Promise To Build Millions Of Homes Unfulfilled As Iran’s Economy Worsens

While Conservative President Ebrahim Raisi took office last August, claiming to be able to quickly control inflation, price rises have accelerated in the past 8 months. Attempts by him and his supporters to blame his predecessor for the crisis increasingly sound hollow. Even many conservatives and regime loyalists have begun asking for solutions.

Prices for essential food itams such as sugar, oil, flour, bread and pasta have dramatically increased in the past few weeks.

"Last year, the average price for each kilogram of pulses was between 500,000 and 750,000 rials (or $2 to $3),” said Abdi Eftekhari, secretary of Iran’s Pulses Union. He put current prices 70 to 120 percent higher.

Eftekhari noted a rise in global inflation due mainly to the Russia-Ukraine conflict, given the two countries’ role as major exporters of agricultural produce, including wheat.

The head of the directing board of Iran’s Pasta Factories Association, Mehrdad Nouri, recently said that 70 percent of the cost of producing pasta depended on the cost of flour. Recent years, he explained, had seen a decline in Iran’s cultivation of durum wheat − also called pasta wheat or macaroni wheat − from which semolina flour is made, even though private producers have encouraged farmers by paying above the government-approved rate.

But the main reason for soaring prices is an economy in crisis, with ballooning liquidity, above 40-percent inflation, and a government unwilling to make a nuclear deal with the United States to lift criplling sanctions.

Hoarded vegetable oil

Abolhassan Khalili, chairman of Iran's Vegetable Oil Trade Union, has attributed the rising price of vegetable oil to both the Ukraine crisis and hoarding by producers and brokers expecting further price hikes. Raw vegetable oil, which is imported, has risen 60 percent due to the Ukraine crisis, Khalili said.

First vice-President Mohammad Mokhber said Monday that the government’s elimination of a lower dollar rate for essential food imports had led to price rises for some items, although there was “abundance of basic goods in the country.” He said prices had risen 70 percent globally, apparently referring to the Ukraine crisis. Officials have generally claimed Iran has adequate stores of sugar, oil and other necessities.

Consumer price inflation in Iran has been above 30 percent since the United States imposed ‘maximum pressure’ sanctions in 2018. But food prices have risen faster, with government figures showing 60 percent year-on-year inflation in 2021.

Rice price

In an interview with ILNA published Sunday, Shahriar Haydari, a member of the parliament's National Security and Foreign Policy Committee, claimed high inflation was not due to international factors but to a lack of integrated management. “The increase in the price of eggs, yogurt, buttermilk and meat has nothing to do with the United States and sanctions,” he said.

Prices for most essential goods are nominally fixed by the government, but the private sector often disregards the guidelines. In recent months, prices for rice, the main staple, have fluctuated widely, but are now 1,000,000 rials (about $4) per kilogram, enough for a meal for five to eight people. The average salary, according to the Ministry of Labor, is the equivalent of $150 a month.

Mohammad-Reza Mortazavi said on Monday that grain imports will include 6 to 7 million tons of wheat, as Iranian state media rejected rumors on Tuesday that bread prices will increase following the elimination of subsidies.

According to data by Iran’s Ports and Maritime Organization grain imports stood at 16.5 million tons last year, about half of which was wheat while the rest were barley, corn and rice.

Referring to a five-fold increase in flour prices by the Agriculture Ministry, was expected, but “it would be better if the government first examined its effect on prices of other commodities”. Pasta prices officially increased as much as threefold on Monday.

He added that most of the country's wheat imports this year will come from “Russia or the Baltic states and even Europe”, highlighting that the Russian invasion of Ukraine has led to a global rise in wheat prices as well as almost all other agricultural produce. Ukraine and Russia account for more than a quarter of global wheat exports and nearly a fifth of corn.

In March, Nour News, affiliated with the secretary of Iran's Supreme National Security Council (SNSC), Ali Shamkhani, reported that Iran has signed a deal with Russia to import 20 million tons of basic goods, including vegetable oil, wheat, barley and corn.

The office of Supreme Leader Ali Khamenei and other Iranian grand ayatollahs on Sunday evening said the crescent moon had not been sighted so the first of the month of Shawwal, the tent month in the Islamic lunar calendar, and the Eid would fall on Tuesday.

The Islamic month of Ramadan, therefore, became thirty days in Iran this year and twenty-nine days in other Islamic calendars. In Iran the lunar Islamic calendar is used only for religious purposes while the official calendar is an accurate solar one. Differences in the length of the month of Ramadan in Islamic countries can cause confusion.

On several occasions in the past, as in 2013 and 2020, there has been disagreement among Iran's grand ayatollahs, also called marja (source of emulation) over the sighting of the new moon with followers of each grand ayatollah holding separate Eid prayers.

The difference in marjas’ verdicts reflects their notions for "viewing the new moon". Some marjas require the crescent of the new moon to be seen with naked eye while others including Khamenei allow the use of instruments such as telescopes.

Secular Iranians, and some devout Muslims with more progressive views, often criticize traditional leaders for insisting to see the crescent when science can easily and precisely show the position of the cycle of the moon in the sky.

Khamenei appointed a special body called the "Moon-Sighting Taskforce" after taking office. The taskforce is responsible for stationing "trusted observers" across the country on the final days of Ramadan to report the sighting of the new moon to him. The taskforce receives a budget from the government for its work.

Khamenei's declaration of the viewing of the new moon, and its acceptance by other grand ayatollahs, is politically and religiously significant as it is considered as evidence of his position as the supreme authority among all Iranian marjas.

Iran's devout Shiites are free to choose which marja to follow in religious matters but not to make a public show of their marja's difference of opinion with Khamenei by holding prayer congregations other than those held by the state.

On the day of Eid, Khamenei usually leads the prayers in Tehran and delivers one of his most significant sermons of the year. In recent years the authorities have insisted that Eid prayers be held throughout the country on the day designated by Khamenei.

Two years ago, Khamenei's office announced the sighting of the new moon and a public holiday but two high-ranking marjas – Ayatollah Naser Makarem Shirazi and Ayatollah Hossein Vahid Khorasani – held on for a few hours before changing their minds and following Khamenei's lead.

Iran's Arab neighbors including Saudi Arabia, Kuwait, Qatar, the United Arab Emirates, and Iraq which unlike the others has a majority Shiite population, all celebrated the Eid al-Fitr on Monday. Iraq's Grand Ayatollah Ali Sistani, however, has also declared Tuesday as Eid. The Sunni Taliban in Iran's east said Saturday evening that they had sighted the crescent moon so the Eid fell on Sunday.

According to an undeclared law, authorities expect not only Shiite leaders, but also the religious leaders of the minority Sunnis to follow Khamenei's lead about the declaration of Eid. This year, as in several instances before when the Eid was celebrated on different days in Shiite Iran and Sunni countries, the Sunni imam of Zahedan in south-eastern Iran, Molavi Abdolhamid, held his Eid prayers on Monday in tandem with other Sunni countries.

Hassan Shojaee Aliabadi the chairman of the Article 90 Committee of the Majles told Mehr news agency on Saturday, May 30, that people have repeatedly called on the committee to make sure that Rouhani would be put on trial as soon as possible. Article 90 was established many years ago to hear complaints from citizens.

The moderate news website Rouydad24 wrote: "This comes while the same parliament believes that the people's views are not important about other matters including their opposition to a bill that calls for restricting the access to social media."

The report pointed out that Lawmaker Morteza Aqa-Tehrani, a member of the ultraconservative Paydari Party has said: "Even a million signatures on a petition cannot stop the bill to restrict Internet access."

The campaign to put Rouhani on trial "as the man responsible for the country's economic problems" was launched during his presidency after former Central Bank Governor Valiollah Seif (pronounced Sayf) was sentenced to 10 years in jail on charges of manipulating the foreign exchange market. The verdict against Seif was later revoked, but the call to put Rouhani on trial continued with new accusations. Members of the current hardliner parliament have charged that Rouhani's "inefficiency" led to major economic problems for Iran.

The new calls for Rouhani's trial come as the country's economic problems have seriously worsened during the 10 months conservative Ebrahim Raisi has been president. The move could be his supporters' plan to blame Rouhani for the problems Raisi and his economic team have not been able to solve.

Another aspect of the issue is Iran’s stalled nuclear talks with the United States and continuing sanctions. The only person in Iran who can authorize a new agreement is Supreme Leader Ali Khamenei, whom many see as the one who is ultimately responsible for the economic crisis and inflation topping 40 percent.

During the past months nearly all prices in Iran have redoubled while Raisi ands his government have failed to control inflation. Iranian journalist Ebrahim Alizade, who is the editor of Tejarat News website, wrote in a 29 April Tweet: "Today, on the same day that President Ebrahim Raisi reassured the nation that he is constantly thinking of controlling the markets…prices of meat and car parts have gone up and the price of detergents is going to increase next week."

Despite rising prices, the Raisi administration has been constantly blaming the former government rather than trying to offer a solution. That is why economic observers believe Raisi's hardliner supporters are buying time by pursuing the idea of putting Rouhani on trial. However, even some of Raisi’s supporters criticize the government for blaming its predecessors.

Moreover, there is no indication that Article 90 Committee chairman’s remarks are true. A few days ago, some government officials were adamant that legal action has been taken against former vice president Es'haq Jahangiri, former Oil Minister Bijan Zanganeh and former Housing Minister Abbas Akhundi for being responsible for the economic crisis. But it was soon revealed that the claim was false.

There has been talk of a debate between Raisi and Rouhani about the state of the economy.

Rouhani is not likely to agree to take part in any debate with Raisi, but if such a debate ever takes place, he proved during the 2017 election campaigns as Raisi's rival that he is capable on unabashedly attacking Raisi and leaving him speechless, particularly as Rouhani is an intrepid speaker while Raisi can is prone to make blunders.

In an interview with ILNA published on Sunday, Shahriar Haydari, a member of the parliament's National Security and Foreign Policy Committee, said economic problems and high inflation are not related to foreign countries, but are due to a lack of integrated management system.

He added the increase in the price of eggs, yogurt, buttermilk and meat has nothing to do with the United States and sanctions, noting that the current situation in the country and the effects of sanctions are two separate issues.

“To say that sanctions are ineffective in some respects may be wrong, but the current state of economic turmoil, high inflation, disorganized resource management indicates a management completely in disarray”, Haydari said.

Further criticizing the management of resources, he said, “One of the main problems of our country is the lack of resource management, not the lack of resources, because we have a lot of resources, but we do not have proper management”.

Food prices are rising in Iran with retailers saying supplies have decreased, while officials insist there is plenty of stored sugar, oil and other necessities.

Prices for most essential goods are nominally fixed by the government, but the private sector often disregards the guidelines based on supply and demand. Many complain to the media that merchants inflate prices perhaps with the help of government bureaucrats and politicians.