On Iran’s Weakened Economy

WHAT WAS SAID:

“Economically, we see how the regime’s decision to prioritize an ideological agenda over the welfare of the Iranian people has put Iran into a long-term economic tailspin. During the time of the nuclear deal, Iran’s increased oil revenues could have gone to improving the lives of the Iranian people. Instead they went to terrorists, dictators, and proxy militias. Today, thanks to regime subsidies, the average Hezbollah combatant makes two to three times what an Iranian firefighter makes on the streets of Iran. Regime mismanagement has led to the rial plummeting in value. A third of Iranian youth are unemployed, and a third of Iranians now live below the poverty line.”

THE FACTS

Fact and conjecture.

Iran used at least some earnings from oil, including money impounded by sanctions but released when the nuclear deal took effect in 2016, to fill deficiencies in its budget. Iran also spent enormous sums to attract investment, buy and refurbish airplanes and ships, and provide financing to stimulate the economy. The decline in the rial, the national currency, has been attributed by economists not only to mismanagement but to the negative impact of President Trump’s decision to renounce the nuclear agreement in May and restore the sanctions.

Mr. Pompeo’s basis for the wage comparison of Hezbollah fighters and Iranian firefighters is unclear.

While youth unemployment in Iran is widely believed to be at least 30 percent, that figure is comparable to or below that of other countries in the Middle East as well as Spain and Italy. On Iran’s poverty rate, Mr. Pompeo’s assertion is disputed. A 2016 World Bank working paper suggested it was less than 10 percent, according to Djavad Salehi-Isfahani, a Brookings Institution scholar who participated in the research.

WHAT WAS SAID:

“The bitter irony of the economic situation in Iran is that the regime uses this same time to line its own pockets while its people cry out for jobs and reform and for opportunity. The Iranian economy is going great – but only if you’re a politically-connected member of the elite. Two years ago, Iranians rightfully erupted in anger when leaked paystubs showed massive amounts of money inexplicably flowing into the bank accounts of senior government officials.”

THE FACTS

Fact and omission.

Mr. Pompeo was correct that corruption in Iran’s government is pervasive, a fact that President Hassan Rouhani of Iran has acknowledged. Mr. Pompeo was also correct in describing the popular anger that erupted over the leaked paystubs — but did not mention that some officials had leaked the information and that Mr. Rouhani ordered an investigation into the pay, which entangled associates that included his own brother.