Iran’s Raisi Assembles Unwieldy, Non-Expert Economic Team

General Gholamreza Soleimani, the commander of the Basij, a paramilitary wing of the Islamic Revolution Guard Corps (IRGC) said Sunday that his organization will construct 100,000 residential units. President Ebrahim Raisi (Raeesi) has promised to build one million units a year during his four-year term, a huge project that would need billions of dollars a year, although the government has not presented a budget or a clear plan.

Soleimani did not mention how much the Basij would charge the government for the project. The IRGC is the largest economic force in the country, having dozens of companies in all sectors. Its business involvement has been a controversial issue among Iranians.

Iran’s government faces a deficit equal to 35-50 percent of its overall budget, as US sanctions have cut off most of its oil export revenues. It also has to cope with a falling currency and near 50 percent annual inflation.

A previous housing project during the presidency of Mahmoud Ahmadinejad was never completed although it was carried out during high oil prices and up to $100 annual oil exports.

At the same time, parliament’s research center has demanded that before signing any agreement with China, to clarify Beijing’s position regarding Western sanctions.

Iran has been promoting close relations with China as a counterweight to the United States, amid crippling sanctions imposed by Washington since 2018. Tehran has reached agreement over a 25-year strategic pact with Beijing, saying that China is ready to invest hundreds of billion of dollars in Iran.

But Massoud Daneshmand, member of the association of transportation companies told Iranian Labour News Agency (ILNA) that because of US sanctions against Iranian ports not even Chinese vessels do not use the facilities, unloading their cargo in Dubai from where the goods are transported by Iranian ships.

Hours after Daneshmand’s remarks, Mahmoud Abbaszadeh Meshkini, spokesman of parliament’s national security committee told Entekhab website that this is “not a new issue”. He added, “We have our own ways to circumvent the sanctions.”

It is not clear why Iranian officials had not complained before about the Chinese policy of complying with US sanctions and are raising the issue now.

China has generally respected sanctions against Iran, except reports of limited clandestine and indirect oil purchases which go unreported by its customs office.

Earlier in the week, Mohammad Reza Khiabani, the head of Iran’s commercial fleet had said that Iranian vessels have been banned from Chinese ports since last year. Another official has said that China admits Iranian vessels only in its small ports and demands huge fees.

The news about China’s enforcement of US sanctions on Iranian shipping might be embarrassing for hardline supporters of Supreme Leader Ali Khamenei who have been trumpeting Iran’s “Looking East” policy. Khamenei promulgated the policy in 2018, saying that Iran should adopt an Eastern orientation of relying on China and Russia for business and commerce in the face of US sanctions.

Washington has been reportedly leaning on Beijing in recent months to curtail its dealings with Tehran, to pressure it to reach agreement in nuclear talks that started in April. Iran stopped the talks in June and so far, has refused to return to the negotiating table, while enriching more uranium.

In another development, India in September seized three tons of heroin worth $2.72 billion in September and its largest port operator later announced that it would not handle any cargo originating in Iran, Pakistan or Afghanistan.

An Iranian news website reported in 2018 that Dubai's main port handles five times more cargo than all of Iran 20 ports.

In a meeting of the government economic coordination committee, Raisi also appointed his first vice president Mohammad Mokhber to head efforts in dealing with US sanctions, which have crippled Iran’s economy since 2018.

Facing unsurmountable difficulties in protecting the value of Iran’s currency the hardliner president also ordered the Central Bank of Iran (CBI) and other agencies to confront those who “manufacture negative sentiment” against the rial.

The main reason behind a ninefold fall in the value of the rial in four years, is lack of revenues from oil exports, sanctioned by the Trump administration since 2018.

Raisi, who assumed office in August promising a new era of more effective leadership, has so far issued decrees asking his ministers to achieve goals that the previous government was not able to accomplish. Controlling the value of the national currency or skyrocketing inflation are two issues that Raisi and others address in their statements daily, without a viable plan emerging.

Tehran has been resisting efforts to revive the 2015 nuclear agreement that would lift sanctions and provide a lifeline to its economy.

Lawmakers speaking to media after Sunday's session said Hossein Amir-Abdollahian reiterated that Iran needs to see "serious steps" by Washington before it resumes talks suspended since June.

Alireza Salimi, a leading lawmaker quoted Amir-Abdollahian as saying that Iran's policy is "action for action". Earlier this month, the foreign minister had alluded to demands that Washington should unfreeze some of Iran's blocked funds before Tehran engages in contacts with the US.

Speaking to Tasnim news agency on Sunday, Shahriar Heydari, a member of the parliament's National Security and Foreign Policy Committee, said the foreign minister also thanked Parliament for ratifying a nuclear bill in December aimed at toughening Iran's bargaining position and said this will give the other parties a clear message and enhance the power of Iran’s negotiators.

The parliament passed an act entitled "Strategic Action Plan to Counter Sanctions and Protect Rights of the People Act" in December that obliged the government to step up Iran’s nuclear program further beyond the limits set by the 2015 nuclear agreement with world powers and to reduce Iran’s cooperation with the United Nations nuclear watchdog, the International Atomic Energy Agency (IAEA).

“By the Iranian foreign minister’s own admission, the 'Strategic Action Plan' has drawn the attention of influential countries,” another lawmaker, Behruz Mohebbi, tweeted after the meeting. He added that all parties to the agreement have received "a clear and serious message" and that the government" will have a "strong tool" in its hands in the upcoming talks.

Europeans have recently raised pressure on Tehran to resume the talks. On June 20, two days after the election of Ebrahim Raisi (Raeesi) to presidency, Iran suspended the talks that began in Vienna in April and has delayed its return despite repeated promises of resuming the negotiations “soon”.

Alluding to Iran's accelerating enrichment of uranium to higher fissile purity, a possible pathway to a nuclear bomb, diplomats from Britain, Germany and France, known as the E3, said in a note on Wednesday that the situation with Iran’s nuclear activities has been worsening since negotiations stalled in June.

During a visit by Enrique Mora, European Union’s lead negotiator on Iran’s nuclear issue Thursday, Iran agreed to meet with E3 representatives in Brussels in the coming weeks. According to lawmakers, in Sunday's closed session Amir-Abdollahian said talks with E3, Russia and China, the five remaining parties to the JCPOA, will begin in Brussels on Thursday [21 October]. This in effect would be circumventing the United States if no US representative travels to Brussels to be on the sidelines of the talks, as was the case in Vienna.

After the parliament's meeting with Amir-Abdollahian Sunday, lawmaker Alireza Salimi also quoted Amir-Abdollahian as saying that the Vienna talks must begin "from the point where Trump withdrew from the JCPOA". Former US President Donald Trump withdrew from the deal in 2018 and imposed tough sanctions on Iran.

According to lawmakers Amir-Abdollahian also tried to assure parliament that Iran will not be pressured by the economic hardship prevailing in the country and will seek alternatives to help people in their daily lives. This would be no easy proposition as US sanctions have deprived Tehran of tens of billions of dollars in oil export revenues.

A report by the Plan and Budget Organization prepared in August, before Hassan Rouhani handed the administration to Ebrahim Raisi, was published Saturday that paints a very grim picture of the Iranian economy if talks fail and US sanctions are not lifted.

According to the report, if sanctions continue, in 2024 the government will face bankruptcy and the national currency will lose value tenfold. The dollar may rise to as high as 2,840,000 rials in 2027. Currently the dollar is trading at 270,000 rials.

He said signs show that these countries might be "able to break free from the strangling grip of the Iranian Revolutionary Guards."

Bennett was addressing lawmakers during a weekly cabinet meeting following last week's gun battles on the streets of Beirut which killed seven people and as Iraq's Shiite militias, that often serve as a proxy for neighboring Iran, took a beating in the national election.

Israel sees "developments and trends emerging from below, of forces who simply had enough with Iranian control and influence," said Bennett.

He added that every place that Iranians enter goes into "a whirlwind of violence, poverty, instability and failure."

The confrontation in Beirut erupted when Iran-backed Hezbollah and its allu the Amla movement called for protests against a judge investigating last year’s massive port explosion. The incident raised fears of the country being drawn into further violence.

Underlying the violence are Lebanon's entrenched sectarian divides and Hezbollah’s growing influence in the past decade in the corrupt political system.

Hezbollah however has decided not to escalate the tension and said it would not be pulled into more violence.

Reporting by AP