Iran Feels Pain Of Falling Oil Prices

America’s economic crisis has been the subject of glee among Iranian leaders who regard the downfall of Wall Street as some sort of thunder belt hurled by God at the unbelievers. The laughter is now being replaced by grim faces as Iranian clerics suddenly realize economic troubles in the West reduce demand for oil and move those nations in the direction of finding alternative fuels. As gas prices drop, President Mahmoud Ahmadinejad is compelled to confront the reality his administration squandered billions of dollars on supporting fuel or food prices or supplying militants with arms rather than investing in developing the Iranian economy. Mohsen Safari Farahani, a former lawmaker and economist, noted: “The Iranian people got a golden opportunity in history. But it was buried under this government’s wrong policies.”

The government discovered it only had $9 billion left in the rainy day fund which is used to bolster the currency, import food, and pay off debt. Economists estimate Iran received over $200 billion during the past three years due to dramatic rise in oil prices, but little of that money was used to develop a modern diversified economy or rebuild the nation’s infrastructure. Inflation is now at a 27% rate and the stock market declined by 12%.

Perhaps, if Ahmadinejad spent less time denouncing the American imperialists and more time working on the Iranian economy, employment figures would be higher. Iran needs a reform president who can work with the west and help the country develop a modern economy.

  • Daniel

    Did you see the Tom Friedman column the other day? He argued that with the drop in oil prices, the US finally has leverage against Tehran. This could make direct negotiations – initated at the behest of a President Obama – more fruitful.