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Iranian Politicians Fight Over Economic Data Amid Inflation And Poverty

Iran International Newsroom
Aug 28, 2023, 16:16 GMT+1Updated: 17:44 GMT+1
An Iranian man looking at the prices of case-ready meat in a department store
An Iranian man looking at the prices of case-ready meat in a department store

Despite pervasive poverty in society, the Iranian government boasts about its performance but based on apparently fabricated data, a former official says. 

To justify its inept handling of the economic situation, manifested in devaluation of the national currency and runaway inflation, the administration of President Ebrahim Raisi is falsifying statistics pertaining to the government of Hassan Rouhani to pretend there has been growth under his stewardship. 

The sheer volume of inaccurate information has prompted Mohammad Bagher Nobakht, a vice president under Rouhani and the former head of the Planning and Budget Organization, to write an open letter to the incumbent, providing what he described as the correct data. 

He pointed out that the current administration claims the average annual inflation rate was about 60 percent in July 2021 to justify the current figure of about 47 percent, but the real figure reported by the Statistical Center of Iran at the time was 45 percent. 

Iran’s point-to-point inflation rate was about 64 percent in March, a figure only recorded twice since World War II. Then the government changed the “base year” from the Persian year 1395 to 1400, which ended on March 20, 2022. The new base year -- used for comparison in the measure of a business activity or economic or financial index – resulted in new figures at about 45 to 50 percent. 

Mohammad Bagher Nobakht, a vice president under Hassan Rouhani and the former head of Plan and Budget Organization, (left) and President Ebrahim Raisi  (undated)
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Mohammad Bagher Nobakht, a vice president under Hassan Rouhani and the former head of Plan and Budget Organization, (left) and President Ebrahim Raisi

Nobakht added that the economic growth rate of the country was also about three to four percent in the last year of Rouhani’s term and not the 0.4 percent that the current government claims. He also provided official reports by the Central Bank of Iran and the Statistical Center to back up the figures he cited. It should be noted that the numbers by the two government organizations are different from each other and also different from that of the World Bank. Moreover, the current administration puts the average economic growth rate of its first two years at 4.8 percent, but the World Bank says the growth rate in 2022 was 2.7 percent. 

“It is not possible to create an acceptable performance record for governments through comparing selective and unscientific economic indicators,” Nobakht noted, highlighting that the people will judge the success of the current government based on its announced commitments, such as the annual creation of one million housing units, one million jobs, reducing the inflation rate to less than 10 percent, and efforts to lift US sanctions. 

Reacting to the letter, the official news agency of the government, IRNA, published two articles on Monday and Tuesday claiming that when the current administration took office, it inherited a huge burden of unsettled debts from previous administrations. However, according to a report in July, the current administration has been aggressively borrowing from quasi-public banks to fill its budgetary gap and keep its unprofitable companies afloat. 

IRNA claimed that the remarks by Nobakht are in line with former officials’ attempts to justify their performance so that they can have a chance in the upcoming parliamentary elections. 

Against the backdrop of political rivalries that are intensifying ahead of the elections, Iranian people are the ones who bear the brunt of the country’s inflation and currency devaluation no matter which officials hold office. The first years of Rouhani’s term coincided with the 2015 nuclear deal with world powers that led to removal of most sanctions and boosted the economy. But after the US withdrawal from the JCPOA and reimposition of sanctions, the country’s economy was on a nosedive. 

The Islamic Republic has been struggling with high inflation since at least 2019, but the raging inflation in the past Iranian year which ended on March 20, was seriously different from previous years. The inflation rate factors in numerous commodities and services but the one most important for Iranians is increasing food prices, with some categories doubling or tripling in the past 12 months. Official figures show there was a sharp increase in food prices and most items witnessed a more-than 50 price inflation. The devaluation of Iran’s rial from 260,000 per US dollar to about 500,000 this year signals even higher economic woes for the people. 

According to a report in Aftab News website, affiliated with reformists, in the past two years, the overall inflation for essential household needs was over 250% while the minimum wage has only increased 27%, quipping that the deputy labor minister calls this “an achievement” of the Raisi administration. 

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Iranian Delegation Addresses Water Crisis During Kabul Visit

Aug 28, 2023, 13:23 GMT+1

An Iranian parliamentary delegation has visited Kabul to address the water crisis in Sistan and Baluchestan stemming from the Taliban's Helmand River flow obstruction.

During their visit to Afghanistan, the delegation met with the Taliban's Foreign Minister, to address the problem of lack of proper water sharing from the river as well as additional security issues. The delegation said that Iran is willing to share its "various experiences" with the Taliban.

According to the Taliban's Ministry of Foreign Affairs, the seven-member delegation, led by Javad Karimi-Qoddousi, met with Amir Khan Muttaqi, the Acting Foreign Minister of the Afghan Interim Administration.

Hafiz Zia Ahmad, the spokesperson for Afghanistan's Ministry of Foreign Affairs, stated that in the meeting, both sides engaged in detailed discussions on topics including "security, combating narcotics, preventing smuggling, border protection, and trade."

Iran says that the Taliban have restricted water flow from the Helmand River to Iran's parched eastern regions, but this accusation is denied by the Taliban.

A particular point of contention between the Iranian officials and the Taliban surround the crossing of hundreds of thousands of Afghan refugees across the borders, and the increase in cultivation and transit of narcotics.

These differences led to clashes between Iranian border forces and the Taliban in a border outpost area in the Zabol border region in late May, resulting in casualties among Iranian border guards. However, Iran's Foreign Minister stated that the actions of the Taliban forces in this conflict were "unjustified."

Some members of the Iranian parliament, including Ahmad Naderi, a representative, had previously referred to the Taliban as "one of the authentic movements of the region with a Pashtun ethnic background" before their return to power, emphasizing that "collaboration with the Taliban could lead to the expansion of stability in Afghanistan and prevent the infiltration of groups like ISIS."

FMs Tackle Hosting Concerns For Iranian, Saudi Football Teams

Aug 28, 2023, 12:34 GMT+1

Efforts to address the hosting predicament surrounding the matches involving Iranian and Saudi Arabian football teams have been undertaken by the foreign ministers of both nations.

Since 2016, matches between representatives from Iran and Saudi Arabia in the Asian Champions League have been conducted on neutral territory, as mandated by the AFC executive board. Recent developments, however, have given rise to speculation about potential alterations to this arrangement.

According to reports, the Asian Football Confederation has initiated communication with the football federations of Iran and Saudi Arabia, with the aim of collaboratively designating a host location in a third country.

Mehdi Taj, the head of the Iran Football Federation, revealed during a sideline conversation at the Football Board Assembly that "Iran's Foreign Minister engaged in discussions with his Saudi Arabian counterpart to address the issue of holding matches between the two countries' representatives on neutral ground."

In contrast, Reza Darvish, the CEO of Persepolis football club, expressed his club's rejection of the directive received from the federation to select a host for Al-Nasr FC. He further communicated that Persepolis club is actively communicating with the football federation through correspondence, with the goal of retaining the privilege to host the match in Iran.

These negotiations occur against the backdrop of a significant diplomatic rapprochement facilitated by China in March. This initiative brought an end to years of animosity between Iran and Saudi Arabia, which had strained regional stability in Yemen, Syria, and Lebanon. On June 7, 2023, Iran formally reopened its embassy in Saudi Arabia, marking a pivotal step towards the restoration of diplomatic relations.

Ex-Diplomat Says BRICS Cannot Help Iran Without A Deal With The West

Aug 28, 2023, 12:13 GMT+1
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Iran International Newsroom

Amid Islamic Republic's international isolation, a few individuals with close ties to the regime appear optimistic about the country's recent inclusion in BRICS.

However, observers and experts in Tehran are starting to question the significance of this membership, particularly its unclear economic implications that Iranian officials have yet to elucidate.

There have been numerous social media posts about President Ebrahim Raisi's incoherent mumbling upon his return from South Africa at Tehran's airport. It can hardly be translated into any language including Persian, as it sounds like Greek to anyone, including Persians.

Nour News, a media outlet linked to Iran's Supreme Council of National Security, has offered this seemingly sophisticated explanation in a Threads post: "Six new members have been added to BRICS from the continents of America, Asia, and Africa. With these additions, 45 percent of the world's population and the owners of more than 30 percent of the world's gross product are now part of this alliance. This development signifies the breakdown of the old order that was rooted in geopolitics and the rise of a new order founded on geoeconomic cooperation."

The numbers, whatever practical implications they hold for Iran, are primarily driven by the substantial populations of India and China. However, the potential benefits of these figures for Iran remain uncertain, especially while the US sanctions are still in effect.

President Ebrahim Raisi during the BRICS summit in South Africa's Johannesburg on August 24, 2023
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President Ebrahim Raisi during the BRICS summit in South Africa's Johannesburg on August 24, 2023

Kourosh Ahmadi, a former Iranian diplomat at the United Nations told Entekhab website in Tehran, " We cannot hold any hope of benefiting from the financial resources of BRICS as long as US sanctions remain in place," he emphasized. He went on to add, "Iranian officials must not be consumed by illusions regarding membership in the Shanghai Cooperation Organization and BRICS. Should they fall into such illusions, their membership could prove more detrimental than not being members at all"

Ahmadi pointed out that BRICS members decided to magnify the alliance's importance after several years of disputes particularly between India and China. India had concerns about the possible anti-Western tendency of BRICS. Ahmadi further noted that some of the pro-West and pro-East countries invited to the South Africa summit, were not interested in becoming members. 

The interactions between the leaders of China and India were notably less than friendly. In contrast, while Saudi Arabia was granted membership, Riyadh expressed its intention to deliberate on the issue. Evidently, Riyadh does not share Iran's urgency to forge alignments with either China or the United States.

Ahmadi expressed doubt that, in the long run, expanding the number of its members would necessarily elevate the significance or influence of BRICS, and added, "I can hardly contain my laughter when I hear Iranian officials suggesting that BRICS will undermine the international dominance of the US dollar."

According to Entekhab it is doubtful that Iran could benefit from its BRICS membership without finalizing the negotiations with the United States and Europe over the 2015 nuclear deal (JCPOA). Ahmadi defined BRICS simply as "a forum for dialogue." He added that it even lacks a secretariat and a charter. Its founders defined it as "a way to promote dialogue and cooperation between the member states." He further added: "It is something like the Non-Aligned Movement." 

Ahmadi reiterated that "Iranian officials should understand that without sorting out the nuclear issue through negotiations and without accepting the terms of the Financial Action Task Force (FATF), membership in organizations like BRICS or Shanghai cannot help Iran." 

Regarding the Iranian government's propaganda, he said: "The government has every right to promote itself, but independent and knowledgeable individuals are also free to accept or dismiss it."

 

Iran Demands To Know US Ties With Prisoner Convicted to Death

Aug 28, 2023, 11:25 GMT+1

Iran called on the United States to clarify its association with Jamshid Sharmahd, an Iranian-German national sentenced to death in Iran after a State Department official met with his family.

Foreign Ministry Spokesperson Nasser Kanaani stated, "The United States government must respond to the Iranian government and people regarding the individual who is recognized and condemned in court for terrorism."

He added that Sharmahd, “responsible for a recognized terrorist group, has committed numerous acts of terrorism against Iran." He specifically alleged that Sharmahd had a role in planning and executing bombings in Shiraz, resulting in deaths and injuries.

Kanaani's remarks followed a meeting between US envoy for Iran, Abram Paley, and the family of Jamshid Sharmahd. Sharmahd, a German Iranian citizen abducted by Iranian agents in Dubai, in 2020, was sentenced to death in Iran in February. He was convicted of leading a pro-monarchist group linked to a deadly 2008 bombing.

Paley succeeded Rob Malley as US envoy for Iran, with Malley placed on unpaid leave due to security protocol violations. Sharmahd's family, including his son and daughter, Gazelle and Shayan, have been actively seeking US officials' attention through sit-in protests outside the State Department to advocate for their father's case.

A controversial deal exchanging five US citizens held hostage by Iran for the release of $6 billion in Iranian funds frozen in South Korea has sparked criticism, especially due to the exclusion of Sharamhd, who hold US permanent residency and another prisoner. Former hostages and analysts argue that the deal could embolden future hostage-taking incidents.

Sharmahd's health has deteriorated during his imprisonment, with human rights organizations expressing concern. He has been held in solitary confinement and denied fair legal proceedings. In February, Iran's judiciary handed down a death sentence.

Iran Publishes Alleged US Memo, Deepening Controversy Over Malley

Aug 28, 2023, 03:17 GMT+1

Regime affiliated Tehran Times has published a “sensitive but unclassified" US government memo allegedly showing three violations of US national security protocols by suspended Iran envoy, Rob Malley.

The document, purportedly from Erin Smart, Director of the State Department's Bureau of Diplomatic Security, Office of Personnel Security and Suitability, cites three reasons for Malley's suspension: “Personal Conduct,” “Handling of Protected Information,” and “Use of Information Technology.” The memorandum further underscores that Malley's “continued national security eligibility is not clearly consistent with the interests of national security."

While Iran International has yet to independently verify the document's authenticity, it has been informally corroborated by two congressional sources, who have described it as seemingly "authentic."

Iran International reached out to the State Department for confirmation on the authenticity of the leaked document; however, there was no immediate response.

Michael McCaul, chairman of the US House Foreign Affairs Committee, expressed concerns in July, hinting at a possible subpoena if the Biden administration remains reticent on the specifics of Malley's situation.

McCaul, relying on publicly available information, voiced serious apprehensions: "If he (Malley) has leaked very sensitive or classified information to our foreign adversaries like Iran or Russia, that's a very serious act that would fall under treason."

The State Department, citing privacy, has remained largely silent on the matter. However, the memo published by Tehran Times suggests that Malley might have been privy to the reasons behind his suspension, contrary to his earlier statements to the media.

"I have been informed that my security clearance is under review. I have not been provided any further information, but I expect the investigation to be resolved favorably and soon," Malley said in response to press inquiries at the time.

In the wake of the leaked document, Gabriel Noronha, a former State Department advisor on Iran, took to Twitter, suggesting, "The letter indicates Malley lied about not knowing why his clearance was pulled."

Richard Goldberg, a National Security Council official from the Trump era, remarked, "The Tehran Times knows more about Rob Malley than the New York Times. This is insane."

The controversy has also stirred debates among Iran analysts. Princeton University's decision to employ Malley at its School of Public and International Affairs has drawn criticism. Alireza Nader, an Iran analyst and a former senior researcher at the RAND Corporation questioned the institution's judgment, asking, "What in the world are Princeton and its SPIA dean Amaney Jamal thinking in hiring Malley? Does anyone want someone like this teaching students?"

Jason Brodsky, a policy director at the United Against Nuclear Iran, weighed in on the situation, expressing deep concern over the leak to a state-run newspaper of a nation often at odds with the US. "Can you imagine if this situation happened during the Trump administration? Somehow, I think there would be more press and congressional scrutiny. Just extraordinary. This is a newspaper of a hostile foreign power in possession of a seemingly authentic sensitive document."

Earlier this year, Iran International revealed Malley's interactions with Iran's UN ambassador, Amir Saeed Iravani, a former high-ranking member of Iran’s Supreme National Security Council. These interactions marked a pivotal diplomatic touchpoint, being the first direct US-Iranian official communication since the US's 2018 JCPOA withdrawal. The State Department, when questioned about these meetings, responded, "We have the means to deliver specific and firm messages to Iran when it is in America's interest to do so.”

Iran International first reported June 29 that Malley had been absent for a considerable time, his security clearance was suspended and he is under investigation related to his handling of classified documents. The Involvement of the Federal Bureau of Investigation was also reported, although until now no official details have been announced, except that Malley is on “unpaid leave.”