Economic Freedom Report Places Iran At Bottom Of The List

Majid-Reza Hariri told Mehr news agency in an interview published Monday that China owes no money to Iran for oil imports but does hold Iranian assets.

Hariri argued there had been confusion over $21 billion in Iranian assets that some reports have suggested are in China due to Chinese fears of punitive United States action against anyone buying Iranian oil or interacting with Iran’s financial system.

The business leader said that Iranian money in China consisted of Iran's reserves – cash, bonds, and stocks − that had been transferred to China years earlier in fear of confiscation.

"After 2007 there was a possibility of confiscation of Iran's currency reserves in international banks, particularly European banks, because of legal suits brought against Iran by some European countries or the United States," Hariri explained.

Iran is known to have moved hard currency reserves and bonds to China from banks in Britain, Germany, France and Switzerland to protect them from being confiscated. Washington this week announced it will seize $7 billon of Afghan reserves held in the US.

Hariri said India, like China, had exported goods to Iran as an alternative to dollar payments. These, he pointed out, had included medicine and pharmaceutical ingredients. But other countries, he said, including South Korea − where over $7 billion of Iranian assets are frozen in fear of US action − and Japan had refused payment in kind.

With the administration of President Joe Biden continuing ‘maximum pressure’ sanctions, Washington said in January it would waive any threat of sanctions on South Korea only with “everything” agreed in Vienna on reviving the JCPOA, where talks are reportedly in their final stages..

Billions of dollars of Iranian money is frozen abroad in fear of US sanctions, including in South Korea, Japan, China, Europe, India, and Iraq. The semi-official Iranian Students News Agency (ISNA) estimated in November the total at $50 billion, with $8 billion in South Korea, $3 billion in Japan, and $6 billion in Iraq.

Some countries such as Iraq to which Iran exports electricity and gas but not oil, freeze the money so the volume of frozen money is growing in their banks. Iraq now owes Iran around $7 billion for gas and electricity to Iran.

Other countries such as South Korea, Japan, and India no longer import crude oil from Iran so the assets frozen in their banks date back to before full US oil sanctions went into effect in May 2019, when Washington offered eight countries waivers to import limited quantities of Iranian oil.

China continued buying oil from Iran even after the US imposed full sanctions. The volume was less than 200,000 per day from May 2019 until late 2020, when it increased reaching to more than 500,000 in 2021 and even more by December-January.

The Biden Administration reportedly does not attempt to vigorously enforce the sanctions, as Chinese importers believe the risk of violating the sanctions are relatively low.

Technicians, plumbers, cooks, electricians and experts in various fields are trying to find jobs abroad. Those who cannot emigrate to Europe and the Americas, due to financial or visa limitations, choose Turkey or the United Arab Emirates as their favorite destination.

Millions of mostly educated and professional Iranians have left the country for good since the 1979 revolution and the trend has continued for the past four decades, but a new economic crisis and uncertainty since 2018 has encouraged more people to leave.

Hamid Hosseini, a member of Iran’s chamber of commerce, told Khabar Online website on Monday that he believes all kinds of professionals are migrating, essentially because they have little hope of a better life in the future.

Hosseini, who is a top business operative in the petrochemicals sector, said what he hears from emigration agencies is that the number of people seeking services has multiplied in recent months. While in the past mostly top professionals were looking to find jobs and residence permits abroad, now tradesmen and ordinary professionals are seeking to emigrate.

“Most of these people say they will have higher incomes

abroad and a more comfortable life,” Hosseini said. He emphasized that the phrase “a comfortable life” is an important window into the thinking of prospective emigrants. It shows, he said, that people are apprehensive about the future of the country. “They are tired and concerned,” he argued.

Wages and incomes have precipitously dropped in Iran since 2018 when the United States withdrew from the 2015 nuclear agreement and imposed sanctions, prompting high, double-digit inflation.

But the economic crisis, although important, is not the only factor in nurturing pessimism. The clerical political system has become less tolerant and more erratic and unpredictable in recent years as it has faced more opposition. Younger people are tired of waiting for a bit of loosening of religious restrictions and getting a fair deal in state-run economy controlled by insiders.

Hosseini argued that neighboring countries such as Turkey and the United Arab Emirates have plans to attract qualified professionals.

Tens of thousands of high middle-class Iranians have easily bought homes in Turkey, received residence permits and moved part of their capital to the neighboring country. Iranians are at the top of foreign real estate buyers in Turkey.

But Hosseini singled out the UAE as a new attractive destination for private Iranian companies because its government has a serious plan to attract industrial manufacturers. He pointed out that the UAE is establishing an industrial zone, where investors get free land and attractive bank loans to set up business.

Hosseini was referring to an ambitious plan UAE announced in March 2021 to expand its manufacturing sector, as diversification of its economy from an energy exporter and a commercial hub also to a regional magnet for industry. The plan is to triple annual manufacturing output from around $30 billion to more than $80 billion by 2031.

A new factor encouraging companies to leave is a plan by the parliament to impose taxes on firms operating in Iran's free economic zones. Saeed Mohammad, the president's coordinator for free zones, warned Tuesday that this would be devastating for the economy as many companies would choose incentives offered by neighboring countries.

Hosseini warned that Iran can lose a lot of talent, knowhow and capital to the UAE. Asked if a nuclear agreement and lifting of US sanctions can help the situation, he said “society needs peace and tranquility” not constant interference by the government. He singled out internet restrictions in Iran and erratic laws that are often contradictory and make life for the ordinary citizen unpredictable.

He added, “Problems will be solved when we adopt moderation…which will gradually strengthen hope for the future.”

Ramazan Sharif was commenting on a story and a 50-minute recording published by the United States-funded Radio Farda based on an audio recording of a conversation in 2018 between former Guards (IRGC) commander Mohammad-Ali Jafari and his Economic Affairs Deputy Sadegh Zolghadr.

Sharif said that the case cited in the recording had been dealt with, presumably referring to the judiciary announcing last year that four defendants had been sentenced to two to 30 years in prison over embezzlement in the case. Human-rights campaigner Emadeddin Baghi has pointed out that the tape had been published on a Telegram channel two years ago. At the time it went unnoticed by media and then the channel closed down and the recording disappeared.

In the audio file, Jafari tells Zolghadr that Soleimani, who was killed by a United States drone attack in Baghdad in 2020, knew about 80,000 billion rials (around $3 billion at the time) held by Tehran municipality and Yas Holding, a firm controlled by the IRGC's Cooperatives Foundation, and had also been aware of corruption allegations before any public indictment and trials.

The tape even reveals that Soleimani was upset about the action taken by Jafari and Zolghadr against those who had embezzled the money and spoke to Supreme Leader Ali Khamenei about it.

The funds had been due to reach the Qods (Quds) Force, the IRGC extraterritorial arm, which Soleimani commanded. In the recording, Zolghadr says that Ali Khamenei, Iran’s Supreme Leader, had ordered 90 percent of the money, earned by Yas Holding, to be used to finance the Qods Force with the remainder going to the IRGC for general needs.

In a note Monday, Hossein Shariatmadari, chief editor of the flagship hardliner Kayhan daily, defended Soleimani and others – including Tehran mayor Mohammad Bagher Ghalibaf and the head of IRGC intelligence Hossein Taeb – mentioned in the recording. Most other hardliner media such as the IRGC-linked Javan newspaper are still completely silent about the highly controversial contents of the audio recording but in a note Monday

‘Cleverly lured’

"It was said that the Qods Force was supposed to have a share of the revenues of the said firm,” he noted. “What is wrong or dirty about this?" He claimed the IRGC and judiciary had shown their integrity by prosecuting corrupt individuals.

Shariatmadari also defended Mohammad Bagher Ghalibaf, Tehran mayor at the time, saying he had "cleverly lured" his ex-deputy, Isa Sharif, back to Iran from Canada so he could be prosecuted.

Mahmoud Abbaszadeh Meshkini, spokesman for parliament’s national security committee, Saturday detected “psychological war” in Radio Farda’s publication of the recording. “The ill-wishers have failed to achieve what they sought and use as an excuse to tarnish the IRGC’s image.”

But critics of the Islamic Republic, and specially the economic and political power held by the IRGC were quick to show the recording as proof of deep corruption, that Soleimani and other senior figures were aware of.

The problem for the regime is that in its infinite lack of transparency, once such a scandal reveals itself, all officials involved fall under suspicion. There is no proof in the recording that Soleimani personally benefitted from the corruption, but critics have a right to question everyone's role, since there is no free media in the country or independent courts to investigate the matter.

Former reformist interior minister Mostafa Tajzadeh tweeted Saturday that the case showed a conflict of interest within the military and political establishment. "Can you see the outcome of putting weapons, intelligence, money, and media [in the same hands]?” he wrote. “Is this anything other than the military's control over diplomacy and economy? Is there anyone to hold to account? Is there anyone who dares to prosecute?"

Abdolmaleki, himself under fire by the Iranian parliament (Majles) for "incompetence" has made many controversial comments during the past six months and has been involved in more controversies by what he did or failed to do.

He started his work as minister last August by promising to create 750,000 jobs at low cost during his first year in office, but after a few weeks he claimed that creating jobs is not part of his responsibilities. Later he had to distance himself from another controversial comment about manufacturing low-price versions of the Italian luxury sportscar Lamborghini in Iran. He even told Iranians to resize the doors of their garages to make them suitable for the new cars.

Abdolmaleki was the first cabinet minister in the President Ebrahim Raisi administration whom lawmakers decided to impeach, but Speaker Mohammad Bagher Ghalibaf temporarily saved him by postponing the procedure for six months.

Now, according to Sazandegi newspaper, Abdolmaleki, a former TV show host, says he has sent 1,120 corruption cases to the court, adding that most of these managers have been charged with financial corruption.

Abdolmaleki is not alone among Raisi aides who are labelled as unfit for senior positions, but hardliners with little experience have dominated the president’s roster of nominees.

According to Aftab News, major purging operations in the administrative system in Iran started in 1981, two years after the establishment of the Islamic Republic, when the Planning and Budget Organization fired at least 750 experts. Later in the same year, the Iranian Oil Ministry fired 2,900 of its employees.

Reformist daily Etemad wrote that since Abdolmaleki was nominated, a catalogue of worrying news about his controversial decisions, behavior, comments and appointments have found their way into the press. The daily stated that concerns caused by the minister's decisions and actions have been so serious that both President Ebrahim Raisi and Vice President Mohammad Mokhber have warned him to avoid adding to the government's problems.

Regardless of the warnings by his superiors Abdolmaleki has been constantly creating new controversies including asking the State Administrative and Employment Organization to approve the employment of 12 of his friends regardless of regulations that preclude their hiring.

According to Etemad, not only Abdolmaleki lacks practical experience and academic credentials, but he also seems to be adamant to repeat his errant behavior.

Abdolmaleki has also been criticized for giving top jobs to the relatives of other officials particularly the members of the ultraconservative Paydari Party. The media in Iran say that the purging operation at the ministry is partly intended to cover up these actions.

Aftab news wrote that the firing of more than half of the labor ministry's managers will cause problems for its subsidiary offices including the Pension Fund and will badly affect businesses and several state-owned companies.

Lawmaker Naser Musavi Largani accused Abdolmaleki of being biased against around 1,200 managers who have graduate degrees. Largani also charged that Abdolmaleki has distributed the ministry's resources among his friends like the spoils of war.

Meanwhile, the Iranian press accused Abdolmaleki of appointing one of his wife's friends as the chief inspector at the ministry. The media charged that this inspector has fabricated cases against the managers Abdolmaleki wanted to fire. Aftab News called on Iran's Public Prosecutor to act. The website reminded that if there were more than 1,000 corrupt managers at the ministry the intelligence agencies and the State Auditing Organization would have certainly known about them.

Gholam Ali Rajaei, also an academic at the University of Tehran, has charged in a February 12 interview published by Rouydad24 website that some of Raisi's aides and cabinet ministers lack executive experience even at middle-management level to occupy posts in any government.

Rajaei said that Iranians are now disillusioned and desperate and have lost their confidence in the government as Iran’s economic crisis gas seriously lowered their living standards.

Similar warnings have multiplied since late 2021 as Iran’s annual inflation hovers around 40 percent and the middle class becomes impoverished.

Meanwhile, Rajai suggested that Raisi should fire his ministers of economy, labor, and industry at once as they are responsible for the administration's most significant weaknesses.

Zaynab Ghabishawi, one of the website's editors added that economic problems, lack of a roadmap, and the performance of incapable managers are to be blamed for the government's inefficiency. Rajaei added to the journalist's comment that most of Raisi's aides and cabinet ministers have never worked even at the level of director generals before being appointed as ministers. He also noted that Raisi himself has spent his entire career in the Judiciary and has no executive experience.

The academic added that although some of Iran's problems have their root in the performance of the previous government, not only the current administration has not been able to improve the situation in the past six months, but it has become worse. "When is the Raisi administration going to launch the plans he was talking about during his election campaign?" Rajai asked.

Rajaei's opinion is corroborated with criticisms made by other observers. The head of Iran's Consumer Support Organization, a price watchdog based in Tehran, told Aftab News website on Sunday that prices of 84 thousand goods in the Iranian market have risen by 120 percent during the past months.

Even some of Raisi's ministers are unhappy about rising prices. Interior Minister Ahmad Vahidi told state television on Saturday that "rising prices in Iran follow no particular logic. Price rises are normally an outcome of scarcity, but prices in Iran rise while there are plenty of goods in the markets."

Vahidi seemed to ignore the rising cost of production as a result of sanctions and other economic factors. He also ignored the fact that the rise in commodity prices inevitably lead to inflation for a range of goods.

The government's solution for the problem is returning to the 1990s punitive regulations that call for the punishment of traders and businesses rather than addressing the root cause of the problem.

Iranian lawmakers have repeatedly called for the impeachment of the same economic ministers Rajaei has mentioned in his interview but knowing that it does not have a true plan to address the problem even if ministers are replaced, the government has been exerting pressure on the parliament to shelve the petitions for impeachment.

Referring to Raisi's much-criticized habit of issuing orders without following them up, Rajaei warned him that "It is time for action, not to issue orders!"