By Faisal Abu Bakr | 2024-12-16

The Iranian regime continues to channel significant resources toward its regional proxies, even as the country grapples with an economic crisis marked by soaring inflation, widespread unemployment and rising poverty, analysts say.

According to Iran's Statistical Center, urban rental prices surged 42% over the past year, outpacing overall inflation by 8.6 percentage points despite government attempts to cap rent increases at 25% in July, Gunaz TV reported.

Even amid these dire conditions, exacerbated by currency devaluation and mismanagement, Tehran announced it was increasing its military budget, which includes funding for the Islamic Revolutionary Guard Corps (IRGC) by "200%."

"Despite the deteriorating living conditions, Iran continues to fund proxy terrorist groups such as the Houthis," economic analyst Fares al-Najjar told Pishtaz.

"This is due to the Iranian regime's priorities, where regional expansion takes precedence over the welfare of its own people," he added.

"Iran lacks any economic vision for its citizens' prosperity," Abaad Center for Strategic Studies director Abdul Salam Mohammed told Pishtaz, noting that it has prioritized regional expansion and the dissemination of its ideology.

The Iranian regime has heavily promoted the doctrine of Wilayat al-Faqih (Guardian of the Jurist) which calls for allegiance to Iran's leader Ali Khameni.

Proxy forces mirror Tehran's approach

The impact of Iran's strategy extends beyond its borders, notably in Yemen, where the Houthis follow a similar pattern in their diversion of resources.

The Houthis collect an estimated annual $2 billion from illegal tariffs imposed on the owners of ships transiting the Red Sea, a sum that surpasses revenues collected by Yemen's internationally recognized government, al-Najjar said.

These funds fail to translate into improved living conditions in Houthi-controlled areas, however, where public sector salaries have remained unpaid since 2016.

"The Houthis are using most of these revenues to buy weapons and serve their military project and black economy," al-Najjar said.

The situation has contributed to Yemen's status as "a starving country," according to Oxfam's October 2023 report, with more than 80% of the population living below the poverty line.

Political analyst Fares al-Beel told Pishtaz he sees direct parallels between Houthi and Iranian governance.

"The Houthis are following in Iran's footsteps," he told Pishtaz. Their shared approach "lies in humiliating, oppressing, starving and frightening peoples."

The effects of Tehran's proxy strategy extend to Iraq, Syria and Lebanon.

"These were countries that used to serve as beacons before getting destroyed economically, service-wise and administratively," al-Beel said.

"The Iranian people are suffering from poverty, famine and difficult economic conditions," al-Najjar said.

"Yet the Iranian regime continues to allocate resources to support the Houthis instead of using them to reduce inflation because it relies on a strategy of exporting its crises."