Iran’s Revolutionary Guard given extra billions as economy collapses

Iran’s feared state security forces, which have played a violent role in suppressing nationwide protests, have been allocated $3 billion in the latest budget, despite the country’s collapsing economy.

Announced several weeks late by the government, the budget for the state militia, the Islamic Revolutionary Guard Corps (IRGC), has been raised by 28 per cent. Some experts estimate the actual income of the militia could be as high as $17 billion.

The IRGC is a secretive organisation which also receives income from illicit oil sales and is known to fund terror groups across the region, including Hezbollah in Lebanon and the Houthis in Yemen.

“Leaked audio tapes some months ago revealed that [the supreme leader, Ayatollah Ali] Khamenei reportedly directed 90 per cent of the revenue generated by Yas Holding, an IRGC-linked company, be given to the IRGC’s Quds Force, so they are not solely dependent on the national budget,” said US-based Iran expert Jason Brodsky, policy director of United Against Nuclear Iran.

Last year, the Hamas leader, Ismail Haniyeh, revealed that Iran had recently given $70 million to the militant Palestinian group — proscribed by the UK in 2021 as a terrorist organisation — which runs the Gaza Strip to help it develop missiles and defence systems.

UK politicians are now calling for the IRGC to be designated a terror group. The foreign secretary, James Cleverly, announced last month that sanctions had been imposed on the IRGC after it emerged that it was planning attacks on Iranian dissidents living in the UK.

The budget of Iran’s regular army has also increased by 36 per cent to over $1.22 billion and the police budget will rise 44 per cent to reach $1.55 billion. The intelligence ministry has received a 52 per cent boost, the equivalent of about $500 million, and funding for prisons has been increased by 55 per cent, or $230 million.

Since protests began in September triggered by the death in custody of Mahsa Amini, 22, who was arrested for the inappropriate wearing of her headscarf, an estimated 19,401 Iranians have been detained. This includes 713 students and 168 children, while 524 people have been killed, according to Iran’s Human Rights Activists News Agency. So far, a total of 11,721 months of prison sentences have been handed out, with at least four protesters executed.

Iranian journalist Kourosh Ziabari said the “militarisation of the budget” is in opposition to the needs of the population. “What is worse is that despite the budget being drafted for a year of austerity, the outlays for propaganda organisations, including the Islamic Republic of Iran Broadcasting [whose budget rose by 49 percent or about $200 million] and religious and cultural entities that usually have little benefits for the general public, have been augmented exponentially.”

Many ordinary people are unable to afford fruit and vegetables as the country’s currency continues to plummet. Prices have gone up so rapidly that consumption halved last year. In the once bustling marketplace of the Iranian city of Rasht, even fruit sellers and bakers can no longer make ends meet. What used to be a hub for the city’s locals — a colourful display of spices, fruits, local sweets and freshly-baked bread — now symbolises Iran’s economic malaise.

“I have stopped bringing in staples in large quantities because they remain on the shelf and go mouldy,” said Mehrdad, who has worked in the market selling fruit for over three decades. Inflation has soared to over 50 per cent, the highest level in recent history, while more than half of Iranians are being pushed below the poverty line, according to the Statistical Centre of Iran.

Ahmad, 70, lives on his $40 a month pension in a rented house with his unemployed son. “My salary is adequate for almost nothing, and it’s used up halfway through the month,” he said. “They have multiplied the water and electricity bills, and the fees are beyond the limits of my capability.”

“When my son was ill a few months back, I couldn’t even take him to the doctor because of how unreasonable the medical expenses are. We can’t even afford to be unwell today,” Ahmad said.

Iran is selling off its oil at heavily discounted prices as western sanctions cripple the country’s energy revenues, according to Iranian economic expert Mardo Soghom. He said it is now being sold for $37 a barrel — which means only $7 profit per barrel — to China.

“During Trump, China was buying much less, 150,000 barrels a day, but after the Biden era, oil exports to China increased tremendously to 700,000 a day,” said Soghom. The regular price is more like $70 a barrel.

Even though the country is sitting on the world’s second largest gas reserves after Qatar, it also lacks the technology to maximise its great wealth. Iranians are being told to turn down their heating in the middle of winter.

 “They need bigger platforms and huge pumps in order to extract the gas,” Soghom said. “Even their distribution network is a source of waste, around 40 per cent of energy getting lost, including electricity. They have had to shut down factories in order to get heat to households and last month, the government cut gas to 800 government entities to divert energy to homes because there was a snow storm.

“To improve production, the government needs about $40 billion in investments and western technology,” he added. “This kind of technology is only available to western firms like Total and Exxon. China and Russia don’t even have this. Russia relies on BP for this kind of stuff, so with this foreign policy they [Iran] have, stuck in their animosity with the West, they have neither the money nor technology to improve like Qatar does.”