Peloni: This is an important article. The Hudson Institute fellow, Mike Doran, recently made the argument that Pres. Trump prefers Regime Transformation to Regime Change, and that it was due to the integral aspect of the IRGC’s command over Iran’s entire economy. In the following essay, Jalal Tagreeb provides an important detailed look into how this stranglehold on Iran’s economy came to be and how that relates to the current attempts at regime change.
By Jalal Tagreeb
Iran’s Revolutionary Guard Corps (IRGC). Screengrab via Youtube
For decades, Western analysts have debated the best means of dismantling one of the most destabilizing regimes on the planet. The Islamic Republic of Iran has exported terrorism, funded proxy armies, pursued nuclear weapons, and brutalized its own people — all while hiding behind a veneer of ideological legitimacy. But the key to understanding both the regime’s resilience and its ultimate vulnerability lies not in theology or geopolitics alone. It lies in economics. Specifically, it lies in the vast, corrupt, and parasitic financial empire of the Islamic Revolutionary Guard Corps (IRGC) — and in how Israel’s sustained military and strategic pressure is now accelerating the conditions that could finally bring that empire crashing down.
A Revolutionary Guard Turned Business Cartel
The IRGC was established by Ayatollah Khomeini in May 1979 as the ideological vanguard of the Islamic Revolution — a parallel military force designed to crush dissent, protect clerical rule, and wage holy war abroad. What it became, over the following four decades, is something far more insidious: a diversified business empire that spans core industrial sectors including oil, transportation, banking, telecommunications, agriculture, medicine, and real estate.
The IRGC’s move into economic ventures began shortly after the Iran-Iraq War, when Supreme Leader Khamenei formalized a hierarchical structure that paved the way for privileges and economic benefits for the country’s leadership. This expansion accelerated during the 1990s, and grew rapidly during Mahmoud Ahmadinejad’s presidency, when his government granted numerous no-bid contracts to IRGC-linked companies — particularly in oil extraction and pipeline construction — effectively creating a protected monopoly for the organization.
The crown jewel of this commercial empire is Khatam al-Anbiya, an IRGC-affiliated engineering firm responsible for projects across agriculture, industry, hydrocarbons, health, real estate, mining, pharmaceuticals, roadbuilding, education, and transportation sectors. It controls Tehran’s international airport, has built major railways and dams, and receives billions of dollars in state contracts without competitive bidding. The 2025 budget law specifically authorized Khatam al-Anbiya to receive up to approximately $2 billion worth of state assets. This is not privatization — it is institutionalized looting, laundered through nationalist rhetoric.
According to a 2020 report from the Center for Strategic and International Studies, “the IRGC has become the most powerful controller of all important economic sectors across Iran.” Beyond its legitimate business interests, the IRGC is also involved in smuggling alcohol, narcotics, weapons, and tobacco, and uses cryptocurrencies and front companies to ship oil and evade international sanctions. A former Central Bank governor revealed that in just one year, IRGC-managed sanctions-circumvention operations cost Iran $50 billion — much of which ended up in the pockets of IRGC commanders and oil smuggling networks.
This is the dirty secret at the heart of the Islamic Republic: sanctions do not hurt the IRGC — they enrich it. Every dollar of economic pressure that squeezes ordinary Iranians into poverty creates another black-market opportunity for the Guards to exploit. The regime’s belligerent foreign policy is not merely ideological stubbornness. It is a business model.
The Economy as Instrument of Political Control
The IRGC’s economic dominance is not simply about personal enrichment. It is the mechanism by which the regime purchases loyalty and enforces obedience across Iranian society. Unofficial reports suggest IRGC-linked entities dominate roughly half of Iran’s informal or “shadow” economy. Over the past two decades, much of the government’s privatization program has veered off course — rather than transferring assets to the true private sector, state-owned properties have been handed over at heavily discounted rates to IRGC and Supreme Leader–affiliated institutions.
Oil revenues don’t just fund government operations — they underwrite the entire system of institutional loyalty that keeps the regime stable. IRGC companies depend on oil export profits, military salaries flow from petroleum income, and sanctions-busting operations require energy resources as tradeable commodities. The result is a symbiotic relationship between military power and economic control, in which the IRGC cannot afford to allow genuine reform, because genuine reform would mean dismantling the very monopolies on which its wealth depends.
This explains why every Iranian president from Rafsanjani to Pezeshkian has been unable to deliver meaningful change. As Iran scholar Karim Sadjadpour observed, five Iranian presidents have come and gone, but “Khamenei and the Revolutionary Guard — which he commands — have grown more powerful over the decades and dominate the country’s byzantine political institutions, as well as the judiciary, media and surveillance state.” Elections in Iran are not democratic exercises. They are theatrical performances staged in front of a system that has already decided what outcomes are permissible.
The Human Cost: A Nation Hollowed Out
The consequences of this arrangement for ordinary Iranians are catastrophic. As of January 2026, Iran is experiencing its deepest and longest economic crisis in modern history. Inflation skyrocketed to over 48.6% in October 2025. As of March 2025, estimates ranged from 22% to 50% of Iranians living below the poverty line. Close to 10 million Iranians fell into poverty between 2011 and 2020 alone, with the share living below the international poverty line rising from 20% to 28%.
The Ministry of Social Welfare announced in 2024 that 57% of Iranians were experiencing some level of malnourishment. Meat became a luxury food item. Seven million Iranians went hungry. More than 50,000 students emigrated from the country per year. By March 2025, the exchange rate surpassed 1,000,000 rials per dollar — making the Iranian rial the least valuable currency in the world.
Meanwhile, the IRGC transferred more than $1 billion to Hezbollah in Lebanon during the first ten months of 2025, according to U.S. Treasury disclosures — funding an army of militants whose salaries dwarf those of Lebanon’s own national military. The Iranian people are being starved to subsidize a regional terrorism network. This is not governance. It is occupation by another name.
When Iranians took to the streets in late 2025 and early 2026 — the largest protests since the Mahsa Amini uprising of 2022 — the regime’s response was predictable and savage. The IRGC met protesters with extreme force, with Supreme Leader Khamenei publicly acknowledging the clashes had killed “thousands of people.” The European Union, responding to international outrage, listed the IRGC as a terrorist organization. For the Iranian people, however, international condemnation without consequence has become a bitter joke.
Israel’s Strategic Logic: Targeting the Engine
This is where Israel’s role becomes not merely justified but morally essential. Israel has long understood what Western capitals have been slow to acknowledge: that the IRGC is not a peripheral actor in the Islamic Republic — it is the Islamic Republic. And its economic empire is both its greatest strength and its most exploitable weakness.
Israel’s sustained military campaign, including the devastating June 2025 strikes that killed IRGC commander-in-chief Hossein Salami along with numerous senior officers, represents a fundamentally different strategic approach to Iran than anything the West has attempted. Rather than hoping that sanctions will trickle down to weaken the regime, Israel has targeted the regime’s coercive apparatus directly — its military leadership, its nuclear infrastructure, its proxy networks.
If Israeli strikes succeed in destroying oil infrastructure, the financial foundations of institutional loyalty could erode. Without these material foundations, the cost-benefit calculations that have kept institutional elites loyal for decades could rapidly shift, potentially triggering the kind of security force defections that historically precede regime collapse. This is the strategic insight that animates Israel’s approach: the IRGC’s economic empire is not a side effect of its military power — it is the precondition for it. Destroy the empire, and the loyalty network that sustains the regime begins to fracture.
Iran’s currency lost 60% of its value after Iran and Israel fought a 12-day war in June 2025; inflation spiked; chronic energy shortages forced blackouts; and a historic drought depleted water supplies. These are not incidental harms — they are the financial foundations of the IRGC’s patronage system beginning to buckle under combined pressure.
Toward Liberation: What Regime Change Actually Requires
Critics of Israel’s approach argue that military pressure simply radicalizes Iranian nationalism and strengthens the regime’s hand. This argument deserves engagement — but it ultimately fails. It confuses the interests of the Iranian people with the interests of the regime that oppresses them. Iranians in the streets of Tehran, Isfahan, and Mashhad are not chanting in defense of the IRGC. They are chanting against it. The regime’s survival does not reflect popular will — it reflects the coercive and economic power of an organization that has taken an entire nation hostage.
Genuine regime change in Iran requires more than protest. It requires the systematic weakening of the IRGC’s ability to purchase loyalty and fund repression. Mass resignations by senior IRGC commanders and regular army officers publicly distancing themselves from regime policies are the key indicator to watch — and the conditions for such defections are created not by diplomatic engagement with a regime that has never bargained in good faith, but by sustained military, economic, and strategic pressure that makes continued loyalty materially unsustainable.
Israel is not fighting a war against the Iranian people. It is fighting a war against the organization that has enslaved them. The IRGC’s economic empire — built on corruption, coercion, and the looting of a once-great civilization — is the iron cage in which 90 million Iranians are imprisoned. Dismantling it is not aggression. It is, in the deepest sense, an act of liberation. The free world should recognize it as such, and stand firmly alongside the one country in the region that has consistently had both the clarity to understand this truth and the courage to act on it.
Jalal Tagreeb is an East Jordanian freelance researcher and translator who works in the United Kingdom and abroad, specializing in Islamic Studies and History. Formerly rooted in conservative Sunni Islam, he was once an active Muslim apologist who frequently debated secularists. Following a series of decisive intellectual defeats, he undertook a profound re-evaluation of his beliefs, ultimately culminating in his public renunciation of Islam.
He now focuses on analyzing cultural and ideological contrasts between the West and the Middle East. Through his writings and translations, he aims to foster meaningful dialogue, encourage critical engagement with Islamic tradition, and promote intellectual honesty. His writings, debates, and a selection of his previously refuted Islamic arguments can be found here: Jalal Tagreeb, Author at The Freethinker.
He can be contacted at servantjiff@gmail.com.
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