation of resources to build nuclear weapons. As analyst Gal Luft predicted in the inaugural issue of inFOCUS, Iran’s faltering oil economy may ultimately undermine the Mullahs’ stranglehold in Tehran.