Retaliatory Attack By Iran's Proxies On Israel Seen More Likely

The US Central Command said on X its forces had destroyed an air defense system with two missiles ready to launch, a ground control station in Houthi-controlled areas of Yemen and one unmanned aerial system launched by the Houthis from Yemen over the Red Sea.

Houthi forces in Yemen said on Sunday they had launched rockets and drones at British, US and Israeli ships, the latest in a campaign of attacks on shipping in support of Palestinians in the Gaza war.

The US Central Command said on Sunday, an anti-ship ballistic missile was launched from a Houthi-controlled area of Yemen toward the Gulf of Aden where also no injuries or damage were reported by US, coalition or commercial ships.

Houthi attacks have disrupted global shipping through the Suez Canal, forcing firms to re-route to longer and more expensive journeys around southern Africa. The United States and Britain have launched strikes on Houthi targets in Yemen.

The Houthi militants, who control the most populous parts of Yemen, call their action a response to Israel's military operations in Gaza and a show of solidarity to Palestinians. The attacks began after Iran's Supreme Leader Ali Khamenei called on Muslims in early November to blockade Israel.

Israel's assault on Gaza has killed more than 33,000 people according to the local health ministry and displaced nearly the entire population of 2.3 million. Israel says a large part of the casualties were Hamas fighters.

The Israeli offensive began after Palestinian Islamist group Hamas' Oct 7 attack on Israel that killed 1,200 people, according to Israeli tallies.

With reporting by Reuters

An examination of the data from the Central Bank of Iran unveils that his government is actually the largest debtor among them.

“You remember that in an election meeting, they handed the candidates the names of three [major debtors] in sealed envelopes, but now [Economy Minister] Mr. Khandouzi is releasing the financial information of 2,000 companies on [the Central Bank] website for everyone to see,” President Raisi said at a meeting with hardliner student activists on Saturday.

Raisi was referring to a highly sensational presidential election debate in 2021. During this debate, his rival, the former Governor of the Central Bank of Iran, Naser Hemmati, handed him a sealed envelope purportedly containing a list of top debtors to the banking system. Hemmati later said that he had previously provided the names to the judiciary, which was headed at the time by Raisi, on multiple occasions – saying that action was taken. Hemmati added that he himself couldn't announce the names during the debate due to legal constraints.

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It has long been an open secret that Iran's predominantly government-controlled banks face a shortage of capital and that their lending policies are influenced by insiders, such as Iran’s clerics.

The ministry of economy defines a 'major debtor' as persons or entities that hold loans worth at least 10% of a bank's total resources and defaulting on the payments. 

In November 2021, such loans were estimated to total around $10 billion but the value of these loans would have been 5-6-fold higher in dollar equivalents, at the time they were granted. The Iranian currency dropped significantly from mid-2018, but most of these loans were issued before that period.

Six months after an order by the economy minister mandated them to comply, four state-owned banks, including Bank-e Melli, Iran's largest bank, released their lists of major debtors in April 2022. Subsequently, the Central Bank published its list, encompassing 14 other banks along with their major debtors.

The data published at that time and subsequently has, however, been incomplete and vague.

“What interest rates were charged on the loans granted to major debtors? What guarantees were taken for the loans? How were the borrowers’ credit and guarantee assessed? How much of these debts can be recovered and [the collection of] how much is doubtful or impossible?” an editorial in the reformist news outlet Shargh asked after publication of the first set of lists.

Allegations have persisted that major debtors with poor credit utilize loans to speculate in housing, foreign currency, and gold markets rather than investing in production – contributing to higher inflation rates.

“What were these loans for? Were the loans spent for the purposes indicated on loan application forms? What assets were created by the money taken from the bank and how much added value was produced?” the editorial asked, referring to such allegations.

The public is often led to believe that major debtors to the banking system are individuals and private companies.

But, Iran International’s examination of the data provided by the Central Bank and other banks indicates that the private sector’s share of such loans is minimal.

Instead, entities such as the State Welfare Organization, the National Iranian Oil Company (NIOC), and companies owned by banks, automakers, and several other government agencies emerge as the top debtors.

During his campaign Raisi promised that borrowing from the Central Bank was a “redline” his government would not cross. Government officials, accordingly, claim they are fulfilling this promise.

Experts assert that rather than borrowing directly from the Central Bank to address its budget deficit, the government has significantly increased its borrowing from other banks to obscure its financial activities.

This practice, in turn, puts pressure on the Central Bank to print more money in order to provide loans to these banks – leading to an increase in liquidity and higher inflation, according to these experts. According to Iran International's calculations based on periodic official statements, The Raisi government has been printing the equivalent of $460 million per month, adding to the monetary base.

“The government and government-owned companies’ debts to the banking system have doubled since August 2021 when Raisi assumed office,” Dalga Khatinoglu, an Iran economic analyst and oil expert, told Iran International.

“Debts to the banking system include bonds that the government has issued and forced banks to buy as payment of previous government debts. This is the reason the government’s debts to banks are continuously increasing despite payments claimed to be made,” he said.

“But the government’s debt to the banking system is only a fraction of its overall debts. It has also borrowed very heavily from the Central Banks and owes $100 billion to the National Development Fund. The total amounts to $118 billion, that is, equal to two and half years of the government [operating] budget,” Khatinoglu added.

During a match in Tehran, fans turned the moment into a minute of boos and jeers by blowing horns and shouting, a gesture captured on video that swiftly spread across social media platforms.

Last week’s airstrike saw a top commander and six IRGC forces killed in the brazen strike to Iran’s personnel abroad.

The incident echoes a similar occurrence in October, when hundreds of Iranian fans at another football match in Tehran protested against the presence of Palestinian flags on the pitch.

While the Islamic Republic's propaganda machinery orchestrated street celebrations in support of what they termed the "Palestinian victory” after the October 7 invasion of Israel by Hamas, the atmosphere at the football match revealed a different sentiment among Iranian fans.

Chants of "Take that Palestinian flag and shove it up your A**!" were heard, highlighting a divergence from the regime's narrative.

The Hamas attack claimed the lives of 1,200 predominantly civilians, and saw 250 others taken hostage and remains a contentious issue in Iran.

Despite attempts to galvanize public support through organized rallies, ordinary Iranians largely refrained from participating, underscoring the nuanced and diverse nature of public sentiment within the country.

Speaking on Sunday, Ejei emphasized the need for better utilization of existing laws by law enforcement, the Ministry of Interior, and the judiciary to enforce hijab, suggesting that more than “70% of the problems could be resolved through proper enforcement.”

The remarks come shortly after a speech by Ali Khamenei, the Supreme Leader of Iran, to officials where he reiterated the importance of compulsory hijab for women.

The legislative efforts surrounding hijab have been contentious. A bill, initially drafted by the government and later revised by hardline factions in parliament, proposed penalties including heavy fines for women not adhering to the prescribed Islamic dress code.

Amirhossein Bankipour, an MP supporting the compulsory hijab law, announced adjustments to address shortcomings in the bill, signaling its progression for final approval.

Meanwhile, voices within religious circles have urged for further hijab enforcement. Mohammad Javad Fazel Lankrani, a member of the Society of Seminary Teachers of Qom, condemned the defiance of hijab as a "sinister conspiracy" and said the Islamic hair covering is beyond personal choice.

International scrutiny over Iran's mandatory hijab laws has intensified, with human rights experts from the United Nations expressing concerns over systematic discrimination against women.

Amnesty International criticized the enactment of a three-year experimental period for the mandatory hijab law, denouncing it as a violation of women's rights.

Despite the government's efforts to suppress dissent, civil disobedience against compulsory hijab has grown, particularly since the controversial death of Mahsa Amini in 2022 which led to the Women, Life, Freedom uprising.

Etemad daily reported last week that the budget bill for the current year received only partial approval from the parliament, a situation unprecedented in Iran. The approval process saw the bill exchanged between the government, parliament, and Guardian Council multiple times over several months. Even when partially approved, the bill required over 20 revisions in a single day. Notably, the parliament granted the government permission to utilize an "on account" budget before receiving full approval from the Guardian Council.

Describing the new Iranian year (1403, which began on March 20) as "a year without a plan," Etemad highlighted the uncertainty faced by the government regarding its budget allocation. Additionally, the government lacks clarity on which areas and sectors it can allocate funds to using the on-account budget. The parliament has pledged to provide clarification on this matter in April and May.

In practical terms, Etemad noted that the government has only received guidance on the first two months of the year from the parliament. However, there are no established laws or regulations governing the on-account budget and how parliament can oversee its spending.

The government’s own news agency, IRNA, has said in a commentary that this kind of unplanned budgeting will certainly lead to higher inflation. Former Lawmaker Gholam Ali Jafarzadeh Imanabadi concurred with IRNA and said the government cannot be happier about spending the budget without any legislative supervision.

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Imanabadi criticized the lack of clarity, stating, "It's regrettable that no one knows how much budget the government has for the current year." He sarcastically added, "The Majles can only supervise the way people keep their pets and walk their dogs," referring to ever-more stringent Islamic regulations.

According to Etemad, a preliminary version of the budget bill sets the annual budget of Iran at 60,479 trillion rials, which is slightly more than $100 billion after the national currency fell 30% in the past three months. Government-owned companies allocated around 37,000 trillion rials and the government’s operation budget 27,000 trillion rials.

Etemad emphasized the absence of both a budget and a plan for spending, despite the presence of the Planning and Budget Organization in Iran.

In his New Year's Day speech, President Raisi claimed, without evidence, that the inflation rate in Iran is decreasing. However, Iran International TV reports a 40 percent increase in housing costs over the past year, with Tehran experiencing a rise of over 50 percent during the same period.

Jailed sociologist Saeed Madani had said earlier that widespread economic problems were part of the underlying crises in Iran during the past year which have led, among other things, to a rise in emigration of educated Iranians and brain drain, and a decline in the turnout in the country's recent elections.

Avaz Heidarpour, a medical doctor and a former lawmaker, told Khabar Online that some 10,000 medical staff have left Iran in the past three years saying that they need welfare for their families and hope for their children.

Outlining the importance of economic issues in social movements, sociologist Ahmad Bokharai told Khabar Online: "The protests in 1999 and 2009 were political in nature while the ones in 2017 and 2019 had economic reasons. What happened during the 2022 protests was a revolt with combined political, economic and cultural motivations.

In an interview with Etemad, lawmaker Ahmad Alirezabeigi likened the partial approval of the budget bill by the Majles to "drinking a cup of poisonous hemlock," indicating it was an unavoidable action. This suggests it may have been directed by none other than Supreme Leader Ali Khamenei as a solution to the political impasse between the government, the parliament, and the Guardian Council.