Iran’s stock market rose fast and went down even faster in the span of just a few months. An estimated value of 60 billion dollars has gone up in smoke and millions of people lost their life-saving in the process.
This irrational development has puzzled investment experts around the world. How can Iran’s stock market show such a remarkable growth while every aspect of the Iranian economy is failing? Why would people rush to purchase shares in insolvent banks and loss-making companies?
All normal stock markets in the world are guided by certain regulations to facilitate logical and rational decision making for investors. A stock exchange is required to be transparent and ensure that all participants have instant access to the same information about companies they intend to invest in. Listed companies are required to deliver timely quarterly financial reports and annual financial reports, etc.
Iran’s stock market though is different. It obviously does not meet any of these requirements. People would not buy a single share in any of these companies if they had access to adequate information. Why would they?
In other countries, governments protect investors by preventing abuse and fraud in the stock exchange. In Iran however, fraudsters run the government and rule the country.
Foundations controlled by the ruling mullahs like the Mostazafan Foundation and the Islamic Revolutionary Guards Corps (IRGC) are the major players in Tehran’s Stock Exchange. They knocked the bottom out of companies they owned and then deceived unsuspecting people to buy their worthless shares.
The hike and downfall of Iran’s stock market was a fraud, plain and simple.
The regime’s Supreme Leader Khamenei and its President, Hassan Rouhani staged a scam to suck out the last savings of the people. They desperately need money. This year’s annual budget has a 50% deficit. They have lost 80% of revenues from the oil industry and more than 200 billion dollars in foreign investments and other incomes due to international sanctions.
The regime needs money to stay in power. Khamenei and Rouhani need money to make sure the murderous IRGC can keep torturing and killing people all over the country. They need money to make sure their security forces can keep harassing women on the streets. They need money to make sure their lackeys can keep terrorizing people in Iraq, Lebanon, and Syria. They need money to make sure that regime elites such as the Larijanis, Rafsanjanis, Khatamis, Khomeinis, and all of the other corrupt ruling class can keep living in luxury.
The ruling clerics are not concerned about the population’s living standards, public health, or education. They do not care about widespread poverty or extensive unemployment. Their only concern is to stay in power. The most important task for the mullahs, as the regime’s founder Khomeini once declared, is to hang onto power by any means.
Staging a stock market scam is one of those methods.
Farbod Rezania is a Senior Labor Market Advisor at the Confederation of Swedish Enterprise. He represents the Confederation in the Monitoring Committee for the Swedish European Social Fund Council.