In an unprecedented move, the Trump administration announced its plan to dub the Iranian Revolutionary Guard Corps (IGRC) a terrorist organisation. This is the first time a state military organisation has been given this designation in international politics. The move quickly drew criticism.

The Iranian government responded by considering the US central command as a terrorist organisation in retaliation.

Little impact expected from the move

Analysts believe that this move is redundant, given that the Iranian economy is already under pressure from sanctions. Iran’s ability to supply oil to global markets has been restricted, and other oil producers have been able to capitalize on the opportunity of high oil prices and undersupply from Iran. Saudi Arabia’s Aramco, the largest company in the world, has been able to draw billions of dollars in debt after issuing a bond. Iranian supply had declined by 1.5 million barrels per day.

Struggling Iranian economy

Iran has seen its economy contract in 2018 and it is expected to contract further this year. Unemployment and inflation are at high levels. The Iranian government must take serious actions to stop the downward spiral.

Although the effects of the move by the US are likely to be marginal on Iran’s economy, the damage may be more symbolic in nature. The US had already considered Iran’s foreign operations branch, Quds Force, a terrorist organisation before. All of those actions by the US seem to be in line with Israel’s interests.

The IRGC is not only a military organisation but also a major player with a big stake in the Iranian economy. The designation will be effective on 15 April, and the true impact of it is yet to be seen.