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Iran's Government Scrambles To Contain Financial Chaos

Mardo Soghom
Mardo Soghom

Iran International

Feb 21, 2023, 13:56 GMT+0Updated: 17:39 GMT+1
A photo showing Islamic Republic's parliament in session on February 20, 2023
A photo showing Islamic Republic's parliament in session on February 20, 2023

Chaos reigned in financial and currency markets in Iran on Tuesday as the government scrambled to contain the damage from an unprecedented fall of the currency.

The rial, which fell to a low of 500,000 against the US dollar on Monday stayed around the same level as a string of measures were announced by the government on Tuesday, giving the Central Bank of Iran (CBI) “unprecedented powers” to contain the damage.

Officials announced that citizens will not be allowed to buy their annual share of foreign currency from official exchange bureaus, which previously was $2,000. They also said that the government will stop providing dollars to banks and official dealers for that purpose.

Meat and other prices shot up, as a general mood of panic emerged over rising inflation in the coming days.

Some underground activist groups that have organized popular protests since September issued a call for demonstrations on Wednesday at bazaars around the country.

The economic chaos can reinvigorate antigovernment protests, after large-scale government repression reduced street demonstrations in January. Iranian analysts in recent weeks were speaking of the “grey strata” in society, unwilling to come out and support younger protesters, but the economic chaos can be the catalyst for more Iranians to join the movement.

Iranians lining up to buy dollars in Tehran on Feb. 20, 2023
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Iranians lining up to buy dollars in Tehran on Monday

Confidential government documents obtained by Iran International Tuesday showed that the Secretary of the Supreme National Security Council, Ali Shamkhani, was warning President Ebrahim Raisi of shortages in animal feed due to lack of imports. Iran is dependent on importing millions of tons of grains and animal feed to maintain food production and supply. Any serious shortages can lead to chaos for consumers.

Mohammad Machine-Chian, a senior research scholar at the Center for Governance and Markets at the University of Pittsburgh told Iran International Tuesday that the “Supply chain of essential goods in Iran is in an extremely vulnerable and dangerous situation.” He added that the government’s foreign currency reserves are running out and it is not able to secure sufficient imports.

The government claimed that it established a new “currency exchange center” to provide dollars and other hard currencies “for legitimate needs,” leaving a trail of unanswered questions in the wake of the announcement.

Ordinary people and businesses more likely will see the move as yet another dubious government scheme, typical of the state-controlled economy.

According to official figures, well over $10 billion have been taken out of the country in the past few months. The real figure might be much higher as confidence in the economy and the government’s foreign policy seems to be at an all-time low.

The Biden administration, which was negotiating last year with Iran to resolve the dispute over Tehran’s nuclear program, not only has kept the Trump administration’s economic sanctions in place but has made attempts to strengthen their enforcement. The talks reached an impasse in September and since then Washington has repeatedly said that its focus has shifted to supporting the rights of Iranian protesters.

The mood among European powers has also shifted against the Iranian regime after it became obvious that it was supplying hundreds of kamikaze drones to Russia that are being used in Ukraine.

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Judiciary Issues Death Sentence For Iranian-German National

Feb 21, 2023, 12:56 GMT+0

Iran's judiciary has sentenced Iranian-German national Jamshid Sharmahd to death on charges of "corruption on earth".

Mizan New Agency, which is affiliated with the regime judiciary, announced Monday that Sharmahd has been sentenced to death.

Sharmahd, who is also a US resident, is accused by Tehran of heading a pro-monarchist group accused of a deadly 2008 bombing and planning other attacks in the country.

In the bombing on a mosque in Shiraz 14 people were killed and 200 more were wounded, but Sharmahd and his family vehemently deny the accusation.

"His verdict can still be appealed in the supreme court," the agency added.

Sharmahd, the director of Tondar opposition group, has been held in solitary confinement for many days and he was denied an independent attorney and fair legal procedures.

The news of Sharmahd’s kidnapping in Dubai and his transfer to Tehran by Islamic Republic agents was first released in August 2020.

Based in Los Angeles, the little-known Kingdom Assembly of Iran, or Tondar, says it seeks to restore the Iranian monarchy that was overthrown by the 1979 Islamic revolution. It runs pro-Iranian opposition radio and television stations abroad.

The death sentence for Sharmahd comes as Iranian foreign ministry on Tuesday confirmed indirect talks with the United States over prisoner exchange through intermediaries.

The Islamic Republic is holding several Western prisoners in what human rights organizations have dubbed hostage diplomacy.

Reporters Without Borders Slams Threats Against Iran International

Feb 21, 2023, 10:36 GMT+0

Reporters Without Borders (RSF) has denounced continued threats against Iranian journalists abroad urging Iran’s regime to immediately stop pressure on independent media.

Fiona O'Brien, the UK Bureau Director of the RSF said, “We condemn the ongoing threats against Iran International which have forced the channel to suspend its UK operations for safety.”

“No journalist should face such risks in connection with their work, whether in Iran, the UK, or anywhere else. We call on the Iranian authorities to immediately cease efforts to silence independent reporting, and urge the UK government to do its utmost to ensure journalists can safely do their jobs,” she added.

Iran International Television announced on Saturday that it decided to move its studio and broadcast operations to its office in Washington DC after more than three months of threats the British police reported against its journalists.

“Let’s be clear: this is not just a threat to our TV station but the British public at large,” General Manager Mahmood Enayat stated. “Day and night our journalists strive to deliver to the 85 million people of Iran and its diaspora the independent, uncensored news they deserve. We refuse to be silenced by these cowardly threats. We will continue to broadcast. We are undeterred.”

The UK government has condemned the actions of the Iranian government. UK’s Security Minister Tom Tugendhat wrote in Farsi on Twitter Monday, "Welcome to Britain. We will keep you safe."

Iran Says Its Motive In Prisoner Exchange With US Is ‘Humanitarian’

Feb 21, 2023, 10:23 GMT+0

Iran’s foreign ministry says there has been indirect negotiations with Washington over the issue of a prisoner exchange because Tehran looks at the issue from a “humanitarian viewpoint”.

Regarding the role of some countries, including Oman, the foreign ministry spokesman Nasser Kanaani said on Tuesday that “Tehran appreciates the special efforts of the Sultanate of Oman in this regard.”

NBC News reported last week that indirect negotiations were taking place over releasing US hostages in Iran possibly in exchange for $7 billion of Iran’s money frozen by South Korean banks.

Kanaani also confirmed that “the exchange of prisoners was taking place through intermediaries; but due to Washington’s false promises it did not take place.”

“Iranian citizens imprisoned in the United States have often been detained on baseless accusations of the US government, claiming they wanted to bypass sanctions,” added Kanaani.

The NBC report quoted four sources familiar with the matter as saying that Qatar and Britain are easing the talks as intermediaries.

“The negotiations have made progress, but it remains unclear if a final agreement will be reached,” one of the sources said.

This came as nuclear talks between Tehran and the world powers have been stalled for several months, as the United States and its European allies have imposed new sanctions against the clerical regime.

Iran has been arbitrarily arresting Western nationals for decades and using them as bargaining chips against their government, according to UN experts and international human rights organization.

Ex-Diplomats Say Pressures Mount On Iran As It Challenges The West

Feb 21, 2023, 10:10 GMT+0
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Iran International Newsroom

A former diplomat says Iranian opposition was invited to the Munich Security Conference but not the government, because of its support for Russia's war in Ukraine.

Ali Majedi, Iran’s former ambassador in Germany wrote in an article in Etemad newspaper in Tehran that "The fact that neither Iran, nor Russia were invited to the conference clearly shows where the pressure on Iran is coming from and what impact Iran's support of Russia in the Ukraine war has left on Tehran's foreign relations.

Russia has been using Iranian supplied Kamikaze drones to attack Ukraine since October, and the West is concerned about further Iranian involvement, including supplying missiles to augment Russia’s declining stocks.

The former ambassador said that supporting Russia in the Ukraine war was perhaps Iran's biggest mistake during the past year. He added that Iran's behavior has united Europe and the United States against Iran. Tehran has also missed the chance of reviving the nuclear agreement with world powers because of this.

Western countries are now focused on delegitimizing the Iranian government and Iran is now only counting on countries such as China, Majedi said and asked if Tehran could count on Beijing when in past the Chinese supported international sanctions against the Islamic Republic.

Majedi said Germany has always been Iran's biggest trade partner in Europe and Berlin's stances has always been more favorable toward Iran in the nuclear negotiations. The Iranian foreign ministry should now answer why Germany has adopted a tough position against Iran and has become more radical than France and the United Kingdom.

Iranian commentator Mehdi Motaharnia. FILE PHOTO
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Iranian commentator Mehdi Motaharnia

Meanwhile, international relations expert Mehdi Motaharnia told Khabar Online website that the Munich Security Conference's decision had an obvious message for Tehran which should not be ignored.

Referring to the recent meeting of Iranian opposition figures at Georgetown University in Washington, Motaharnia said that inviting them rather than Iranian government officials makes the decision even more meaningful.

Motaharnia said although the Munich Security Conference is a non-governmental international forum, it is the world's most important security conference, and its impact goes beyond governments and political activists. Entrepreneurs such as Mark Zuckerberg and Elon Musk also take part in it next to kings and presidents. Previously Foreign Ministers Javad Zarif and Hossein Amir-Abdollahian represented Iran at the conference.

"When Iran makes claims about destroying the world order, the other side will also mobilize its forces against the Islamic Republic," he added.

He said, "The rhetoric taking shape against Iran is creating a meaningful atmosphere for designating the Revolutionary Guard (IRGC) as a terrorist group in Europe which is in a way an expansion of the IRGC's designation by the US government."

At the same time, Iran's former ambassador to London Jalal Sadatian predicted in an article in Etemad that "Diplomatic pressures on Iran will increase." He wrote: "Within the current frameworks, the Western side is increasing its pressures on the Islamic Republic and channeling it toward internal developments to drag the situation to regime change."

Other pundits in Tehran have been arguing that Iran’s international isolation directly impacts its already fragile economy and also emboldens the opposition. It also creates a widespread impression within the country that the government’s foreign policy is disastrous for the country.

Sadatian added that the United States is the world's leader and when Iran rejects the United States' supremacy, this is unacceptable for the United States.

When Iran chooses to resort to a language other than dialogue and tells the world that it has drones and missiles as tools for diplomacy, pressures will naturally mount and Tehran will be cornered, Sadatian said.

Politicians Say Ignoring The People Led To Iran Protests

Feb 21, 2023, 02:57 GMT+0
•
Iran International Newsroom

A reformist figure in Iran says the government has no will to communicate with the people amid a full-fledged crisis, which increases public dissatisfaction and anger.

While Iran has been overwhelmed by street protests for more than five months, Ahmad Khorram, a cabinet minister in the late 1990s and early 2000's reformist government said in an interview with moderate news website Rouydad24 that Iranian officials are reluctant to listen to the people as they have lost their sensitivity to their expectations.

Pointing out that the use of violence is the government's first and often only response to people's demands and protests, Khorram said that violent approaches have not worked elsewhere in the world, and they will not work in Iran either.

He observed that what is happening today is extremely different from what was meant to happen after the 1979 revolution. He said the government responds with insult and violence to anyone asking why this has happened. This approach, Khorram said, has eroded people's trust in the government.

The turnout in the latest elections in Tehran was around 26 percent, Khorram observed, adding that the government's own opinion polls show that its popularity has plummeted to less than 20 percent in recent months.

Ahmad Khorram, a cabinet minister in the late 1990s and early 2000's reformist government (file photo)
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Ahmad Khorram, a cabinet minister in the late 1990s and early 2000's reformist government

Critics say that amid sanctions and economic hardship, the regime decided that loyal hardliners should take over the parliament in 2020, and then using its veto power over candidates, arranged for an ill-prepared hardliner become president in 2021.

He said that inquiries by reformists during a meeting with the country's top officials has revealed that they are aware of the crisis, but they are reluctant to address it properly and that they have no plans to tackle the existing dissent.

Earlier, former diplomat Jalal Sadatian had said that the government routinely resorts to violence instead of relying on its social capital. As a result, the unity and coherence of the Iranian society has been lost, he said.

Sadatian suggested that the "sources of emulation," or Iran's highest ranking Shiite clerics should try to hold meetings with Supreme Leader Ali Khamenei and communicate people's demands to him. The suggestion by Sadatian, a pragmatist politician, indicates that Khamenei has lost touch with realities on the ground and as it was evident in his latest meeting with officials on February 18, he is under the illusion that the regime enjoys tremendous support.

Meanwhile, Sadatian charged that the government has failed to understand why recent protests have taken place. He argued that economic and social demands have been the main driving forces behind the protests. However, inefficient management, wrong decisions, and insisting on non-democratic political processes have also played major parts in the situation that led to Iran's biggest nationwide protests in 44 years.

Former diplomat Jalal Sadatian (file photo)
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Former diplomat Jalal Sadatian

Sadatian added that embezzlement, corruption and ignoring people's dire financial situation were among other factors that led Iranians to take to the streets in protest. He added that giving key posts to incompetent officials has been one of the main reasons why this situation has occurred.

In such a situation holding a dialogue between the government and academics and experts can be helpful but the current all-conservative government in Iran ignores experts' views and therefore, cannot find a way out of the crisis.

Sadatian said that the situation is so critical that some embassies in Tehran have called on foreign nationals to leave the country because the diplomats are concerned about their safety and well-being, "but it is doubtful if I can tell you about the real reasons for that or if you can publish it if I talk about them!"