Low Oil Revenues Keep Iran's Finances In Shambles

Ali Fatemi, Vice President of Iranian Pharmacists Association told semi-official ISNA news agency Saturday that there is shortage of neuroleptics, antidepressants, and medicines for patients with special diseases.

According to him, the government still imports IV fluid from abroad and even cold syrups are on the list of imported medications.

Meanwhile, Hossein-Ali Shahriari, Head of the Health Commission of Iranian Parliament said Wednesday that if subsidies are not paid to pharmaceutical companies, "the country will face a 40-50% price rise for medicines.”

The government struggles with a shortage of foreign currencies while it claims its oil exports to China have increased despite US sanctions.

Despite the warnings, Minister of Health Bahram Einollahi claims that “most medicines are available, and there will be no problem regarding the supply of pharmaceuticals this year.”

In the previous Iranian year, the medicine crisis intensified as people suffered from multifold price increases while many items were not available at all, pushing people to the black market and smuggled medicines.

The Islamic Republic has been claiming that United States sanctions prevent procurement of medicines, while Washington insists that humanitarian aid is exempt from sanctions and in fact, food, health and humanitarian products are not sanctioned.

Iran has been importing more than $1.5 billion of medicines a year. The country imported around 100 million euros of medicines a month just from Europe in 2022 and also large quantities from China and India.

Representative Tenney (Rep-NY) released the reportaccompanied by a bi-partisan resolution on Thursday, detailing the IRGC’s “terrorist activities around the world” and urging Washington’s partners and allies to join the United States in labeling the body as a terrorist organization.

Several groups, including the Jewish Institute for National Security of America, United Against Nuclear Iran, and Foundation for Defense of Democracies, contributed to the 20-page report.

Former US officials, namely former Secretary of State Mike Pompeo, former Deputy National Security Advisor Victoria Coates and former Special Representative for Iran Elliott Abrams, also shared their views and experiences about the IRGC in the report.

“Combatting the IRGC is one of the most urgent national security agenda items today,” said Congresswoman Tenney. “Congress is united in opposing the IRGC’s terror campaign. This designation will increase pressure and send a clear message to the Islamic Republic that its terror campaigns must stop,” she noted.

Tenney’s bipartisan resolution specifically urges the European Union to expeditiously designate the IRGC as a terrorist organization under the European Union’s Common Position 931.

The former US envoy on Iran, Abrams, said in the report: “The IRGC is a global threat that requires a global response. If the IRGC can run free in Europe and Asia it can threaten Americans and our allies, move more money and weapons, and build its strength. We need to press every friendly nation to close the gaps and loopholes that allow the IRGC to survive and thrive as a danger to all of us—and as the main oppressor of the Iranian people.”

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Pompeo, a vocal critic of Iran, said: “Iran’s Islamic Revolutionary Guard Corps is a militant terrorist organization that answers only to Supreme Leader Khamenei, who uses the IRGC to spread terror and mayhem in the name of his theocratic regime."

The report breaks down the threats into domestic, as it crushes voices of dissent in the dictatorship, and regional and global threats.

The comprehensive report lists Middle East states where the militia is carrying out its operations, funding other affiliated leaders and groups in internal struggles or civil wars.

“The IRGC funds belligerents that support the Iranian regime and promote similar schools of extremist religious thought,” the report stated, enumerating the group’s activities in Iraq, Syria, Yemen, and Lebanon, as well as Gaza, Judea, and Samaria – which encompasses the entire West Bank.

By attacking dissidents directly or working through proxies to fuel terrorism, the threats go far beyond the Middle East, acknowledged the authors who went on to list some of the terrorist acts by the IRGC, including the attack on the Asociación Mutual Israelita Argentina (AMIA) Jewish Community Center in Buenos Aires in July 1994, assassinations at Mykonos Restaurant in Germany in September 1992, and plotting to assassinate former National Security Advisor John Bolton in August 2022.

The US lawmaker’s report also points to the Islamic Republic’s supply of weapons for the Russian invasion of Ukraine as another global threat posed by the IRGC. “Russia and Iran announced a $1 billion deal to build a factory in Russia to produce up to 6,000 Iranian-designed drones to use against Ukraine in Russia’s war of aggression,” the report claimed.

The international community must unite against the threat, wrote Michael Makovsky, the CEO of the Jewish Institute for National Security of America (JINSA).

“Today, the IRGC is the most dangerous terrorist group on the planet, with the history, capability, and intention to conduct attacks across six continents,” he said.

Since Wednesday, six provinces of East Azarbaijan, West Azarbaijan, Ilam, Kordestan, Kermanshah and Lorestan have been in need of rescue services due to heavy rains.

Morteza Moradipour from the Red Crescent said 861 people in 11 cities and 21 villages have received rescue services so far. A further 385 people provided with emergency accommodation and 24 transferred to safe houses.

Shahin Fat’hi, CEO of the Red Crescent Society of Tehran warned about the possibility of flooding in some areas of the province saying that all rescue teams and operational centers in Tehran are on alert.

The massive flood in Iran took the lives of 62 people last year and dozens of others went missing. Indian sub-continent summer monsoons usually bring rain showers to Iran’s arid plateau, but every few decades the impact becomes more intense and causes flooding.

Partly due to the arid nature of the land and partly because of neglect in urban planning, even a modestly strong storm leads to deadly floods in Iran. Many dry riverbeds are choked off with construction or debris dumped by residents, leading to sudden flash floods in places no one expected.

Travelling to other cities, historic sites and seaside resorts has been very popular Nowruz activity for Iranians since the advent of modern transportation in mid-20th century.

While four- and five-star hotels remained busy during the holiday season, two- and three-star properties were vastly under their usual seasonal average.

The chairman of the Iranian Air Travel and Tourism Offices, Hormatollah Rafiei, admitted the trend reflects the economic woes of the country as it battles through some of its worst financial crises of recent history with rising costs of living and declining incomes.

"A large part of four and five-star hotels, which are more expensive, were fully booked, while two and three-star hotels, which are cheaper, remained empty,” he said this week, suggesting little impact of the crisis on the top echelons of the country's rich.

It suggests a trend of those in the middle-income brackets either not traveling or opting for more affordable options such as schools, pilgrimage centers, and municipal camps, he added.

Echoing the trend, Iran's hoteliers’ association announced a 70% drop in occupancy levels during the holidays.

While annual inflation hovers around 50 percent, prices for necessities such as food have risen much faster. Official figures published by Statistical Center of Iran show food prices rising by 70-100 percent in the past year.

As the national currency has halved in value since mid-2022, monthly salaries for ordinary people have dropped to less than $150.

The Islamic Republic’s Ministry of Industry, Mine and Trade announced early in March a scheme allowing people to deposit money to book the purchase of an imported car, but the list of cars and their models, the available number of cars, and even their final prices were not provided at the time. 

The government promised people refunds if they opted out of buying the cars or if the number of available cars were fewer than the demand but after more than a month of waiting, people are demanding refunds, but the CBI is failing to uphold its side of the deal.

According to a report by Faraz Daily on Wednesday, the total amount of frozen money is 1.5 quadrillion rials ($3.12 billion), but the article only talks about 96 trillion rials of the prospective buyers’ money.

The scheme required those applying to opening an account containing at least five billion rials ($10,000).

The scheme involved several vague conditions such as not owning a car and as things fail to progress, many expect that like other government schemes, it was little more than a scam. In previous years, such schemes have ended with several well-connected people ending up with dozens or even hundreds of cars.

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Amid public criticism and frustration over the lack of transparency about the process, the registration window closed after about a week, with over 120,000 people signing up for the plan. Finally, the names of 34,000 people were drawn, which means out of about 600 trillion rials (about $1.2 billion) of the entrants’ frozen money, only a small fraction of around 170 trillion rials ($340 million) was spent on the imported cars.

This plan was not the only scheme that the regime devised to collect people’s personal investments in the last days of the previous Iranian year – which ended on March 20. Over a week after the plan for the imported cars, the ministry announced a similar one for the pre-sale of domestically manufactured cars.

The number of cars was announced as about 500,000 and applicants were asked to block 1,000 billion rials ($2,000) to be considered for the draw. The final number of entries has not been announced but by March 19, more than 360,000 people had already registered, according to the ministry’s spokesman Omid Ghalibaf. During the past two weeks, a large number of people have been complaining on social media that despite their cancellation, the banks would not allow them to withdraw their money.

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Deputy industry minister Mehdi Niazi says that the issue is communicated with the relevant banks and the regulatory body of the CBI. “Unfortunately, despite the correspondence and emphasis on the necessity of respecting people’s rights, banks refuse to release the blocked money,” he said, adding that banks blame a lack of action by the CBI to justify their move.

The prices of the cars have officially increased by 30 percent since the registration by the applicants, meaning that the participants are in for a huge loss, in an already dire economic time in Iran. A question that is circulating on social media is who will pocket the interest for the money blocked in the banks.

The Islamic Republic has a notoriously chaotic car market mired with monopolies – for manufacturing vehicles as well imports and exports – and affordability issues. Since the United States introduced ‘maximum pressure’ sanctions in 2018, threatening third parties dealing with the Iranian financial sector, Iran has struggled with imports, while European carmakers in joint projects have withdrawn. Iranian automakers are also quasi-governmental companies, benefitting from favorable borrowing and lack of competition. Some media in Iran have speculated that this vested interest might have a role in blocking approval for imports.

Earlier in April, Iranian Traffic Police said that more than 85,000 car accidents occurred during the Nowruz holidays, with about 900 people killed, one third of those, children. Between 2008 and 2018, 280,000 people died in road accidents, although there are no estimates of how many of these deaths were directly related to mechanical problems with domestic cars.