Middle East and North Africa

Iran has stood up to two of the world’s most powerful militaries, held its position on the nuclear issue, and continued to back its Lebanese proxy. But if that represents a victory, it’s a Pyrrhic one when considered from an economic perspective.

Iran has faced staggering losses to its military infrastructure and economy. Inflation has skyrocketed, the Iranian rial has plummeted, unemployment is high, and a U.S. blockade threatens trade in and out of the country.

Iran has stood up to two of the world’s most powerful militaries, held its position on the nuclear issue, and continued to back its Lebanese proxy. But if that represents a victory, it’s a Pyrrhic one when considered from an economic perspective.

Iran has faced staggering losses to its military infrastructure and economy. Inflation has skyrocketed, the Iranian rial has plummeted, unemployment is high, and a U.S. blockade threatens trade in and out of the country.

“The enemy has realized that it cannot force the Iranian nation into submission through military strikes,” Iranian President Masoud Pezeshkian said recently. “The economy and people’s livelihoods are the most important front in confronting the enemy.” What sounds like a boast could be taken as a warning. The United States and Israel have failed to force Iran to capitulate militarily. But it remains an open question how Iran will manage its debilitating economic losses.

Its adversaries clearly hope that economic pressure will still force the Iranian government to make substantial concessions in negotiations—or even lead to an uprising that topples the regime. It’s possible, however, that the continuation of war will instead push Iranians’ economic woes to the background, strengthening hard-liners amid a weakened economy.

Iran has suffered hundreds of billions of dollars in losses since the start of the war even though the scale of the damage is disputed. In April, Iran’s government put the losses at $270 billion, while the Washington-based Foundation for Defense of Democracies estimated $144 billion—with a range stretching from $50 billion to $300 billion. Iranian Deputy Labor Minister Gholamhossein Mohammadi said in April that more than a million jobs were lost as a result of the war, while an Iranian economist upped that figure to 10 million to 12 million jobs at risk, or roughly half of Iran’s workforce. Whatever the exact loss, the numbers........

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