Since the Israel military attack upon Iran in June the regime in the Islamic Republic is reported to have significantly increased missile production with a view to generating enough capability to overwhelm Israeli missile defences.

Inside Iranian ruling circles the threat of renewed conflict is widely considered high, with some officials and experts suggesting that another war is “only a matter of time.”

Such thinking is fuelled not only by the desire of the regime to increase its defence capability, but also by reports from reliable Israeli sources that Israel aims to topple the existing regime in Tehran by the end of the term of US President Donald Trump in 2029.Israeli security sources indicate that Israel is preparing to respond “much more aggressively” and for hostilities to last longer than the June conflict.

For the religious zealots in the Israeli government Iran is viewed as an existential threat and, in spite of the degrading of the network of Iran’s proxies in the Middle East — notably Hamas and Lebanese Hezbollah — the ultimate goal remains the elimination of the regime in Iran itself. Iran’s continued enrichment of uranium and increase in missile production are seen as sufficient justification for such an approach.

The current situation is exacerbated by the diplomatic impasse which has existed since the June attacks with efforts to resume nuclear talks between the US and Iran floundering, removing a key channel for de-escalation.

The threat of war, launched by Israel with the backing of the United States, is clearly the most urgent and pressing issue facing the Iranian people. Wider escalation across the Middle East, which could follow, would be disastrous not only for the people of Iran but would bring closer the prospect of worldwide conflict, given the geopolitical significance of Iran for both Russia and China.

As well as the threat of external intervention the Iranian people are also having to struggle with the impact of international sanctions, endemic corruption within the state and widespread economic mismanagement. The recent collapse of Bank Ayendeh is a case in point.

Formed in 2013 following the merger of several debt-ridden credit institutions, Bank Ayandeh rose to fame by pioneering digital services and backing the construction of Iran Mall, the world’s largest shopping mall in terms of surface.

Far from being an achievement, this mega-project accelerated Bank Ayandeh’s fall. Both Bank Ayandeh and Iran Mall are tied to one of Iran’s wealthiest businessmen, Ali Ansari, who used the bank to loan himself the equivalent of $10 billion to finance Iran Mall’s construction throughout the 2010s. Ansari defaulted on the loan, yet retained indirect control of the mall through Bank Ayandeh, in which he remained a major shareholder.

The connections Ansari has with the Iranian regime have protected him from prosecution so far and have highlighted the extent to which state corruption extends into the financial sector. Failing private banks have been merged with public banks, leaving the Iranian people to foot the bill for their failings while the perpetrators are effectively given political immunity.

Instability in the banking and financial sector clearly has consequences at a macro-economic level but also impacts upon the lives of Iranian citizens who cannot be certain that any savings or other assets lodged with the banks have any secure backing.

In addition to the critical situation Iran faces in relation to the financial sector water, food and electricity supply are increasingly becoming major areas of concern.
Iran is currently grappling with a severe and multifaceted water crisis, threatening its economy, social stability, and national security. The crisis affects all sectors, from drinking water for its 88 million citizens to the needs of its agriculture and industry.

Even Iranian President Masoud Pezeshkian has been forced to comment on the crisis, describing it as an existential threat that is far more serious than what is being publicly acknowledged.

The roots of Iran’s water crisis are explained by both environmental and political factors. Climate change is a significant driver, with Iran experiencing a dry and hot climate and a decrease in annual rainfall.

Over the past 50 years, the country’s average temperature has risen by 2 degrees Celsius, and rainfall decreased by 20 per cent, leading to a dramatic reduction in groundwater and surface water supplies.

Decades of inefficient resource management and misguided policies have exacerbated the problem. A major contributor is the nation’s reliance on a water-intensive agricultural model.

For years, the government heavily subsidised water and energy for farmers, encouraging the cultivation of thirsty crops like wheat, cotton, and rice in arid regions.

This has led to the construction of numerous dams and a massive expansion of irrigation systems. This initially boosted agricultural output but has depleted rivers and groundwater reserves.

Iran’s infrastructure is outdated and in desperate need of repair. Decaying pipes and irrigation channels result in immense water wastage—estimates suggest as much as 30 per cent of treated water is lost before it reaches homes and farms. Sanctions have limited Iran’s access to modern water technology, funding and expertise, making it difficult to implement large-scale, efficient water management projects.

Although Iran has vast natural gas reserves, sanctions and a lack of investment in the energy infrastructure has hampered development.

In winter, prioritising residential heating leads to fuel shortages for power plants, forcing them to use less efficient and more polluting fuels. In summer, the demand-supply imbalance becomes critical.

The failure to invest in energy infrastructure and plan for a growing population means that the country’s energy production has not kept pace with rapidly increasing consumption, leading to a chronic imbalance between supply and demand.

Sanctions have restricted Iran’s access to the necessary technology, equipment, and foreign investment needed to modernise its power plants and expand its energy infrastructure.

Residents in major cities including the capital, Tehran, face daily power cuts lasting several hours, often without prior notice. These outages disrupt daily routines, damage electrical appliances, and pose a health risk during the heatwave. The crisis is compounded by concurrent water shortages.

The response of Iranian workers to the collapsing political and economic environment they face has been to increase their demand for recognition of independent trade unions, fair pay and employment rights.  

Strike action in the oil industry, the transport sector, the public sector and regular weekly protests by pensioners has demonstrated the extent of internal resistance to the policies of the regime.

The regime continues to respond with the arrest, imprisonment and torture of trade union, cultural and academic activists underlining its inability to fulfil the needs of its people and resort only to force to maintain its position.

The Iranian regime is rapidly heading towards an existential crisis. The combination of factors fuelling the protest movement will combine to accelerate its replacement. That must mean a government not based upon the diktats of foreign intervention but a truly national democratic government serving all 31 provinces of Iran based upon the will of its people.

Steve Bishop is a member of the executive of the Committee for the Defence of Iranian People’s Rights (Codir).  He is a regular contributor to the Liberation Journal and the Morning Star.