Grossi says ‘obvious gap’ remains between US and Iran on enrichment

UNICEF called on Iran to immediately free children detained during the nationwide protests, warning of the harmful impact of incarceration on minors.

“UNICEF is deeply concerned by the reports that children arrested in connection with the recent public unrest in Iran remain in detention,” Edouard Beigbeder, UNICEF regional director for the Middle East and North Africa, said in a statement.

“The adverse impact of detention and incarceration on children is well documented. Children are not 'little adults,’ they require special care. Deprivation of liberty entails life lasting consequences to the development of the child, but also for the future of the society overall," Beigbeder added.

He added that Iran’s obligations under the Convention on the Rights of the Child require it to respect, protect, and fulfil children’s rights.

A deaf man was shot dead by Iran's security forces in Tehran during the nationwide protests last month, people familiar with the matter told Iran International.

Akbar Cheraghi, 35, who had a hearing and speech impairment, was killed on the evening of January 8 near Azadi Street in the Iranian capital, the sources said.

Cheraghi did not hear warnings shouted by bystanders before the shooting due to his disability, the sources added.

Cheraghi worked as a janitor at the office of the Iran Socity Deaf of People Family
in Tehran, according to the sources.

Iran’s recent nationwide protests, which were met with a deadly crackdown unmatched in the country’s modern history, stem directly from five decades of Islamic Republic rule.

More than half the population lives near or below the $3-a-day abject poverty line. The national currency is in free fall, with hyperinflation and famine in sight. The state seeks to control every aspect of citizens’ lives. Add to this systemic corruption, international isolation, apocalyptic environmental devastation, and a catastrophic brain drain that has driven more than 5% of Iranians to live outside the country.

During a period when most developing countries achieved major gains in living standards, Iran’s GDP per capita under the Islamic Republic has remained below its pre-revolution level for nearly half a century. Once competitive among middle-income nations, Iran’s per capita income has fallen behind war-torn Iraq and now more closely resembles that of low-income neighbors such as Pakistan.

The rulers in Tehran have proven unable to address urgent and mounting economic challenges: soaring inflation, a bankrupt financial system, a shrinking capital stock, and non-viable state-owned enterprises (SOEs).

Beyond these immediate crises, Iran faces deep structural problems that will persist for decades. The population is aging and the demographic window is closing. Soon, ever-larger cohorts will reach retirement with little or no savings. The water crisis is also unlikely to improve, constraining agricultural output and heightening food security risks.

These compounding crises, especially under external pressure, could trigger the Islamic Republic’s collapse—or at least force fundamental changes in its governing structure. Regardless of what political system emerges, Iran’s institutions must be aligned with both political and economic development objectives.

We believe any strategy capable of generating a virtuous cycle of change must prioritize one core objective: building a credible, stable, and legitimate state. Without this foundation, prescriptions for “sound” macroeconomic policy or state-capacity reforms will remain technocratic exercises that fail to take hold, endure, or deliver.

At the highest level, these political transformations can be summarized as follows:

1. State: scaling back

While Iran’s formal central government budget is relatively small (about $50 billion), the state’s true economic footprint is far larger, encompassing well over half of economic activity through para-statal foundations (bonyads), state-linked banks, and SOEs. Some efficiency gains may be possible through spending cuts, including transfers to ideological or religious bodies. But the core challenge is to rationalize and properly govern this broader quasi-state sector.

This requires consolidating and privatizing SOEs, gradually strengthening tax collection, and integrating off-budget entities into a transparent and accountable fiscal framework, while addressing longer-term structural challenges.

2. Democratic accountability

While democracy is an end in itself, strengthening democratic accountability plays a vital role in providing the legitimacy needed for the state to implement painful economic reforms and address short-term dislocations. A political leader elected through a free and meaningful process can better shield technocratic reformers from political pressures and enable difficult but necessary policy decisions.

3. Rule of law

Reforming the rule of law is the slowest and most complex task. While formal legal rules can be changed rapidly, transforming institutional practices and cultural norms is far more difficult. It is unlikely that any future judicial system will immediately apply the law equally to ordinary citizens and elites. But even a “good enough” system—as seen in countries such as China—could be sufficient to support sustained economic growth.

A successful transformation of political institutions could launch a new period of sustained growth. Optimism about a post-Islamic Republic Iran rests on its human capital, natural resources, and a highly capable diaspora able to invest and reconnect the economy to global markets.

Under a stable and legitimate system, near- to medium-term gains could come from lifting sanctions, activating underused capacity—especially in energy—attracting domestic and foreign investment, improving productivity, and expanding tourism and trade.

We estimate these channels could add $100–150 billion to output over five years, raising average incomes by only $3–5 per person per day. Claims of a trillion-dollar economy, as stated by some commentators, are as unrealistic as the Islamic Republic’s long record of unfounded projections.

History offers wide variation in the outcomes of institutional reform in post-authoritarian states. In the post-communist transition, for example, Russia endured a severe contraction of more than 40% of GDP, while Poland pivoted relatively quickly toward sustained growth. A decisive factor in Poland’s success was the prospect of joining the European Union, which provided a powerful external anchor for reform.

Unfortunately, Iran’s trajectory of political and economic transformation appears more likely to resemble Russia’s experience than Poland’s.

In the MENA region, Tunisia and Iraq have undergone post-authoritarian institutional reforms in recent decades. Tunisia, initially viewed as the Arab Spring’s only democratic success, has since regressed into authoritarianism, and its per-capita GDP remains roughly at pre-revolution levels.

Iraq, following the 2003 invasion, has seen per-capita GDP rise from about $1,500 to over $6,000, largely driven by increased oil production, while inflation has generally remained stable. Yet progress in controlling corruption has been limited, with only modest improvements in corruption perceptions.

A post-Islamic Republic government may initially enjoy high legitimacy, but that window will be brief. It must deliver tangible results quickly while managing overlapping crises and unavoidable distributional conflicts over who gains, who loses, and who must wait. Economic recovery and political stability will be tightly linked—and failure in one will undermine the other.

Experience from other transitions is sobering. Beyond early gains, post-authoritarian growth is often slow, fragile, and reversible. Stagnant living standards can create fertile ground for populist politicians who promise shortcuts.

Iran therefore needs a development strategy that integrates political and economic reform. Without it, the country risks remaining trapped in its current low equilibrium.

European Parliament's president welcomed the European Union’s official designation of the Islamic Revolutionary Guard Corps as a terrorist organization, saying the move denies safe haven to those responsible for crimes against Iranian protesters.

“That means no safe haven for those responsible for heinous crimes against Iranian protesters. It means their funds in Europe will be frozen. And it prohibits Europeans from making any funds available to them,” Roberta Metsola wrote on X.

“It is the right step and the right signal. It is not business as usual,” she added.

Belgium’s defense minister defended his participation in the Global Day of Action rally in Munich held in support of nationwide protests in Iran, after Iran summoned the Belgian ambassador in Tehran.

“The fact that our ambassador in Tehran was summoned is not the first time. It is the tried-and-tested tactic of a regime that lives on intimidation, blackmail, and hostage diplomacy,” Defense Minister Theo Francken said in a post on X.

“I spoke in Munich before 250,000 Persians in support of a peaceful and courageous people who have had to live for so many years under the theocratic yoke of the ayatollahs and mullahs,” he added, referring to the rally held following a call by exiled prince Reza Pahlavi.