Iran Frees Two British Iranians After UK Pays $530 Million Debt

During four years of high double-digit inflation and the devaluation of Iran’s currency, wages have become a fraction of what workers need to survive. People’s basic needs have become expensive because imports are more expensive. A worker now earns around $100 a month, woefully inadequate even for food.

Last week, the government and labor representatives decided to increase minimum wage by 57 percent, but many warn that this will just lead to more inflation.

Hossein Salahvarzi, deputy chairman of Iran's Chamber of Commerce, in a tweet on March 12 called the increase "nominal" and said it would not help people's livelihoods. "Financial improvement in the lives of the members of the society requires stability in production and trade," he said and argued that the government should "reduce political risk", among other things such as better economic management, to provide economic stability.

Pundits say political stability and improved international trade require reducing tensions with the international community. When production goes up, demand for labor will increase too and workers' wages will rise. The increase in minimum wage under current circumstances would only cause higher prices, ruin a wide range of small businesses, and cause further unemployment as employers will not be able to keep up with the higher costs of production and transportation of goods.

Expectations of more inflation are also based on other factors including large government's budget deficits and a decision to stop subsidies for imported food and other essential goods to save around $8 billion for the government.

Some experts say a higher minimum wage will not boost inflation. "The increase in minimum wage has no inflationary effect at all," Saeed Laylaz, economist, told Khabar Online Tuesday. The root cause of inflation growth in Iran is firstly the government budget deficit, and secondly, corruption in the banking system which reveals itself in disequilibrium.

The Supreme Labor Council which consists of representatives of workers, employers, and the government last week agreed to raise the minimum wage from 26,550,000 rials to 41,790,000 rials, which is nearly $170 in today’s exchange rates.

With the monetary allowances for housing, food and children, the final wage will increase to 62,000,000 rials – almost $240 a month, before $24 is withheld for payroll taxes.

The 57 percent increase was unprecedented in the past three decades. Labor groups say it is difficult to say whether the increase will have a lasting impact in workers' lives. They argue that the rate of inflation, already above 40 percent, may rise to new heights and soon reduce the purchasing power of their wages.

Labor groups also insist that the poverty line in Iran is now around $400 a month for a family of 3.3 people, so the proposed minimum wage is half of the needed money just to be able to survive. Some 60 percent of Iranians have fallen into what government officials describe as poverty and can no longer afford red meat and even fruit and vegetables the consumption of which has hugely dropped in the past few years.

Iranian workers were earning more than $400 a month before the United States imposed sanctions in 2018, which pushed Iran’s currency almost ninefold lower, creating inflation that wages have not kept up with.

Rising prices and economic hardship have led to repeated labor strikes and nationwide protests since 2017, even before the imposition of US sanctions. Iran’s centrally controlled economy is inefficient and not conducive to foreign investments, with high reliance on oil exports.

Gen. McKenzie told the Senate Armed Services Committee on Tuesday that such a step would bolster security cooperation between Israel and its fellow Arab CENTCOM members, including Iraq, the United Arab Emirates, Kuwait, and Saudi Arabia.

He said the most pressing and significant issues all the states in the region confront regarding Iran are air and missile defense, and Israel’s entry into CENTCOM “has great opportunities, particularly in the area of integrated defense”.

Referring to threats by Iran's ballistic and cruise missiles as well as drone program, he said, "Everyone in the region is seized by the Iranian threat, and they want to be able to defend themselves against that threat — that threat is primarily in the air”.

Describing the Islamic Republic’s ballistic missile program as an "exigent threat", McKenzie added, "They have over 3,000 ballistic missiles of various types, some of which can reach Tel Aviv. Over the last five-to-seven years, they have invested heavily in the ballistic missile program. Their missiles have significantly greater range and significantly enhanced accuracy.”

"Iran continues to pose the greatest threat to US interests and the security of the region as a whole. Through its proxies and clients, Iran has fomented conflict, an arc tracing from Yemen through the Arabian Peninsula, across Iraq and Syria and Lebanon and to the very borders of Israel," he noted.

Edalat-e Ali group has provided a copy of a highly confidential letter to Iran International which includes a list of 37 mid-level officials of ex-President Hassan Rouhani’s administration, including 16 oil ministry officials and six working in the gas field, that the IRGC wants to be banned from leaving the country.

The letter dated September 6, 2021, with an attached list from the Revolutionary Guards (IRGC) Intelligence Organization to the Revolutionary Prosecutor of Tehran Ali Alghasi-Mehr also cites reasons for the bans. In the case of most oil officials the reason is preventing them from revealing "secret information" on how Iran manages to circumvent US sanctions to sell crude oil.

IRGC revenge

Nicosia-based oil and gas reporter Behzad Ahmadinia told Iran International that Iranian officials in sensitive positions are commonly banned from leaving the country after the end of their tenure or must get permission to do so. However, he said, the fact that the IRGC has taken extraordinary action in this case is significant.

The IRGC forced the Rouhani administration to give up the government monopoly on oil exports during US sanctions, Ahmadinia said, explaining that they went as far as confiscating tankers belonging to the oil ministry under the pretext of seizing "smuggled oil" to get control of the profitable illicit oil sales.

"This is part of settling accounts with officials who resisted surrendering oil and oil products exports to the IRGC which they eventually had to do … This is revenge … Otherwise information on circumvention of sanctions is no longer secret," he said.

In recent weeks, Iran’s hardliner dominated parliament at least twice decided to give oil to the Guards to “sell” and use the money for their projects.

Sanctions evasion

Iran devised various methods to circumvent international sanctions, first imposed in 2011 by the UN Security Council, by recruiting businessmen, officials and IRGC networks to clandestinely market the crude, often at a much higher cost to Iran. Such methods resulted in several major corruption schemes and misappropriation of billions of dollars in oil and petrochemical sales that came to light after the UN sanctions were removed.

Such methods were employed again after former US President Donald Trump pulled out of the 2015 nuclear deal, Joint Comprehensive Plan of Action (JCPOA) in 2018 and re-imposed sanctions on Iran.

Oil exports dropped to around 200,000 barrels per day in 2019, but in late 2020, Tehran increased its sales through illicit channels. China is the biggest buyer, with shipments disguised as exports from other countries.

Hardliners sell more oil

The Raisi administration and its political allies say his government has a far better record than his predecessor, Hassan Rouhani, in economic performance, including circumventing US sanctions. In a speech in January Raisi said oil exports had increased by 40 percent after he took office, and that Tehran pursued a dual-track policy of circumventing US sanctions and working for their removal.

In the case of some of the officials named in the list, including officials of the Persian Gulf Petrochemical Industries, the IRGC intelligence organization demanded that they be prevented from leaving Iran for involvement in corruption and bribery. The Persian Gulf Petrochemical Industries is a public holding company active in investment and administering natural-gas processing plants, chemical factories, oil and polymer. It is the second-largest petrochemical industries holding in the Middle East.

Other reasons offered by the IRGC intelligence for demanding such a ban also included affiliation of an official's brother to the exiled opposition group Mujahedin-e Khalq (MEK) and his family's residence in Spain.

An official of the oil ministry has also been accused of "multi-layered connections with infiltration networks" and the National Iranian American Council (NIAC), a lobbying NGO based in the US.

According to a report published by Haaretz on Tuesday, six Israeli drones struck the base in Mahidasht region near the western city of Kermanshah in a covert operation that may be the motive for Tehran's Sunday missile attack on Erbil, along with the recent airstrike near Damascus that killed two IRGC officers.

The report said the mid-February attack caused major damage to the Islamic Republic’s drone fleet, with some estimates saying that hundreds were destroyed.

Until recently, neither country had gone public about years of covert drone war between the two archrivals.

Lebanese television station Al Mayadeen, with links to both Hezbollah and the Islamic Republic, reported the Israeli attack for the first time on Sunday, saying the bombing of the Kermanshah drone site prompted the retaliatory attack in Erbil, which claimed it targeted a secret Israeli intelligence base.

Press TV quoted the secretary general of pro-Iran Harakat Hezbollah al-Nujaba as saying that the Kurdistan region authorities “provide Mossad agents with refuge” which makes it allowable for any party to target the “Zionist spies.”

Some Iran-backed sources said the Erbil attack had several casualties but according to official reports no one was killed but the missiles damaged some residential buildings.

Hojjat Kermani expressed hope on Tuesday about her release within the next few days, saying, "I am hopeful that we will have good news soon”.

Negotiations over the release of the imprisoned charity worker who’s been detained by Iran since 2016 have seen progress, Kermani said.

UK MP Tulip Siddiq tweeted, “Nazanin Zaghari-Ratcliffe has been given her British passport back.” “She is still at her family home in Tehran. I also understand that there is a British negotiating team in Tehran right now,” she added.

The news can be seen as a sign that prisoner swap negotiations underway in parallel with the Vienna nuclear talks with Iran might have moved in the right direction.

Iran's foreign ministry spokesman Saeed Khatibzadeh said in February that a prisoner swap was on the agenda in parallel with the nuclear talks.

Britain is also understood to have agreed to repay a £400 million debt it owes Iran relating to an abortive deal to export British armaments in the 1970s.

Iran is holding several Western prisoners in what human rights organizations have dubbed hostage diplomacy, accusing the Islamic Republic of holding dual-nationals as bargaining chips for money or leverage in negotiations with the West, something Tehran denies.

Zaghari-Ratcliffe served five years in prison after being taken into custody at Tehran's airport in April 2016 and convicted of plotting the overthrow Iran’s government, a charge that she, her supporters and rights groups deny.