Iran Minister Faces Impeachment Over Persisting Economic Crisis

Mehdi Niyazi told local media that from April to September 1,793 industrial and trading companies were seized by banks after they failed to make loan payments. Most banks in Iran are fully or partly state owned.

Niyazi added that over 60 percent of companies in Iran have financial problems because of high inflation, estimated to be close to 50 percent and lack of finance.

He explained that many companies after seizure of ownership by banks stopped operations, a situation that would increase an already high unemployment rate. One bank that just last year had 60 companies under its receivership now has ownership of 160 firms.

The deputy minister partly blamed high interest rates the banks charge for the insolvency of companies struggling amid sanctions and an economic crisis.

Iran’s weak economy took a turn for worse in 2018 when the United States withdrew from the 2015 nuclear agreement and imposed tough sanctions on the country.

Hawza News, news agency of Qom’s seminaries, claimed Tuesday that the woman had attacked the cleric around two months ago after he had criticized her hijab. Hawza News made no mention of legal action against the two clerics.

The arrest took place after New York-based activist Masih Alinejad tweeted Monday a video of the incident. Alinejad, who has a strong social media presence both in Iran and in the diaspora, is a critic of mandatory hijab in Iran.

In the video, which is undated, the woman attacks a middle-aged cleric, who holds a cane, knocking off his turban and trampling on it. The cleric is seen using his cane trying to hit the woman. She then chases another cleric across the street, before knocking off his turban too, as passers-by gather and watch.

In an interview with Iran International Tuesday, Toronto-based lawyer and activist Mehrangiz Kar said the clerics should have been arrested, and that one had committed a crime by “meddling with a citizen's rights” and hitting her on the head with his cane. The woman had only defended herself, Kar argued.

More than four decades after the Islamic Revolution of 1979, there is still much resistance to the prescribed standards of hijab promoted by the state, which many women refuse to accept even at the cost of being arrested, fined or even lashed.

In recent years, social media has been rife with tens of cases of fights with clerics over hijab and other matters. Some Iranians, including clerics such as Ayatollah Mostafa Mohaghegh-Damad, believe involvement of clerics in governance has damaged the sanctity surrounding them.

Seminaries, religious groups, and many government bodies including the education ministry work at "establishing the culture of modesty and hijab." Seminars, exhibitions, and state television all encourage adherence, and the state-run television airs many programs on the subject.

Qom hosts dozens of seminaries with over 100,000 students, meaning some clerics are alive to any slackening in standards.

Hardliners say adherence to hijab in Qom has hugely diminished in the past few years. "The mushrooming of loose hijab in the holy city of Qom cannot be denied," the news agency of the state broadcaster IRIB said in a report on the situation of hijab in Qom in August.

An activist introduced by her last name, Hosseini, told Fars news agency two years ago that she had organized over 450 'trained hijab patrols' to warn women over poor hijab in Qom. She said her colleagues handed out gifts such as veils, veil pins, and books about the lives of martyrs to women on the streets to encourage them.

Hojatollah Abdolmaleki made the remarks before the Iranian parliament on Tuesday, stressing that his ministry is only responsible for coordination among other ministries and departments are tasked with dealing with unemployment.

He noted that the current administration took over the government at a time when about 14 million people did not have decent jobs, while 2.5 million people were completely unemployed.

The minister, the youngest in the cabinet, added that according to plans about 1,850,000 jobs will be created in the country in the next 18 months, an average of over 100,000 jobs per month.

According to him, about 217,000 jobs have been created during the last three months. He did not explain how so many jobs can be created amid a serious economic crisis worsened by US sanctions.

There are numerous figures about Iran’s unemployment rate, ranging from the IMF which put it at about 11 percent to other sources who report it to be over 20 percent.

Part of the huge difference in numbers might be due to the government’s definition of employment. The Islamic Republic considers anyone who works for one hour a week, as employed, which means that the government greatly overestimated the number of truly employed people.

In the Tuesday rallies, the pensioners in Tehran gathered in outside the parliament while people in other cities held their protests at the provincial offices of the Civil Servants Pension Organization.

“Stand up and fight discrimination”, read some of the banners they carried during the rallies, while they were also chanting slogans against “incompetent authorities”, asking for their resignation.

The protesters demand higher pensions on par with the country’s inflation rate and rising costs of living. The annual inflation rate has hovered around 45 percent in recent months.

They called on the country’s authorities to accelerate efforts and approve laws that can potentially improve their pensions.

A bill to address the pensioners’ demands has been languishing in the parliament for months.

Iran, which is hit hard by economic sanctions, is the scene of frequent labor protests and strikes.

Hundreds of striking and protesting workers and labor activists have been arrested since 2017, many spending months in prison. Some are still detained without trial.

President Ebrahim Raisi (Raeesi) recently submitted a budget bill to parliament that included eliminating the below-market exchange rate of 42,000 rial to the dollar for essential imports while increasing cash payments to citizens to compensate for any price rises.

Hamid Pourmohammadi, a senior economic policy official, told state television Monday that ending a special exchange rate for essential imports would increase inflation by just 7 percent.

Pourmohammadi, deputy head of the Planning and Budget Organization, told IRIB that higher prices for some daily purchases like bread would be compensated by increased government cash payments to citizens.But the amount of the additional payments mentioned by officials is only around $4 of cash handouts per month.

Inflation reports in recent month by the Statistical Center of Iran, a government organization has put the annual inflation rate at 45 percent.

Pourmohammadi argued that continuing to allocate dollars at a lower rate for essential imports would lead to a 28 percent jump in inflation, by forcing the government to print money to offset the fiscal losses caused by continuing high demand on foreign exchange.

The World Bank wrote last year that Covid-19 spending and “plummeting” oil revenue, due to the United States ‘maximum pressure’ sanctions that began in 2018, were taking Iran’s fiscal deficit to over 6 percent of GDP.

The subsidized rate − currently 42,000 rials to the dollar − has been in use since April 2018 - to hold down costs of imported food, medicine, and animal feed. The street rate stands at around 300,000.

There was only a single forex rate before 2018, when the government of President Hassan Rouhani introduced a subsidized rate of 42,000 after the rial fell to nearly 60,000 against the dollar in April 2018 as US president Donald Trump prepared to withdraw from the 2015 nuclear deal, the JCPOA (Joint Comprehensive Plan of Action).

Critics say forex reform, although necessary, will push up the already high rate of inflation to a level above the tolerance of vast groups of Iranians and cause a major upheaval.

"People's patience with economic [hardships] is running out,” a commentary in the conservative Asr-e Iran website Tuesday said. “The Iranian people are under 'maximum pressure’ on their subsistence. The burden imposed on them over the years has gradually grown so heavy that increasing a feather on top will break their backs."

The commentary argued there should be no price increases: "Stop…weighing people down with new economic burdens. Otherwise, the number of people who have nothing to lose will increase next year and you are better than anyone aware of the catastrophic security consequences of such circumstances."

Hassan Sadeghi a labor activist said at a union meeting on Monday said, "In fact, the government wants to offset its budget deficit by increasing the forex rate [for importing essential commodities] to the level of the rate in the open market. The pressure of this move will fall on the lower income classes and workers.”