Air Pollution Crisis Worsens As Iranian Winter Bites

In a meeting with Syrian Prime Minister Hussein Arnous in Damascus on Wednesday, Mohammad-Reza Farzin made the announcement as both nations grapple with severe economic challenges.

Iran, facing a persistent financial downturn since 2018 due to US sanctions following its withdrawal from the JCPOA nuclear accord, has sought avenues to strengthen economic ties with Syria, which is in the throes of years of political and economic uncertainty and war.

Farzin also expressed Iran's intention to remove the dollar from economic and trade transactions between the two countries in the coming years.

Iran has been a significant financial supporter of Syria, spending tens of billions of dollars, a substantial portion of its constrained oil revenues, to sustain President Bashar al-Assad's regime. Estimates suggest that Iran has provided between $30 billion to over $50 billion in material aid to the government since 2011, a period during which Iran's annual oil revenues averaged between $20 billion to $40 billion.

Despite a decade-long effort to preserve the Syrian government, Iran holds a relatively small share of Syria's trade and has lost out to financially stronger players. The Revolutionary Guard, justifying its extensive involvement in the Syrian war, contends that trade and investment in Syria will eventually yield returns, compensating for the substantial financial and human costs Tehran has incurred to support the Assad regime, but so far it has not come true.

The UN report published on November 5 suggests that the Taliban's ban on drugs in Afghanistan led to a significant drop in opium poppy cultivation while data from the body last year suggested Afghan farmers' income tripled. 

Amir Abbas Lotfi, the Director General of the International Relations Office of the Drug Control Headquarters in Iran, contradicted the UN findings, stating that not only did Afghanistan decrease opium production, but it also expanded the production of psychotropic substances despite the ban imposed by the Taliban.

Lotfi pointed to another UN report from last year, highlighting that the income of Afghan farmers had tripled suddenly, reaching over $4 billion.

"Traditional drug trafficking, such as opium and psychotropic substances, from Afghanistan to Iran is still occurring," he said.

Iran, often recognized as a significant global conduit for drug trafficking to European markets, is allegedly implicated in these activities, with accusations of involvement by the Islamic Revolutionary Guard Corps (IRGC). Reports from Western and regional intelligence agencies suggest that the Islamic Republic, along with its paramilitary partners, plays a notable role in drug trafficking networks operating in the Middle East and the West.

Investigations indicate a notable increase in the transfer of large narcotics shipments from Iran to Arab countries, Southeast Asia, and Europe. However, Iranian authorities place the blame on Western governments.

According to the annual tax law, properties exceeding 400,000 USD value face a two per thousand tax on the excess value, with municipalities mandated to report property status to the Tax Affairs Organization.

Notably, residential units and villas under construction are exempt from this tax, and in cases of ownership transfer, the luxury home tax responsibility falls on the original owner starting from the Iranian New Year on March 21.

The government claims the objective in taxing vacant luxury homes is to discourage owners, not dependent on them for income, from keeping these properties empty to demand rents or sale prices higher than market values.

However, the move has sparked criticism, with some attributing it to the government's financial constraints due to sanctions and low oil revenues. Critics argue that the government is resorting to extracting more money from citizens, as they face a large budget deficit.

The amount of the Iranian government debts has increased about 900-fold over the past decade to $60 billion. This would be as much as 850 million barrels, or two years’ worth of oil exports at normal market prices.

Iran's economy, where 80% is directly or indirectly controlled by the government or semi-official entities, has faced challenges despite a privatization drive initiated 15 years ago. The effort has, in some cases, resulted in the creation of quasi-governmental firms controlled by influential figures, limiting competition and relying on public funds to sustain operations.

Despite initial containment efforts, the situation escalated on Monday morning due to strong gusts of warm wind, rekindling the flames.

Reports indicate that since Friday morning, three locations in the Mazandaran province, specifically in the cities of Tonekabon, Noshahr, and Savadkouh, have been impacted by the wildfires.

Meteorological forecasts warn of continued warm wind gusts and rising temperatures on Tuesday and Wednesday, heightening the likelihood of fresh outbreaks in other parts of the Mazandaran forests in the coming days.

Mehrdad Khazaipoul, the Director General of Natural Resources and Watershed Management of Mazandaran in Noshahr, identified the "negligence of illegal hunters and excavators in extinguishing the fire" as the primary cause of the wildfire.

Esmaeil Sadeghi Niyarki, the Chief Justice of Gilan province, reported on Monday about wildfires in the forests of the neighboring province. The fire, which started on Saturday afternoon in the protected forests of Shaft, has now spread across 11 counties, covering an extensive area of 53 hectares.

This isn't the first time the Hyrcanian forests have experienced such devastation. In December 2022, a wildfire engulfed 40 hectares of the ancient forests, emphasizing the persistent threat to the natural heritage.

The Hyrcanian forests, with a history dating back 40 million years, are among the world's most valuable. Designated as the second natural heritage of Iran on the UNESCO World Heritage List in July 2019, the forests house 90 species of trees.

Experts emphasize that the lack of modern firefighting equipment in the country's forests exacerbates the situation. Traditional tools like shovels, pickaxes, and fire beaters are often employed for firefighting efforts.

The galloping inflation report published by the Statistical Center of Iran (SCI), a government outfit, comes after warnings last week that a $14 billion government outlay for importing food and medicine next year will be insufficient to address needs.

In Iran’s closed economic system importers have no direct access to foreign currencies and can only receive US dollars or euros from the government. Local media have pointed out that $14 billion proposed in next year’s budget for food and medicine would only be enough for importing essential food such as grains and protein sources but cannot also pay for medicine.

According to the SCI report, other food items also experienced serious inflation. Prices of fish increased by 72 percent compared with prices in October-November 2022. Overall, the point-to-point inflation rate for a basket of essential daily needs was almost 40 percent.

Other recent reports have put the inflation rate at more than 50 percent. Also, overall inflation for retail food prices was reported to be 37 percent.

Despite higher oil exports this year, the Iranian government seems unable to lower inflation and its restrictive foreign currency policies continue. The national currency rial, still hovers around its all-time low of 500,000 per US dollar, a 12-fold fall in value since early 2018 when the United States withdrew from the JCPOA nuclear deal and imposed economic sanctions on Iran.

The exact amount of oil revenues is a state secret, but it is believed Iran is selling Cina around 1.1 million barrels of oil per day, with large discounts. Experts estimate that with the discount, and additional costs related to the illicit shipments of oil, Iran is probably receiving around $50 per barrel, which would mean $21 billion of income per year, hardly enough to finance the food imports and other needs. Other Iranian oil shipments to Venezuela or Syria hardly return any hard currency to Tehran’s coffers.

This is why next year’s draft budget bill presented to parliament has increased taxes to deal with persistent deficits.

The government has projected a 50-percent increase in taxes of various kind compared to the current budget. Total expected tax revenues will reach over 11,220 billion rials ($22.44 billion), Jahan-e-Sanat said. This would be equal or greater than the annual oil income.

The total government budget will reach 24,620 billion rials ($49.2 billion) next year, which shows an increase of 18.2 percent compared to this year’s budget, the report added. That is to say, the tax revenues will account for more than 45 percent of the Iranian government’s operating budget.

The inflation rate in Iran has stayed at or above 40 percent for at least three years, increasing political instability. After last year’s anti-government unrest, more economic protests are taking pace in recent weeks. Workers in different sectors and retires of state enterprises stage daily protests demanding higher pay, as millions of previously middle-class people are now considered poor. Next years budget, forecasts a 16-percent pay increase for workers, less than half of the current rate of inflation.