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Iran Wealth Fund Chairman Slams Politicians For ‘Cash Withdrawals’

Mardo Soghom
Mardo Soghom

Iran International

May 18, 2022, 17:56 GMT+1Updated: 17:25 GMT+1
Mehdi Ghazanfari, chairman of Iran's National Development Fund
Mehdi Ghazanfari, chairman of Iran's National Development Fund

As Iran’s economic woes continue, the manager of its sovereign wealth fund has criticized successive governments for bad planning and treating the fund as an ATM.

In a gathering of senior officials on Tuesday, Mehdi Ghazanfari, a graduate of Australia’s University of New South Wales (Sydney) lashed out at ministers and civil servants for drafting unbalanced budgets and then running to Iran’s National Development Fund (NDF) for money.

Ghazanfari, the fund’s chairman, complained that at the end of each year, the presidential administration and parliament spend at least three months drawing up and debating a new budget, “but in the end whatever they plan includes a budget deficit and they turn to NDF.”

Since its establishment in 2000 as a currency reserve to supplement the Oil Stabilization Fund, successive governments have dipped into the NDF for current spending, including the withdrawal of the equivalent of 2 billion euros in 2019 to boost defense spending. The administration of President Mahmoud Ahmadinejad (2005-13) borrowed heavily from the fund, which contained $24 billion when he was elected. The populist president withdrew $2.7 billion to pay New Year cash handouts to all Iranians in 2013.

While the fund was originally intended to net 20 percent of Iranian oil income – a target subsequently increased to 40 percent – United States ‘maximum pressure’ sanctions introduced in 2018 reduced Iran’s oil exports from over 2.5 million barrels a day (bpd) in 2017 to around 650,000 bpd in 2021. In two years of deep recession 2019-2020, the government raided the fund to finance spending, introducing a veil of secrecy around reserves.

‘Go To Mr Kazemi if you need money’

Claiming there had been a recent request from an unnamed minister for close to $1 billion, Ghazanfari asked why the government needed extra cash so early in the fiscal year, which began March 21.“If you need money for operational or developmental budgets, go to Mr [Masoud Mir] Kazemi [head of the Planning and Budget Organization],” Ghazanfari quipped. He also argued the government could borrow from banks.

Ghazanfari called for a consistent approach based on realistic targets. “When you say NDF’s share from oil revenues is 40 percent, then allow it to remain 40 percent and don’t mess with it in the middle of the year,” he said. “If there are sanctions and you cannot deposit money in the fund, then don’t deposit [in the first place].”

President Ebrahim Raisi’s government has claimed credit for higher oil exports despite US sanctions and has insisted the proceeds have reached Iran, despite US banking sanctions threatening punitive action against any third party dealing with Iran’s financial sector.

The Wall Street Journal recently estimated that Iran's oil exports, going mainly to China, had risen to 870,000 barrels a day in the first three months of 2022, up around 30 percent from an average 668,000 bpd in full-year 2021. But the falling rial – losing 20 percent of its value in the past two months – suggests there has been no great influx of foreign currency.

A money request from NDF means the government is short of cash, which puts the claims about higher oil revenues in doubt. This can also be surmised from the falling exchange rate for Iran’s currency, rial. In the past two months, the rial has fallen from 250,000 to 300,000 against the US dollar, a 20 percent decline.

It was perhaps in this context that Ghazanfari mentioned a minister asking for close to a billion dollars from NDF.

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Iran's Speaker Appears Strong In Re-Election Bid Despite Scandals

May 18, 2022, 14:33 GMT+1
•
Iran International Newsroom

One week before the annual election of parliament speaker in Iran on May 25, it is seems that the incumbent, Mohammad Bagher Ghalibaf is likely to be reelected.

Despite serious scandlas around Ghalibaf, some of the lawmakers including Jabbar Kouchaki and deputy speaker Ali Nikzad have already predicted that he is going to win. The other contestants are there only to put up a show that there is a democtratic process.

Semi-official news agency ISNA, also wrote in a commentary on May 12 that although there are three candidates for the election, Ghalibaf is 'the main candidate" for the post of Majles (parliament) Speaker.

Although quite a few lawmakers, including Iran's former nuclear chief Fereidoun Abbasi Davani have said they are willing to nominate themselves as candidates, politicians and the media generally believe there are currently three serious contestants for the election and each one of them represents one of the leading factions in the Majles.

According to Rouydad24 website, The three factions, namely the so-called neo-cons represented by Ghalibaf, the ultraconservative Paydari Party represented by its previous secretary general Morteza Agha Tehrani, and the hardliner conservative Sacrifice Makers group represented by Elias Naderan, come from the same political faction that calls itself Principlist, or revolutionary.

Ghalibaf surrounded by other conservatives and Paydari members in parliament. Undated
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Ghalibaf surrounded by other conservatives and Paydari members in parliament

The website, which called the election "a show," was adamant in its commentary on Tuesday May 17 that like the past two years, Ghalibaf is going to win the election, and that other candidates are there only to secure a good share of Majles committees in bargaining with him.

During the past two years Paydari won the lion's share of the committees. There are two dozen committees, but the most important ones are the Budget Committee, the National Security and Foreign Relations Committee and the Article 90, which takes care of complaints and disciplinary measures. Paydari owns all three of them as well as more than a dozen other committees.

Also, nearly all of the members of the Majles presidium are Paydari members. As it has been the case before, Paydari might get involved in a series of meetings with Ghalibaf to win more key positions for supporting his reelection.

The mere fact that Ghalibaf is still standing firm as a major contestant for the post regardless of a recent scandal about his family's luxury shopping in Turkey, may be an indication that he has probably been assured by Supreme Leader Ali Khamenei or his son Mojtaba. Lawmakers may receive a message in the last moment to support Ghalibaf against all odds.

During the past two days, there has been another development that reminded everyone of another scandal surrounding Ghalibaf. General Mohammad Ghaemi, the liquidation director of the IRGC-linked Yas holding, has reportedly been arrested for being implicated in a major financial corruption case also involving Ghalibaf. But this is also likely not to stop the incumbent, as rumors have it in Tehran that Ghaemi has been arrested on a complaint made by no one other than Ghalibaf.

The scandals appear to have been overshadowed by anti-government protests in many provinces triggered by rising prices. But things may change during the coming week if Paydari cannot come to terms with Ghalibaf.

Iran’s Ahmadinejad Spurns Raisi’s Policies As Failures Add Up

May 17, 2022, 14:00 GMT+1
•
Iran International Newsroom

Former President Mahmoud Ahmadinejad has been distancing himself from President Ebrahim Raisi’s policies as his economic failures become obvious and dangerous.

Ahmadinejad has been recently criticizing Raisi’s economic and foreign policies. He has particularly lashed out at Raisi’s decision to eliminate food subsidies which has brought thousands of Iranians into the streets in many cities in several provinces.

Meanwhile, media and pundits in Tehran have noted that many of Raisi’s ministers including his ministers of labor, agriculture, economy and industry, and housing as well as his Vice Presidents for planning and budget and Vice President for executive affairs were officials in Ahmadinejad’s government or members of the ultraconservative Paydari Party, representing people associated with the former president.

During the past nine months one of the recurrent criticisms of the Raisi was that he is using Ahmadinejsd’s men in his economic team that is believed to be responsible for the failure of his declared policies about the economy, housing and employment.

According to moderate news website, Rouydad24, Ahmadinejad has been more visibly active after Raisi took office last August. He has been travelling around Iranian provinces, meeting with relatively large groups of people and many Iranians take their grievances to Ahmadinejad’s doorstep at Narmak neighbourhood in eastern Tehran.

During this period Ahmadinejad has also traveled abroad paying eye-catching visits to Turkey and the United Arab Emirates where he was welcomed by groups of Iranian expats and foreign-based Persian-speaking media. He has also continued writing long letters to political and religious dignitaries all over the world. In one of his latest letters, he warned Russian President Vladimir Putin that remaining in power for too long will lead to a dictatorship which is not in his or in Russia’s interest.

Ahmadinejad’s criticism of Raisi’s policies at times looks odd as both political observers and the man in the street notice the resemblance between Ahmadinejad and Raisi’s populist policies. Both talk about social justice and serving the nation in an identical way regardless of how genuine their statements are.

Critics liken Raisi’s policy of throwing money at problems regardless of long-term economic consequences much like Ahmadinejad did during his presidency. The significant difference is that the former president had much higher oil revenues than Raisi. However, Ahmadinejad has charged that the cash subsidy he started to pay to almost all Iranians regardless of their financial footing was about 40 dollars per person per month, while now Raisi cannot afford it because Iran’s currency has fallen 30-fold in the past 15 years.

He has also critiqued the elimination of food subsidies, saying to a crowd in Bushehr southern Iran: “You cannot do whatever you wish only because you are the boss! The nation will not allow anyone to do anything against the people’s will.”

The former President also lashed out at Raisi for “appointing small men to big jobs.” Meanwhile, he has harshly criticised Raisi administration’s policy about Afghanistan and the war in Ukraine. “Who gave you the permission to support Russia’s invasion of Ukraine?” Ahmadinejad asked.

Iran’s Exports Of Hand-Woven Carpets Drop To $70 Million

May 16, 2022, 08:58 GMT+1

A member of Tehran’s Chamber of Commerce says Iran’s exports of hand-woven carpets have dropped to about $70 to $80 million per year from about $500 million before the US sanctions.

Head of Tehran's Chamber of Commerce's Exports Committee Razi Haji Aghamiri told ILNA on Sunday that unprofessional measures by the trade authorities have decreased the exports to such a low point that practically there is nothing left of this business.

He described the restrictions by Iran’s Central Bank for the revenues of carpet exports as the “coup de grâce” to the sector, but the sharp drop in exports seems to be more related to the US sanctions.

Data from the Trade Ministry show that the export of traditional Iranian hand-woven carpets in 2001, when nuclear sanctions against Iran had not yet been imposed, was more than half a billion dollars, over a quarter of which was imported by the United States, with Germany, Lebanon, and Britain as other major customers.

The exports picked up again in 2017, immediately after the implementation of Iran's 2015 nuclear deal with world powers, the Joint Comprehensive Plan of Action (JCPOA), reaching about $426 million. But the figure started to fall again after the US withdrawal from the deal in 2018 when Washington reimposed sanctions on the import of Iranian rugs. Importing Iranian carpet to the United States is forbidden even through a third country.

In August 2018, Fereshteh Dastpak, the head of Iran's National Carpet Center at the time, claimed that the value of the hand-woven carpet exports amounted to $1.2 billion annually over the past decade.

IRGC General Says Some Blame Khamenei For Iran’s Economic Woes

May 15, 2022, 18:27 GMT+1

As street protests enter their second week, Iranian politicians and military men are offering their insights about the economic crisis and rapid price hikes.

Food prices that doubled and tripled in recent days triggered the unrest that have turned into fierce anti-government protests in many parts of the country.

Most of the explanations target the previous government or President Ebrahim Raisi's lack of an economic policy. But in a different analysis to explain the crisis that has brought thousands into the streets, the deputy commander of the Revolutionary Guard (IRGC) Yadollah Javani lashed out at government's critics, saying that some people are gradually blaming Supreme Leader Ali Khamenei for the economic problems, because he does not allow negotiations with the United States.

This is the first time an official of Javani's calibre acknowledges the debate about Khamenei's responsibility for the diplomatic deadlock, which has led to the country's biggest economic problems in modern history.

However, during the past weeks Javani happened to lose a lot of his credibility after he was implicated in an alleged espionage or infiltration case involving a foreign woman who had penetrated Khamenei's inner circle and even posted two dozen articles on his official website. Therefore, his comments will be likely taken as an attempt to appease Khamenei to redeem his trust.

Better Diplomacy

Over the weekend, Hassan Khomeini, a grandson of Rouhollah Khomeini, the founder of the Islamic Republic criticized the Raisi administration for failing to tackle the diplomatic impasse that has been preventing an economic breakthrough since the 2018 US pull-out from JCPOA, the nuclear deal with Iran.

The young Khomeini, an aspiring political figure who has often been criticized for wasting trillions of rials on developing a large complex housing his grandfather's tomb, said a good team of diplomats should have been able to solve the problem with the United States or at least open a new path “within 24 hours.”

Lack of trust

Former communication minister and presidential election hopeful Mohammad Gharazi said the root-cause of the unrest is that Iranians do not trust the government. Gharazi added that President Ebrahim Raisi knows better than everyone else that Iran's economic problems have worsened since he took office in August 2021.

Gharazi argued that the Raisi administration has not been able to convince the Iranian society that he is doing the right thing to help them.

Raisi, who recently stopped an annual $15-20 billion food import subsidy, argues that he is reforming the economy to prevent corruption, and there will be no gain without pain.

Nonetheless, some of Raisi's supporters such as conservative lawmaker Reza Taghipour, a former aide of President Mahmoud Ahmadinejad keep blaming former President Hassan Rouhani for country's current problems without mentioning why the new government has not been able to fix the problems after 10 months.

Famine on the way

In another development, reformist politician Mohammad Ali Abtahi criticized state-owned media for justifying the Raisi administration's failure, saying that "It is wrong to pretend that the entire Iranian society is happy about the way the administration has manipulated the subsidy system." Abtahi said that state-owned media's approach during the past week has been provocative.

During the week, the state-owned television and Khamemnei-affiliated Kayhan newspaper have been supporting Raisi's policy and not only ignoring, but also attacking and belittling the protests.

In the meantime, conservative political analyst Mehdi Ayati said in an interview with Nameh News, close to former Intelligence Minister Mostafa Pourmohammadi that "a famine will be on its way in Iran if food rationing does not start as soon as possible."

Iran’s Reformists – ‘Reforms Are Dead, Long Live Reforms!’

May 15, 2022, 14:44 GMT+1
•
Iran International Newsroom

Same time last year, a month before the June 2021 presidential election, Iran's 'reformists' were still hopeful that one of them might win the election.

It took them only a few days to find out that that the Guardian Council, or in other words Supreme Leader Ali Khamenei, has other plans for the country's future.

The Council under Khamenei’s supervision rejected almost all reformist and even moderate-conservative candidates, all but ensuring the election of the preferred hardliner candidate, Ebrahim Raisi.

Although two of the final candidates, former Central bank Governor Abdolnasser Hemmati and former Governor General of Khorasan Province Mohsen Mehralizadeh, liked to be characterized as "reformist," few politicians, let alone voters would recognize them as such. Some reformists even thought about forming coalitions with moderate conservative figures such as dormer Majles (parliament) Speaker Ali Larijani and former lawmaker Ali Motahari.

Today, after a year, some of them still occasionally get some press coverage while some others are absolutely silent and do not wish to be remembered as former candidates.

Former foreign minister Mohammad Javad Zarif. FILE PHOTO
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Former foreign minister Mohammad Javad Zarif

The reformists' first choice for the post, former Foreign Minister Mohammad Javad Zarif never registered as a candidate. Since then, he has been seen at two Ramadan banquets at the Presidential office and Khamenei's headquarters. Currently, he teaches at the University of Tehran and his political career appears to have come to an end after he charged in a leaked tape in April 2020 that former Qods Force Commander Qasem Soleimani got his orders from Russia.

One of the most likely candidates, former Vice President Es'haq Jahangiri who lost his popularity after his brother was indicted and jailed for financial corruption, became a target of attacks by hardliners in the new government and Majles who blamed him for economic problems. He never became a candidate either.

Former deputy interior minister Mostafa Tajzadeh was extremely vocal against the government ahead of the election and welcomed by younger reformists. However, at the end, he decided that neither him nor anyone else should run for president in protest to the Guardian Council's unilateral and widespread disqualification of pro-reform candidates.

Former deputy minister Mosatfa Tajzadeh who has turned into a critic of Iran's rulers
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Former deputy minister Mosatfa Tajzadeh who has turned into a staunch critic of hardliners

Massoud Pezeshkian, a lawmaker from Tabriz and a vocal critic of former President Hassan Rouhani and Raisi, was disqualified by the Guardian Council. He currently runs Ensaf News website.

Mohammad Reza Aref who was harshly criticized for his aloofness and silence as the leader of the reform faction in the previous Majles, did not run and has kept silent after the 2021 election. Mohsen Hashemi, the chairman of Tehran City Council, appears to have quit his political career and is currently editing his father’s, former President Akbar Hashemi Rafsanjani's memoirs. Last week he complained that the Culture Ministry has censored a large part of the latest volume.

Mostafa Kavakebian, the leader of the very small reformist party Mardom Salari, continues publishing his newspaper under the same name but appears undecided between criticizing Raisi or appeasing him in the hope of receiving some favors.

Regardless of strict opposition by clerics and hardliners to women running for president, former vice presidents Shahindokht Molaverdi and Zahra Shojaee were nominated for the post but were disqualified by the Guardian Council. Molaverdi currently works as a notary public and Shojaee is in bed with cancer. Both were active in trying to expand women’s rights.

Mohammad Sadeq Kharrazi, a relative of Khamenei, a former senior diplomat and the leader of Neda Party has quit politics without any explanation.

However, part of the reform camp, mainly right of center Kargozaran Party, does not seem to be affected by disillusionment and despair. As the party's leader Hossein Marashi has said in a recent interview: "We know that there are limitations, but there is no way for us other than political struggle." Marashi is famous for his motto: "Reforms are dead, long live the reforms!"