Why Iran's Economy Needs to be De-Militarized?

Recently, verbal tensions have intensified between the President and the commanders of the Revolutionary Guards regarding this institution's interference in economic affairs. This tension and disagreement is not new and includes topics such as resistant economy, fighting corruption, combating money laundering, and even foreign policy. However, the question arises as to why the President's criticisms of the Guards' interventions have intensified. The President's stance on de-militarizing Iran's economy is not coincidental; rather, it is the result of a long research and legal process by various institutions such as the Research Center of the Parliament, the Expediency Council, and the Islamic Consultative Assembly, as well as the so-called rationalists of the ruling system. The government has rightly determined that de-militarizing Iran's economy is a prerequisite for solving issues such as administrative and financial corruption, money laundering, reducing the size of the government, increasing efficiency, and attracting foreign investment. According to government expert estimates, domestic investment does not meet internal needs. For example, the Minister of Oil speaks of a need for $200 billion in investment in the oil industry, 70% of which must be sourced from foreign resources. Therefore, government officials have announced that there are no barriers or restrictions on foreign investment. However, the reality is different; a significant barrier such as the Revolutionary Guards and other institutions under the supervision of the Supreme Leader resist any kind of opening of Iran's economy to the world and the entry of new capital and technology. The Guards' empire consists of banking and credit activities, contracting in construction and oil projects, chain media, foreign policy activities, interference in the internal affairs of other countries, etc., and has become a barrier to economic development. The President must now choose between fulfilling his economic promises of growth and employment and the dominance of the Guards over various sectors of Iranian society, such as foreign and economic policy. A positive foreign policy is the foundation for economic opening and growth; no economic unit in today's world can operate independently of the competitive and friendly global network of production, distribution of goods, and international capital flow. The condition for entering this network is participation in competition and alignment with it. A positive foreign policy, free of tensions and based on cooperation, is a prerequisite for entering this global cooperation network. In this context, active forces in this network avoid any force that disrupts this resource flow. The art of public and economic diplomacy of any country is to facilitate economic expansion. The implementation of the JCPOA was a notable example of the government's efforts towards de-escalation. However, the Revolutionary Guards, as a military and ideological entity, do not hide their desire to dominate foreign sites. Although the Guards' interference in diplomacy related to Iraq, Lebanon, Syria, Yemen, Bahrain, and Saudi Arabia is indisputable, their direct and indirect interference under the supervision of the Supreme Leader is much greater. When the Guards cannot directly guide the foreign policy of the regime, they create events such as the occupation of the Saudi embassy, which incurred significant costs for Iran. With the Guards creating tensions in the international arena, it can be claimed that the opening of Iran's economy to the world and the attraction of investment and other economic resources is nothing more than a naive wish. Throughout the post-revolution period, the sources of fundamental threats to Iran's economy have often been political and military. The so-called resistant economy, according to the interpretation of authoritarian figures and specifically the commanders of the Guards, practically means allocating an even larger share of Iran's economy to military and security institutions and a greater share of construction projects. The 'resistant economy' is a complementary part of conspiracy theory and is akin to concepts such as 'cultural invasion' and 'influence project.' The implementation of the resistant economy, with this interpretation, means further reducing the role of the private sector in Iran's economy. Such a situation disrupts competition in the market, which is a condition for attracting investment and optimizing activity. From a political economy perspective, the overwhelming power of the Guards in Iran's economy is incompatible with Iran's national interests, as the concentration of power and wealth in the hands of a small, unaccountable group engaged in sectarian tensions at the international level will lead to economic resources being utilized in the context of sectarian wars rather than for public progress and welfare. Fighting corruption, transparency, and accountability are prerequisites for entering international cooperation and attracting foreign investment. According to the authorities themselves, administrative corruption in Iran has reached a high level, meaning institutionalized and systematic corruption. The role of entities that are not under oversight and financial transparency, such as the Revolutionary Guards, is very extensive. Although the private sector in Iran has its own specific opaque points, it inherently has less resistance power compared to the Revolutionary Guards. The Revolutionary Guards, with the rent they receive from the leadership of the regime, evade oversight by tax organizations and have opaque economic activities whose resources and expenditures are not under the oversight of civil society and regulatory organizations. The slowness and limitations of cooperation between major international banks and Iranian banks are one of the obstacles to economic growth in Iran. Without cash flow and credit from outside Iran to inside and vice versa, short- and long-term investment is not feasible. Activating international banks in Iran could even encourage the modernization of the organization and management of banks and the effective use of resources in the shadow of competition, and could even reduce transparency, competition, and optimization of credit and banking activities in Iran. Even with the implementation of the JCPOA, Iranian banks still cannot fully benefit from cooperation with major international banks. The condition for expanding cooperation between banks active in the global arena and Iran's banking system is the compliance of Iranian banks with global regulations, including combating money laundering and not dealing with sanctioned entities and individuals. Since global banks are unwilling to open their doors to the financial and credit system of Iranian banks, they risk being exploited and incurring heavy fines. Because Iranian banks are currently susceptible to becoming a conduit for the entry of tainted money into the global banking system, Iran's economic and banking system is in a condition that makes it susceptible to money laundering. The political, media, economic, and regional military activities of the Revolutionary Guards have become one of the obstacles to achieving the economic slogans of Hassan Rouhani's government. The interference of this military entity is not only about seizing rent and cheap public resources and avoiding transparency and accountability. Although the commanders of the Guards claim to use resources in construction and infrastructure, it is clear that the Guards' actions are about distributing rent and privileges among their supporting groups and seeking power at both the domestic and regional levels. The expansion of the Guards means the elimination of competition in the market for goods and services, discrimination in the distribution of job opportunities and economic resources, and the dominance of a small group over the fate of Iranian society.