Sociologist Mostafa Mehraeen warned Ali Khamenei in an open letter that Iran is on the verge of collapse and urged a swift return to negotiations with the United States.
“Do not make people’s lives and the state of the country even darker than they already are,” Mehraeen wrote.
The core dispute is enrichment.
While Iran has signalled willingness to eliminate its stockpile of highly enriched Uranium (HEU) and accept more intrusive inspections, it insists on its right to enrich Uranium to low levels (LEU) for peaceful use.
Trump argues that even this capability leaves Iran with a latent weapon option.
Iran’s enrichment programme has long served as a symbol of national pride. But beyond its political value lies a costly, outdated infrastructure with limited technological merit and major economic consequences.
This article examines the evolution and efficiency of Iran’s programme, its global standing, and the burden it has imposed on the country’s economy and people.
Missed chances and escalation
Iran’s Uranium enrichment began in 1987, amid the Iran–Iraq War, with help from Pakistan’s A.Q. Khan network. The programme’s roots, however, go back to the Shah era of the 1970s, when Iran pursued a civilian nuclear project under the US-led Atoms for Peace initiative.
In the 1990s and 2000s, Iran partnered with China and Russia on development of nuclear power plants while covertly constructing enrichment facilities like Natanz and Fordow, later exposed to the IAEA.
In the early 2000s, Iran had an opportunity to demonstrate transparency. But the concealment of facilities and obstruction of inspections—combined with no clear economic rationale—fuelled suspicion.
Years of negotiations led to the 2015 JCPOA, which capped Uranium purity and stockpiles, reduced centrifuge numbers, and expanded IAEA oversight in exchange for sanctions relief.
The deal also aimed to reintegrate Iran into the global economy. Although President Hassan Rouhani supported limited engagement, the Supreme Leader blocked foreign investment and rejected deeper ties with the US.
Trump’s 2018 withdrawal from the JCPOA marked the collapse of that effort. Iran responded by breaching its commitments gradually, leading to the reimposition of sanctions.
Powerful actors – especially the IRGC, which benefits from sanctions and thrives under isolationism or a “Protection for Sale” framework – opposed the deal from the outset.
Ultimately, the enrichment programme became a political tool rather than an energy strategy, a token of pride pursued at the cost of people’s welfare.
An outdated, inefficient program
Iran’s programme relies heavily on IR-1 centrifuges, based on 1970s Pakistani designs. These machines are inefficient and prone to malfunction. By contrast, advanced enrichment facilities in the West use high-output centrifuges that deliver more work per unit of energy.
Although exact figures remain classified, estimates suggest Iran’s enrichment costs per Separative Work Unit (SWU) – a standard measure of enrichment effort—range from $200 to $300, compared to roughly $40 in advanced economies.
Iran’s Uranium mining is equally inefficient. According to IAEA data and Iran’s own reporting, the production cost of Uranium oxide (U₃O₈) stands at around $1,750 per kilogram, compared to $60 in Canada.
Iran’s commitment to nuclear self-sufficiency – while politically expedient – has become economically self-defeating.
Worse, there is little domestic demand for Iranian-enriched Uranium. The Bushehr nuclear plant operates on Russian fuel under contract. No Iranian reactor uses domestic LEU. Globally, most countries import nuclear fuel rather than enrich it – making Iran’s programme economically irrational and strategically symbolic.
Sanctions: a decade of economic pain
Iran’s nuclear stance has exacted a high price.
Since 2011, sanctions have devastated trade, investment, and GDP growth. Oil exports dropped from 2.5 million barrels per day in 2011 to under 400,000 during Trump’s first term. Though they rebounded to 1.5 million in 2024, levels remain far below that of pre-sanctions era.
Iran’s real GDP shrank by 13% in 2011. It has yet to recover to its 2010 GDP per capita level. Had Iran maintained its pre-2011 trend line with an average growth rate of 5.9%, 2024 GDP would be more than double current levels – roughly $828 billion versus $400 billion today.
Even after adjusting for global shocks like COVID-19 and commodity price spikes, the opportunity cost of the nuclear programme and associated sanctions is estimated at $399-414 billion.
The rial has collapsed, from IRR 14,200 per US dollar in 2011 to over IRR 818,000 in 2025. Inflation has averaged 40% annually for six years. Real wages have stagnated, fixed-income households have been hit hardest, and inequality has deepened.
Iran’s exclusion from the SWIFT banking system and refusal to comply with FATF standards have further hampered trade, including humanitarian imports. Capital formation has turned negative, and core industries have withered.
The state’s rhetoric of "resistance economy" offers little comfort to citizens facing chronic hardship.
Sanctions have also undercut Iran’s scientific and industrial base. Universities and research institutes face brain drain. Industrial firms struggle to access spare parts, software, or global partnerships. From car production to pharmaceuticals, entire sectors have regressed.
State survival vs people’s welfare
Iran’s enrichment program today serves political survival, not public welfare. It allows the supreme leader to project defiance, enriches the IRGC through sanctions arbitrage, and sustains the state’s ideological base in times of unrest.
But the cost is immense: capital flight, brain drain, and widespread emigration of Iran’s educated youth. Investments in clean energy, digital infrastructure, and global commerce could have transformed Iran’s economy. Instead, resources are wasted on a technology with minimal strategic gain and substantial economic isolation.
Iran’s future cannot rest on symbolic resistance.
The enrichment programme, as currently structured, has brought little benefit and enormous cost – economically, politically, and socially. It has deprived the country of trade, investment, global legitimacy, and, most importantly, the welfare of its people.
The fifth round of Iran–US talks ended without progress. But continued engagement suggests both sides see value in a deal. For Iran, enrichment no longer offers strategic or economic gain. It remains only as a political prop.
Several proposals are under discussion.
One envisions a Persian Gulf regional consortium to oversee enrichment in Iran. This idea lacks a concrete and substantive foundation, but it may open a path to preserve enrichment in principle without allowing full implementation. Another suggests recognising Iran’s theoretical NPT right to enrich while freezing domestic activities. A third offers financial compensation for dismantling facilities.
More creative proposals may yet be found. What matters now is avoiding war.
Iran’s leaders must choose between entrenched defiance and a future grounded in rational diplomacy. The enrichment program has cost far too much – not just in lost GDP, but in the lives and futures of ordinary Iranians.
Symbolic pride is no substitute for real prosperity. It is time to move on.
Mahdi Ghodsi is an Economist at The Vienna Institute for International Economic Studies
Behrooz Bayat is Senior Fellow at the Center for Middle East and Global Order (CMEG)
