Just The Facts

Iran Protests: The “Military Economy” Dimension

A big share of Iran’s economy is owned by the business wings of the armed forces.

Takeaways


  • Some of Iran’s recent protesters have wondered why public defense spending is so high, even though the military has its own private sources of revenue.
  • Like some of the other armed forces in the region, Iran’s military owns 40% of the entire GDP of its home country.

1. Some of Iran’s recent protesters have wondered why public defense spending is so high, even though the military has its own private sources of revenue.

2. Like some of the other armed forces in the region, Iran’s military owns 40% of the entire GDP of its home country.

3. This largely came about through past “privatizations,” followed by further acquisitions (using the revenue streams from those enterprises).

4. There are also many government infrastructure projects with a specified military contracting role.

5. Military-owned companies operate, for example, in Iran’s construction, manufacturing, finance, insurance, communications and entertainment sectors.

6. These ownership stakes provide the Revolutionary Guard and other military branches with substantial off-budget funds.

7. The military’s large – and very obscured – share in the country’s economy contributes heavily to a public perception in Iran that corruption is a big problem.

8. That perception is so strong that it puts Iran 131st of 176 in the 2017 Transparency International rankings.

9. Nevertheless, Iran’s public treasury spends billions on the military even as cuts to social spending are made.

Sources: The Globalist Research Center, Al-Monitor, Transparency International, Wall Street Journal

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