Iran faces imminent soil bankruptcy after years of decline, official says

Hossein Shariatmadari wrote that Bahrainis seek a “return to the main and mother homeland,” going beyond Iran’s usual rejection of GCC references to Abu Musa and the Greater and Lesser Tunbs.

“This undeniable right of Iran and the people of its separated province cannot and should not be ignored,” he said.

His remarks followed a GCC communiqué issued Wednesday that reaffirmed support for Emirati claims over the islands and called for negotiations or referral to the International Court of Justice. Such statements often prompt formal Iranian protests or diplomatic summonses.

Kayhan links GCC stance to foreign alignment

Shariatmadari accused Persian Gulf states of acting under Western pressure and cited 19th-century British maps to argue Iran’s continuous sovereignty over the islands. He described Bahrain’s separation as a result of foreign intervention and said consultations with tribal leaders did not amount to a true referendum.

His remarks ventured beyond standard Iranian diplomatic messaging, which generally restricts itself to sovereignty claims dating to 1971 and rejects third-party arbitration. By reviving the Bahrain question – largely absent from formal diplomacy for decades – the column broadened the dispute at a moment when GCC statements increasingly pair the islands with Saudi-Kuwaiti positions on the offshore Arash/Durra gas field.

GCC communiqués regularly reprise both issues, while Iran emphasizes territorial “red lines” and warns neighbors against what Tehran describes as misreading its posture in the Persian Gulf.

Jabbar Kouchakinejad, a member of parliament’s budget and planning committee, said Iran has been unable to secure enough foreign exchange for key imports.

“Because of reduced oil income, we cannot provide the required foreign currency for basic goods,” he told ILNA news agency. He said allocations for essential imports fell from 18 billion dollars last year to about 11 billion dollars this year.

Kouchakinejad said much of Iran’s oil sold to China has not been converted into usable currency, while sanctions have forced Tehran to offer heavy discounts.

“Although the oil minister says sales are good, the revenue is not returning to the country,” he said, adding that this has led to import restrictions and shortages in several sectors.

Structural problems worsen fiscal gaps

Economists say the country’s chronic budget deficit, high inflation and weak productivity stem from a large, costly bureaucracy and overlapping agencies. They warn that without reform, Iran’s economy will remain vulnerable to external shocks and sanctions.

Economist Mehdi Pazouki said the unchecked expansion of the administrative system has fueled inflation and wasted public resources. “Without discipline in spending, it will be very difficult to stabilize the economy,” he said.

Analysts warn of harder year ahead

Experts say Iran’s economic outlook may worsen next year when renewed UN sanctions triggered by European powers take full effect. Economist Morteza Afghah said growth targets of eight percent are unrealistic under current conditions, noting that “even without war and sanctions, such goals would be unattainable.”

Kouchakinejad said the monthly treasury reports confirm a decline in oil income, though the exact figures remain classified. “The fall in revenue has made it difficult to forecast foreign currency inflows and fund imports,” he said.

The report said worsening economic conditions, including inflation, unemployment, and rising living costs, have contributed to the increase in debt-related arrests.

HRM is an online monitoring group that works with the exiled opposition group the National Council of Resistance of Iran. The banned Mujahideen-e-Khalq (MEK) is the largest component of the NCRI whose leaders are based in Paris.

“Many women remain in prison simply because they cannot pay financial obligations, even when the amounts are relatively small,” HRM said.

“Women often face longer pre-trial detention and limited access to legal support compared with men,” The report added. “Single mothers, widows, and women from low-income households are disproportionately affected, leaving families without primary caregivers.”

Iran's parliament is currently pursuing a draft bill to curb the criminalization of debt, but one of its provisions reduces financial benefits for brides in a move that has been criticized by women's rights advocates.

‘Family structure’

The report said the broader social consequences of debt imprisonment, as the effects go beyond just imprisonment and dealing with sentencing.

“Debt-related imprisonment is not only about paying off a financial obligation but often about destroying a family’s structure,” the report said. “Children of incarcerated women may experience disrupted schooling and increased economic insecurity, compounding the hardship faced by families.”

Financial strain is mounting in Iran as Western and international sanctions have tightened, with the currency the Rial hitting an all time low of 1.2 million compared to the dollar this week.

Costs for basic goods like medicine and food staples have risen a standards of living have sunk, in developments officials blame on sanctions aiming at regime change but critics ascribe to bad policy decisions, corruption and mismanagement.

The report urged Iranian authorities to adopt measures to reduce detention for financial debts, including a revision directive in sentencing.

“Alternative dispute resolution, community service, or installment repayment programs should be prioritized to prevent unnecessary incarceration.” The report said. “Debt-related imprisonment should not be used as a tool against women facing economic hardship.”

Many social and financial laws in the Islamic theocracy favor men.

The report said without reform, the number of women jailed for financial debts is likely to continue rising, increasing social inequalities and deepening the human costs of Iran’s economic crisis.

Iran’s Sharia-based legal framework contains numerous provisions that disadvantage women, particularly in family and inheritance law.

The prosecutor said one of those detained is an official with the Kish Free Zone Organization and the other is from the private company that organized the race. Both have been charged and placed under bail orders after formal questioning. Judicial supervision measures were also imposed, barring the state official from public employment and the private organizer from managing or holding sports events.

The sixth Kish Marathon went ahead on Friday morning with nearly 5,000 runners on the Persian Gulf resort island, despite opposition from Iran’s Athletics Federation, which had cited concerns over “legal and religious requirements.”

“The manner in which the event was conducted damaged public decency,” the prosecutor’s office said earlier in a statement carried by the IRGC-linked Tasnim news agency. It said officials had been warned beforehand “to observe the country’s laws and religious and social norms” but had failed to comply.

‘The Las Vegas Republic

The announcement followed a cascade of attacks from hardline activists and media—including Tasnim.

The race, it asserted, promoted “open, public unveiling (and) debauchery,” for which those responsible “must be punished immediately.”

A hardline activist writing under the name Aminizadeh blasted officials as “careless and dishonourable,” describing the race as a “disco marathon.”

“Is this the Islamic Republic or the Las Vegas Republic,” he quipped. “Who sponsored this stupid act?”

‘Settling political scores’

Such interventions echoed broader efforts by conservative figures to reassert control over public space and dress codes three years after the widespread 2022 protests, which has eroded enforcement of Islamic dress code in many urban areas.

Many supporters of the event pushed back, accusing hardliners of exploiting hijab sensitivities for political gain.

Journalist Amir Taher Hosseinkhan wrote on X that women had run their race at 5:30am and men at 8:30am, with strict separation and control.

“So why are you still insisting on creating a false narrative?” he asked. “How did something you claim is sacred become a tool for bargaining and settling scores?”

Organizers have so far not publicly commented on the prosecutor’s announcement.

“Society appears to me changed a lot. Very different,” Limbert said. “If you look at the government, the ruling apparatus, it’s been remarkable, it’s basically stayed the same. The same little men’s club, elite men’s club has run the country.”

“Look at the literacy rate. When we were there, it was about 50 percent. Now it’s well over… ninety five, ninety six.”

Literacy has been one of the biggest structural changes in Iranian life.

In 1976, 48.8 percent of people aged 10 to 49 were literate. By 2021, that figure had reached 97.1 percent. The literacy gap between men and women dropped from 23.4 percent to 6 percent.

Limbert served as Deputy Assistant Secretary of State for Iran and spent 14 months as a hostage after the US Embassy was seized in November 1979. Nine of those months were in solitary confinement.

“There’s a narrative out there that we were treated well, but we were not. Fourteen months I was there; nine months I was in solitary.”

Archival video online shows a striking exchange inside the embassy compound in 1979: Limbert speaking directly with Ali Khamenei who was a senior official in the new government and is now Iran’s Supreme Leader.

Limbert greets Khamenei and makes a wry remark about Iranian hospitality, saying that in Iran “even when a guest insists, he must go, he is told ‘no, no, you must stay.’” It was his polite way of saying he wanted to leave, delivered through the cultural language of taarof, the elaborate politeness that shapes everyday interactions.

'Back of beyond'

Limbert first traveled to Iran in 1962, later returned as a Peace Corps volunteer and as an instructor at Pahlavi University in Shiraz. He speaks Persian and earned all his degrees from Harvard University.

While the ruling structure of the Islamic Republic is still dominated by the same generation that took power in 1979, Iranian society itself, Limbert says, has changed in profound ways.

Limbert said the most dramatic change is visible far from Tehran, in places that once felt remote and forgotten.

“Yasuj was the back of beyond… now there’s a university there. Darab in Fars… it was a dead town. There was nobody there. Now there’s a university there.”

He praised the creative boom that has emerged under pressure.

“Culture is amazing. Look at the films that are coming out of Iran… look at the creativity.”

Recent scenes from inside Iran capture this contrast vividly. A marathon in the Persian Gulf island of Kish took place on Friday with more than 5,000 runners. Footage shows most female runners without hijab — a sight that would have been unthinkable decades ago.

Yet these images exist alongside something darker.

Authorities have executed over 1000 people thus far in 2025, the highest number of yearly executions in Iran according to Amnesty International. This includes political detainees, ethnic minorities and protesters. Human rights groups report intensified repression, mass arrests and new surveillance campaigns.

And while society has modernized, the ruling system has barely moved.

“They took power in ’79, and they’ve held it ever since. They or their followers are still around," said Limbert.

For Limbert, Iran is moving in two directions at once. “It’s going in both directions at the same time.” He does not predict collapse, but he questions endurance.

“I don’t think it can last forever. But I don’t know how long.”