In the first two hours of trading on May 8th, the overall index of the Tehran Stock Exchange dropped 122,000 units to reach 2,317,000 units, experiencing its biggest decline in the 56-year history of the stock market.
Meanwhile, market experts cannot find a fundamental reason or explanation for this heavy fall, as 92 percent of the stock indexes showed a nosedive.
According to Iranian law, if the overall index of the stock market drops by more than five percent, trades on that day may be considered null and void. With the index dropping more than five percent on Monday and approximately 3.7 percent on Sunday, there are whispers of trade in the Tehran Stock Exchange being cancelled.
According to reports from the stock market, in only 20 minutes of the first trading on Monday, the total stock market index dropped 80,000 units and fell below the 2,400,000 mark.
Due to “emotional sentiment” overtaking the market, “shareholders are only thinking of an escape route” and that on Tuesday alone, “306.55 trillion rials” (approximately $67.68 million) exited the stock market, according to a report by the Tejarat News website, an economy-focused outlet.
Siamak Ghasemi, an economist, has called the administration of regime President Ebrahim Raisi the “most extreme” cabinet. In a tweet he referred to “the fastest drop in the rial/U.S. dollar exchange rate, the highest growth in liquidity, the highest historical inflation rate, and the largest historical fall of the stock market in a day”. “Iran’s economy is out of balance both in boom and in bust, and this imbalance has no economic solution, and everything is dependent on political decisions,” Ghasemi added.
Some analysts have said that incorrect management methods in the past and “market manipulation” have led to Iran experiencing “one of the worst performances in history” in its stock market.
According to Iran’s semi-official Borna news agency, the decline in the stock prices of heavy-weight shares in the second half of the trading day on Monday, due to the release of companies’ six-month financial statements, had a negative impact on the overall index.
The report also adds that various experts believe that the value of some companies’ shares on the stock exchange does not match their assets.
The relative decline in foreign exchange rates against the Iranian rial in the country’s free markets over the past week may also be another factor contributing to the decline in the overall index of the stock market.
Since last fall, the stock market index, already experiencing a downward trend, began to grow again. The total index rose from 1.27 million units in November to 2.5 million units this past Saturday.
Raisi’s administration and officials from the stock market have yet to explain what has happened in the past five months that led to the overall index of the stock market doubling.
Biggest decline in the stock market
The Tehran stock market had previously witnessed an unprecedented fall that began in early August 2020. The overall index was around 508,000 units on March 24, 2020, and passed the two-million-unit threshold on August 9, setting a historic record. However, it later entered a downward trend, and on March 18, 2021, the overall index of the market reached the level of 1.307 million units. The biggest nosedive in the stock market up to that time occurred on Monday, October 19, with a drop of 51,000 units, becoming known as Black Monday. In that year, the head of Securities and Exchange Organization changed three times.
According to some experts, what caused the stock market crash in 2020-2021 was the regime’s policy makers intervening in the trading mechanisms and turning it into an informal market. A similar chronology has been witnessed during the recent stock market decline.
“The problem with the Iranian market is systematic. When the overall economy is in crisis, the capital market will not be immune to it,” said Hamid Mir-Moeini, an economic expert, in remarks with Iran’s state media.
Iranian dissidents seized control of 210 websites, software applications, servers, data banks, and other aspects of the regime’s Ministry of Foreign Affairs (MFA) on Sunday, May 7.
The front pages of these websites and software apps, associated with the Iranian regime’s Foreign Ministry and their embassies worldwide, were defaced and replaced with images of the Iranian Resistance leadership and slogans calling for the regime’s overthrow.
Reports suggest that the MFA’s servers and main data banks in Tehran were destroyed, with tens of thousands of documents confiscated by the Ghiam ta Sarnegouni (“Uprising Until Regime Overthrow”) group. The dissidents were also able to take control of the MFA’s main software applications and internal coordination programs, including apps managing news and reports, visas, appointments and referrals, personnel, salaries, and other branches.
In an audio file leaked in 2020, former Iranian regime foreign minister Mohammad Javad Zarif revealed that the MFA has been involved in security affairs since its inception, with orders and instructions focused on political-security matters.
The regime’s embassies are known for providing diplomatic cover for the regime’s diplomat terrorists, such as Assadollah Assadi, who was involved in a plot to bomb a massive rally of the Iranian opposition coalition NCRI back in 2018.
This group has also disclosed documents regarding the Ministry of Foreign Affairs’ actions to bring back Assadi to Iran. Assadi was tried in a Belgium court and sentenced to 20 years in prison for his leading role in the foiled bombing plot. Documents from the MFA show that Iranian authorities have attempted to negotiate a prisoner exchange agreement with Belgium, held dozens of meetings with officials from European countries, and taken media actions, among other measures.
This group has also released documents from meetings between the regime’s Ministry of Intelligence and Security (MOIS) and the Ministry of Foreign Affairs regarding the Assadi case.
The Ministry of Foreign Affairs document states that the case of Assadollah Assadi fell within the duties of the Ministry of Intelligence, and that “all relevant movements and activities” were managed and directed by the MOIS after his arrest.
The Ministry of Foreign Affairs also reported that the committee formed in this regard sent several reports to the Office of the Supreme Leader Ali Khamenei and the regime’s Supreme National Security Council.
In this document, the Ministry of Foreign Affairs has presented a report on its actions to conclude an agreement on the transfer of convicts between Iran and Belgium and has announced dozens of meetings with German and Belgian officials in this case.
Part of the 50 terabytes of documents obtained by Ghiam ta Sarnegouni includes meetings and measures by the Ministry of Foreign Affairs regarding the case of Asadollah Assadi.
In the documents, the authorities stress that Assadi’s case “has been a very high priority in the followup agenda of the Ministry of Foreign Affairs and regional offices from the beginning.”
They also make it clear that Assadi’s case “is within the scope of the duties and responsibilities of the Ministry of Intelligence of the Islamic Republic of Iran.” The MOIS has been involved in all the stages of the process. “The Ministry of Foreign Affairs, along with the Ministry of Intelligence, has used all its capacities to consult and help manage the issue of Mr. Assadi,” one document says.
The documents also show that the regime is involved in hiring lawyers in Germany and Belgium to follow the case in both countries. Their follow-up items also include “Being on the agenda to pursue the conclusion of the agreement on the transfer of prisoners between the Islamic Republic of Iran and the Kingdom of Belgium.”
According to the DeMorgen news website, the cabinet of Justice Minister Vincent Van Quickenborne has confirmed that discussions with Iran were already underway before the regime arrested Olivier Vandecasteele, a Belgian humanitarian aid worker. The regime later used Vandecasteele as a bargaining chip to swap him with Assadi. The formal agreement with Iran was finalized on March 11, 2022.
On February 24, 2022, Vandecasteele was apprehended in Iran and subsequently subjected to a mock trial, resulting in a harsh sentence of 40 years in prison, 74 lashes, and a $1 million fine. The revealed documents indicated that the agreement had been specifically designed for Assadi, implicating Vandecasteele as a hostage the regime needed.
The regime ruling Iran has recently approved the high priority “Tax on Repeat Housing Transactions” bill. The legislation has been submitted to the Majlis (parliament) to be administered into the country’s laws.
If passed, this bill will allow the government to impose a 60 percent tax on property sale if the owner sells the property within one year of purchasing it.
The goal of implementing this plan is to prevent “profit-seeking activities” in the housing market and to prevent the upward trend of housing prices. However, real estate experts say that this plan, like other restrictive measures approved by the government to prevent rising housing prices, will not yield any results. The reason is that the housing industry acts as a capital commodity in the Iranian economy, and its price follows the inflation rate in Iran, exchange rate fluctuations, and building materials. The price of housing also rises simultaneously with the growth of these markets.
Previously, the government of Hassan Rouhani approved a tax plan on vacant homes. After the plan was approved into law, however, it ultimately became entangled in complicated implementation processes.
Slow growth of housing prices
The latest statistics from January 2023 indicate that the average price per square meter of housing in Tehran is around 550 million rials per square meter (approximately $1,018), which indicates a 54 percent inflation rate. However, housing prices saw yet another hike coinciding with the increase in the dollar exchange rate.
Although there is no official and accurate data available to determine the exact rise in housing prices in the Iranian capital over the past year, websites that advertise property prices across the country can be consulted to realize the changes in the housing market.
Unofficial reports suggest that the average price of housing in Tehran reached around 700 million rials (approximately $1,296) per square meter by April 2023.
According to unofficial reports, the rise in housing prices from January to April in some areas of Tehran was 35 percent. This increase shows the inflation of the housing sector in Tehran for 2022 equaling 60 percent compared to these three months in 2023.
The wave of rising housing prices has also reached other cities in Iran and has brought the housing inflation rate to around 50 percent nationwide.
This is Iran’s fourth wave of housing price hikes in the past ten years. According to official reports, housing prices have increased 1,200-fold over the past 30 years.
When Ebrahim Raisi assumed office as president in 2021, the average price per square meter of residential units in the capital was around 310 million rials (approximately $574). In January 2023, the latest statistics reported by the regime’s Statistical Center show the calculated price per square meter of housing in Tehran at around 550 million rials (approximately $1,018), an increase of about 70 percent over 18 months.
Hollow promises
At the beginning of his tenure, Raisi promised to build four million residential units in his four-year tenure. A few months later, when Rostam Qasemi took over the Ministry of Roads and Urban Development, he hinted that the pledge to build four million homes was impossible.
Now, more than a year later and after the first prepayments have been collected from the registrants, there is no official completion time for the construction projects and no longer any talk of building a million homes annually.
Even Mehrdad Bazrpash, who replaced Rostam Qasemi as the Minister of Roads and Urban Development, began his post by referring to the government’s inability to provide 28,000 trillion rials (approximately $52 billion) for the construction of four million homes.
To implement this plan, the government placed heavy pressure on banks, which are already burdened with the obligations of other government orders, to provide low-interest loans. On the other hand, due to the rise in inflation, the fully completed price per square meter does not match what was promised.
wave of housing price hikes
Since the start of this initiative, Iran’s inflation rate has put pressure on the National Housing Plan, as the prices of building materials have also increased with inflation and the government’s calculations for affordable housing have been stuck in a deadlock.
Mojtaba Yousefi, a member of the Majlis Civil Commission, said that on average 51 percent of the country’s population are tenants.
On April 9, referring to the rising housing prices and rents, Yousefi told the semi-official ILNA news agency that the economy, especially the branch related to the minimum expenditure basket, cannot be controlled through directives and orders.
According to the data of the Statistics Center, in 2011 housing costs consisted of 34 percent of an average household budget, rising to 39 percent in 2017. This figure reached 47 percent in 2020.
According to social media ads, housing prices in northern Tehran have reached over 10 billion rials (approximately $18,520) per square meter in some areas.
In this regard, a February 24 report published by the semi-official Khabar Online website indicates that a full-mortgage 200-square-meter house in the Elahieh neighborhood of Tehran stands at 40 billion rials (approximately $74,000). Additionally, a social media post shows an advertisement for a 470 square meter house in Tehran’s Zaferanieh neighborhood with a price tag of 6.5 trillion rials, meaning over 10.3 billion rials (approximately $24,000) per square meter.
On May 9, the regime’s Sobhe-No newspaper wrote that in the Niavaran area rent costs are at $20,000 deposit and $3,000 monthly rates.
An Iranian economic reporter posted on Twitter: “For the first time in history, buyers are more than ten times the sellers [of land]. With these economic circumstances, everyone is looking to convert their rials into any other commodity. With none of the policies being implemented, including monitoring rental rates and taxing vacant homes, speculators are at ease.”
The sharp increase in housing prices in Tehran has led to an increase in rental and mortgage prices as well.
Sajjad Paddam, Director General of Social Insurance at Iran’s Ministry of Cooperatives, Labor, and Social Welfare, raised the possibility of selling Kish and Qeshm islands to provide for the pensions of the country’s retirees. Whether these remarks were made intentionally or unintentionally is anyone’s guess. However, this does shed light on another aspect of the plans currently under review by regime Supreme Leader Ali Khamenei.
“We sacrificed 300,000 martyrs (during the 1980s Iran-Iraq war) so that we wouldn’t lose an inch of our land. However, we may reach a point where we have to sell Kish, Qeshm, and even Khuzestan province to pay for the retirees’ pensions,” Paddam said.
Throughout Iran’s history, the people have been victim to numerous betrayals and wrong policies by the country’s rulers. However, everyone thought that those days were long gone, and we would not be witness to such developments in this era. The current regime ruling Iran, however, has crossed many lines in the past four decades, proving that it knows no boundaries in plundering the Iranian people and embezzlement.
The statement made by Paddam about the possibility of selling Kish and Qeshm islands to provide for retiree pensions has sparked controversy and criticism in Iran. Many Iranians see this as a clear sign of the government’s inability to manage the country’s finances and meet its obligations to its citizens.
Moreover, the sale of Kish and Qeshm islands is a sensitive issue in Iran. Kish Island is a popular tourist destination and a free trade zone, while Qeshm Island is a strategic location in the Persian Gulf and home to a large number of Iranian military bases.
Furthermore, the statement has been seen as a reflection of the broader economic crisis in Iran, which has been exacerbated by years of mismanagement and corruption. Iran’s economy has been struggling with high inflation, unemployment, and a currency crisis.
Kish Island in southern IranIran’s history of incompetent governments
When Iran’s new generation studies their history, they feel regret and sorrow for the auctioning off of the country’s lands that they love.
It has always been incompetent and selfish governments that have either sold a portion of the country for a small price or handed over parts of Iran to foreigners to maintain their power and position. Every Iranian is familiar with such shameful treaties that saw Iran losing large swathes of its lands: Golestan, Turkmenchay, 1919, Paris, Saadabad, the separation of the Mount Ararat…. However, it is so bitter and unpleasant for them that they rarely talk about it.
The Pahlavi dynasty mocked the Qajar dynasty for giving Azerbaijan and Armenia to Russia. Beneath the fake cries of nationalism, however, Shah Reza Pahlavi gave away Mount Ararat to Turkey, Kurdish villages and part of Arvand Rud to Iraq, and surrendered Firuzkuh in northern Khorasan to the then Soviet Union.
Despite praising his unified army for years, Reza Shah’s military could not withstand an attack by British forces during World War for even an hour. Russian and British forces occupied all of Iran without any resistance, reached the center of Tehran, and forced Reza Shah—who had pledged his alliance to Hitler—into exile.
His son, Mohammad Reza Pahlavi, also engaged in selling parts of Iran and bestowed various concessions to other countries to strengthen his hold on power. To cover up this disgrace, he boasted: “I took three islands in exchange!” Now, under the shadow of the mullahs’ rule, this bitter tale is not just relegated to the past.
Selling the homeland again
The legal status of the Caspian Sea and Tehran’s embarrassing retreat from the right to classify the Caspian Sea was so questionable that even the representative of the Russian Foreign Ministry was surprised about it.
What was Khamenei’s goal with this blatant selling of the country? To obtain Russia’s support in international politics, especially to guarantee support and veto power for the regime’s nuclear program in the United Nations Security Council. However, the “selling” of the Caspian Sea was not the end of this shameful policy.
The signing a 25-year agreement with China and discussions related to the Persian Gulf showed that the regime is selling the country to obtain “Eastern and Western” support. Regime officials have never been transparent when it comes to this agreement. And it is not clear how far they have gone and how much of Iran’s water and lands they have sold to foreign countries to gain political support.
The posting of foreign flags raised in various parts of Iran, occasionally seen on social media, are immediately denied by state media. However, these may actually be signs of the very concessions that the mullahs’ regime is busy providing.
What is the main problem?
The nature of the mullahs’ regime has its roots in medieval thinking, which is why it will never be able to adapt to the modern era. This is a general rule that applies to all economic, political, and social fields. Therefore, all of its patterns of relations with the outside world are derived from the same reactionary and backward thinking.
As a result, on the one hand, the regime has to show its stability by resorting to forceful repression and execution. On the other hand, Tehran takes the fastest and most direct methods possible. This means methods such as selling off national assets and wealth.
In foreign policy, every shameful act is taken to balance the shaky rule and maintain the mullahs’ control, even if only for a short period.
For such a government, talking about “the future,” “the wealth of future generations,” and “patriotism” is meaningless.
Just as regime founder Ruhollah Khomeini pursued a long and devastating war with Iraq; just as the regime stood firm to continue the war even after Iraqi forces withdrew behind international borders; just as the Revolutionary Guards sold Iran’s water, lands, forests, and mines; and just as Chinese fishing boats are now busy bottom trawling the Persian Gulf and taking away nearly all living creatures; the plundering of people’s money in various financial systems, funds, and banks in the country has become so pervasive that regime officials shed light on the possible sale of Iranian islands.
The question here is whether these islands have already been sold, like other national assets and their public digestion has already begun.
Every day, families of the disadvantaged workers across Iran are taken aback by shocking news about incidents that involves their loved ones losing their lives, getting injured or being disabled. A few recent examples:
April 27, 2023: A construction worker from Mahabad named Mohammad-Amin Ashna died in an accident due to the lack of safety measures at a site in Bandar Abbas.
April 18, 2023: While climbing from a metal scaffolding of a building, a 22-year-old construction worker in Karaj fell from down due to lack of safety equipment and passed away.
April 18, 2023: A worker died in the city of Saddeh, Isfahan province.
Also on April 18: A worker in Ilam, western Iran, died after falling from height while working. The CEO of Ilam Municipality’s fire department and safety services told the official IRNA news agency: “The owner of this building did not provide any protection for the floors of this complex and the elevator shaft did not have any protection either.”
March 28, 2023: three workers employed at a box production factory located in the industrial town of Babol, northern Iran, lost their lives in a gas explosion.
These incidents profoundly affect the families of the victims, as it deprives them not only of the love and care, but also of the breadwinners of the households. Sometimes such incidents lead to entire families falling apart and the avalanche of social tragedy continues down like in a domino effect at the cost of the fate of so many.
For years, the regime in Iran has failed to provide accurate statistics on occupational accidents. In 2016, Masoud Ghali Pasha, Head of forensic medicine in Tehran, stated that in the first six months of that year, 2,170 people lost their lives due to work-related accidents, and 154,000 people were injured while working at their job.
Ali Hossein Ra’yaitifard, the deputy Ministry of Labor, claimed that 800 workers die every year due to work-related accidents in the country. He also stated that 13,000 workers have suffered from limb amputations and severe injuries.
However, data on work-related accidents, provided by the director of the clinical examination office of the Forensic Medicine Organization show that “the number of people who referred to the forensic medicine in 2021 due to accidents caused by work was close to 28,000 cases.
Other statistics suggest the deaths of 1,500 workers per year due to accidents at work, although the number of deaths due to occupational diseases is eight times that number.
According to the head of Motahari Hospital in Tehran, across Iran, about 300,000 people suffer from burns every year and about 100,000 of them are workers. This happens while almost all people who happen to expose themselves to dangerous work, especially workers, have severe financial problems and cannot afford the initial treatment costs, let alone the costly medical care of a special hospital for burn accidents.
The actual stats are far from the officially announced date, but still, under the rule of the mullahs, Iran holds the world record in terms of labor accidents.
Most labor accidents occur in the construction sector where many workers are uninsured. Nonetheless, labor accidents for uninsured workers are not recorded at all and workshops with less than 10 workers are not covered by the labor law and therefore accidents in these workshops are not included in official reports.
Globally, lack of training, lack of supervision, poor safety measures and health equipment are considered important factors of work accidents. But in Iran, another important factor is involved in creating labor accidents, and that is the low level of wages.
Workers have to work more hours nonstop, sometimes several shifts, to earn enough money to compensate for the soaring prices of basic food items coupled with the never-ending upward trend of inflation. Therefore, instead of eight hours a day, the worker has to work between 15 and 18 hours which leads to fatigue and lack of concentration increases the individual’s vulnerability to human error that can turn deadly for the victim and the affected environment.
Also, unemployment and job insecurity has forced many workers to engage in any dangerous activity and people risk their lives by working with equipment or in places without appropriate safety measures.
More than 90% of the contracts of temporary workers don’t include clauses to protect the worker. This causes constant concern and stress among workers who, in fear of being fired, must submit to hard and unsafe work in workshops and factories without safety standards.
In addition to human losses, according to the International Labor Organization, in Iran, work accidents cost over $8.5 billion every year. But for the regime, neither the lives of workers nor the economic costs imposed are of any importance.
According to an ILO report, investing in prevention, safety and occupational health in economic enterprises will preserve the life and health of workers, as it does increase the return of investment by the rising job safety and work ethic.
Iran’s Islamic Revolutionary Guards Corps (IRGC) seized control of a Panama-flagged oil tanker in the Strait of Hormuz that was transferring cargo from Dubai to Fujairah port in the UAE.
According to the US Navy’s 5th Fleet, which is based in the Middle East, identified the vessel as the “Niovi,” and released footage showing a dozen IRGC vessels surrounding the tanker.
Those ships “forced the oil tanker to reverse course and head toward Iranian territorial waters off the coast of Bandar Abbas, Iran,” the Navy said.
“Iran’s actions are contrary to international law and disruptive to regional security and stability,” the 5th Fleet said in a statement. “Iran’s continued harassment of vessels and interference with navigational rights in regional waters are unwarranted, irresponsible and a present threat to maritime security and the global economy.”
No statement has been issued by officials from the Iranian regime regarding this matter.
At least one-third of the world’s shipped oil pass through the Persian Gulf, making this route vital to global trade.
Ambrey, a maritime security firm, said the latest seizure came after Greek officials warned that Greek vessels were at increasing risk from Iran after the US detained the oil tanker carrying Iranian oil under Greek management last month. Six days ago, Iran’s navy seized a Marshall Islands-flagged oil tanker in the Gulf of Oman. This waterway is a border between the Arabian Peninsula and Iran.
The Tanker Tracker said that the seized tanker, named “Advantage Sweet”, was transported to Bandar Abbas, a major portal city in southern Iran.
Iran has responded to previous oil seizures with all tools at its disposal. Video footage released by the US Fifth Fleet shows at least 11 small boats approaching the “Niovi” tanker on Thursday.
The semi-official Tasnim News Agency, associated to Iran’s IRGC Quds Force, reported the seizure of a “violating” vessel but did not specify the reason for the seizure.
The US Navy has accused Iran of harassing or attacking 15 commercial ships with international flags in the past two years, calling their actions a “violation of international law and a threat to regional security and stability.”
Last week, Western countries intensified sanctions against IRGC. In response, the Iranian regime announced reciprocal measures, including financial sanctions and a ban on the entry of individuals and entities from the European Union and the United Kingdom.
In July 2019, the IRGC seized the British-flagged tanker “Stena Impero” in the same waterway on charges of hitting a fishing boat, only to release the tanker two months later. In 2021, Iran released a South Korean oil tanker that had been held for months over a dispute involving billions of dollars. Last May, Iran also seized two Greek oil tankers.
The Iranian regime’s aggressive behavior is happening as Tehran has been sending signals of aiming for détente with its neighbors. The regime is also at odds with the international community over its nuclear program, with negotiations stuck in a deadlock for two years.
With a quick look at the mere 27-percent increase in the salaries of Iran’s workers in the new Persian calendar year (starting on March 21) and the country’s 50-percent inflation rate, we realize that Iranian workers will become even poorer during the year ahead.
The cabinet of Iranian regime President Ebrahim Raisi has supposedly taken measures to prevent anticipated inflation. But the trend of rising prices of basic goods and services since March 21st shows that anticipated inflation is only one of the factors contributing to the increase in the actual inflation rate.
Since last week, the currency exchange rate in Iran’s free market has begun to increase once again, and the U.S. dollar is gradually crossing 550,000 rials mark. This increase is another signal to the economy that prices are rising regardless of government decisions, and as a result, the 27 percent increase in workers’ salaries in the early months of the new Persian year has lost its usefulness.
In Iran, the standard annual salary for a worker is decided in February. This is determined by the so-called “Salary Committee,” composed of representatives of workers, their employers, and the government. This committee determined a 57 percent wage increase for the year 2022-2023. However, the inflation rate has increased at an even faster pace, rendering the wage increase meaningless.
Labor representatives in Iran say that this year’s decision by the Salary Committee does not even cover even half of last year’s inflation rate and this year’s inflation rate. This means that household incomes across Iran will be impacted by inflation. As long as household incomes do not increase by the same rate as the increase in the prices of basic goods and services, the purchasing power of households or their real income, which is adjusted for inflation, decreases.
According to the definition of the International Labor Organization, real income is a measure to maintain the standard of living and well-being. In inflationary conditions, since price increases are not uniform, the price of some goods and services, such as daily exchangeable goods, may change, but salaries, which are fixed according to contracts, remain the same. Therefore, when the purchasing power of those with fixed incomes decreases, real income erosion occurs, which is actually the biggest cost of inflation.
In an inflationary environment, unevenly rising prices inevitably reduce the purchasing power of some consumers, and this erosion of real income is the single biggest cost of inflation. Inflation can also distort purchasing power over time for recipients and payers of fixed interest rates.
Inflation Rate in Iran increased to 53.40 percent in February from 51.30 percent in January of 2023. Source: Statistical Center of IranIran’s workers become poorer
In the four currency crises that Iran’s economy witnessed in the years 2000, 2012, 2020, and 2022, the basket of goods and services consumed by working-class households was more affected than any other group. Official statistics, published sporadically by the regime’s Statistical Center and the Central Bank, show that housing expenses (rent), food and transportation expenses, which make up more than 70 percent of the urban household consumption basket in Iran, have imposed the greatest pressure on workers.
Furthermore, studying the Misery Index, which is a combination of unemployment and inflation rates, is another indication of workers’ depreciating living conditions. These circumstances have placed the most inflationary pressure particularly on seasonal workers.
The latest official report from the Statistical Center regarding Iran’s unemployment rate in the winter of 2022-2023 placed unemployment rate at 9.7 percent and the inflation rate in January and February 2023 at 47.7 percent. The combination of these two figures reaches more than 57 percent, indicating the worsening circumstances of Iran’s working-class community. However, these statistics are highly doubtful, and the Iranian regime certainly does not publish the real statistics to show the true situation.
It is not just inflation that has caused concern for the future of Iran’s workers. Temporary contracts and delayed paychecks have doubled the pressure on workers while employers attribute paycheck delays to government debts.
Iran’s economic structure has made the government the largest employer. In addition to the government, khosulati, or “semi-state” companies are the second largest employers in Iran.
(Khosulati is a combination of two words: khosusi (private) and dolati (government-owned). These are companies that, although apparently private, are somehow affiliated with government-backed organizations. That is, people who have accurate information about the body and depth of government programs and can predict the economic future are at the head of these companies. Most of these companies are managed by IRGC officials and their affiliates. Khosulati companies have effectively become sources of embezzlement and rent for the government.)
Khosulati companies have gradually become larger in the past two decades due to the government’s inability to pay its debts. The growth of this sector of the economy, which is largely the biggest beneficiaries in the Iranian economy, has posed significant challenges to workers’ lives and their future because they operate apart from the government in dealing with seasonal and contract workers.
As a result, labor protests over living conditions, wages, and contracts mostly go unresolved, and workers are constantly at risk of being fired. Since these companies are somewhat dependent on the government, they also benefit from government support and intervention in their decisions, and they are not held accountable by anyone.
Workers dismissed for protesting
Almost two decades following the transfer of companies that were sold to non-governmental entities, funds, and sales to compensate for the government’s budget deficit, workers remain under the most pressure from these changes. Workers who were at the forefront of management changes were sometimes laid off or simply not paid. Even their protests go unresolved because during these transfers, the buyer is mainly a non-governmental or military entity, or a retirement fund.
Recent labor protests have at times been accompanied by political demands. However, the employers’ first reaction to these types of protests has been to collaborate with security institutions, in addition to firing the workers. This happened during the protests of Haft Tappeh Sugarcane Company workers in the city of Shush, located in Khuzestan Province, southwest of Iran.
Following the protests that took shape after September 2022 and the killing of 22-year-old Mahsa Amini in police custody, workers across Iran joined the protesters. These protests immediately adopted a political tone.
Reports of dismissals, detentions, and the imprisonment of workers in recent months indicate the sensitivity of security institutions to labor protests. This is a matter that regime supreme leader Ali Khamenei directly addressed in his speech this year on Labor Day.
This year, the latest plot of the government and khosulati companies aimed at silencing labor protests is to expel protesting workers and replace them with others willing to work under such conditions. Given the promises of Solat Mortazavi, the Minister of Cooperatives, Labor, and Social Welfare, to create half-a-million jobs in the new Persian calendar year, it seems that protests can be equivalent to firing and replacing new workers so that the Labor Ministry’s statistics can be updated.
Coinciding with International Labor Day, Faramarz Tofighi, a former workers’ representative in Iran’s Supreme Labor Council, shed new light on the difficulties facing Iranian workers. “The minimum livelihood basket, which was 180 million rials (around $330) at the beginning of the year (meaning late March), has now reached 210 million rials (around $380).”
At the same time, a member of the regime’s Majlis (parliament) Budget and Calculations Commission announced a 20-percent increase in the salaries of Majlis members.
Tofighi said, “Meat has completely disappeared from the food basket of working-class families, and in the dairy section, both the quantity and quality have decreased. Therefore, talking about the cost of livelihood baskets in such circumstances is more like a joke and satire.”
In an interview with the state-run ILNA news agency, Tofighi said that the government is the largest employer in the country and seeks to compensate for its budget deficit and cash shortages by not increasing the wages of workers and employees.
“The government not only opposed the legal increase in wages but now explicitly states that it is not on the agenda to reform the wages. The government has not kept any of its promises to control inflation, and all prices have increased by more than 40 or 50 percent in the past month,” he added.
“Meanwhile, the silence among Majlis members …. is disappointing, and unfortunately, instead of solving the problem of wage earners, they are busy with SUV car transactions,” Tofighi continued.
According to reports, Reza Fatemi Amin, the regime’s now impeached Minister of Industry, Mine and Trade, allegedly gifted 75 SUVs to Majlis members in recent days to avoid being impeached.
While these controversies have been brewing, Jabbar Kuchakinejad, a member of the Majlis Budget and Planning Commission of the Majlis, has added insult to injury to the Iranian people. “Based on a decision of the members of the Majlis Budget and Planning Commission, the salaries Majlis members and employees will increase by 20 percent this year,” he revealed.
This is while the regime’s Labor Minister claimed in a recent interview with state TV on Labor Day that workers can have a decent life with the same level of wages and income, if that they and their families “live with contentment.”
The government of regime President Ebrahim Raisi had previously agreed and pledged an increase in workers’ wages by 27 percent for the new Persian year (starting from March 21). The workers’ income during the new Persian calendar year (March 2023 to March 2024) will be 80 million rials per month.
Despite objections from labor organizations regarding the very meager wage increases, and despite escalating inflation and skyrocketing prices of basic goods and services, the government is insisting on its decision and emphasizes that wage reform is not on the agenda.
According to reports, on Monday, May 1, coincided with International Workers’ Day, retirees across Iran took to the streets demanding the resignation of the regime’s Minister of Cooperatives, Labor, and Social Welfare. Many retirees from the cities of Haft Tapeh and Shush in Khuzestan Province, southwest Iran, marched and chanted different anti-regime slogans, including:
“Our rights will only be recognized through street protests”
“Enough with the injustice! We have nothing to eat!”
Retirees were also protesting in Sari, the provincial capital of Mazandaran in northern Iran. “Our wages are in rials, but our expenses are in dollars,” they chanted, referring to the rising prices of everyday necessities, services, rent, and mortgage.
Workers, retirees, teachers, and other sectors of Iran’s society were also marking International Labor Day by holding protest gatherings and chanting anti-regime slogans in other cities including Tehran, Kerman, Yazd, Kermanshah, Ilam, Bushehr, and Isfahan. These protests took place against the backdrop of ongoing strikes by Iranian workers in the energy sector.
The impeachment of Seyed Reza Fatemi Amin, the Minister of Industry, Mines, and Trade of regime President Ebrahim Raisi’s cabinet, was approved by 162 votes in the Majlis (parliament) on Sunday. The crisis in Iran’s automobile industry involving the skyrocketing prices of vehicles was the main topic of discussion during the impeachment, which eventually led to Amin’s dismissal.
During Sunday’s Majlis session that continued until 2 pm, out of the total of 272 representatives present, while 162 voted in favor of the minister’s impeachment and dismissal, 102 Majis members opposed the measure. Two representatives abstained and six votes were invalid.
This wasn’t the first time Fatemi Amin was in trouble with the Majlis. Six months ago, he was impeached by the same members. On that day, however, the impeachment failed.
During Sunday’s session, supporters of the impeachment criticized the Fatemi Amin’s report card and considered him unqualified to continue his role as minister.
The situation of Iran’s automobile industry market was the focus of criticism and one of the main reasons for the impeachment.
In his defense, Fatemi Amin acknowledged the existence of a “car mafia” and announced that one of his deputies was “attacked and nearly killed.”
The controversial issue of “gifting SUVs” was repeatedly raised during the remarks of both supporters and opponents of Fatemi Amin’s impeachment. Fatemi Amin considered this accusation a “pure lie” and said, “This allegation was neither related to the [Raisi] government nor the revolutionary parliament. It was just a pure lie. In the past few days, wherever I went, I felt a heavy gaze on me, and you were the same.”
According to reports, Fatemi Amin has allegedly gifted 75 SUVs to Majlis members in recent days in an attempt to avoid being impeached.
Ahmad Alireza Beigi, a member of the Majlis, recently announced in an open-doors session that during Fatemi Amin’s previous impeachment, his Ministry distributed “purchase documents of 75 SUVs” among the representatives to change their votes.
According to those in support of the impeachment measure, this led to the changing in some representatives’ votes and rendered a no-vote to the previous impeachment attempt. Government officials have denied this accusation. The representative who raised this issue, however, was summoned to the Tehran prosecutor’s office and went to the judiciary on Saturday.
Ebrahim Raisi defended his minister in this session and asked the members to help maintain the “stability of management” in the ministry by not voting for impeachment.
In the afternoon session, Majlis member Lotfollah Siahkali, one of the supporters of the impeachment, challenged the statistics presented by the minister and called them a “lie.” He addressed Fatemi Amin and said, “Why do you give the wrong statistics to the president to present them before the Supreme Leader?” This parliament member accused the ministry and Fatemi Amin himself of “manipulating statistics.”
The automobile industry in Iran is the country’s second largest industry following the oil industry. Iranian automakers have no significant position in the world market and are not even considered secondary car manufacturers. The majority of the automobile industry in Iran has been involved in the assembly of products from larger global companies. Currently, most of the assembled cars are products of Chinese companies.
On the other hand, this industry has led to the formation of a very large mafia in Iran. This mafia threatens the lives of millions of Iranians by producing low-quality cars while making huge profits by obtaining import licenses for foreign-made cars. There is no doubt that the management of this corrupt network is in the hands of the government. Therefore, the problem cannot be solved by merely impeaching a minister.
Ahmad Zeidabadi, from the regime’s so-called “reformist” faction, considered the removal of Minister of Industry, Mines, and Trade a useless measure. “The main problem in this country is not in this or that individuals that can be solved by some transfers. Replacing people will not have the least impact on improving the status quo…”
The removal of Fatemi Amin shows a growing rift among the regime’s elite. In the past years, Khamenei has taken a series of measures to eliminate any kind of rivalry and consolidate power within his loyalists. All three branches of power are ruled by figures who are close allies of Khamenei. However, even these measures have not managed to tone down infighting among regime officials. Amin is the sixth member of Raisi’s cabinet to be sacked or dismissed.
As the economic crisis in Iran expands and the ruling regime fails to address this dilemma, some institutions close to the government, including eight organizations tied to the “Student Mobilization Organization (SMO)” (Basij-e Daneshju) linked to the IRGC, have called on the regime First Vice President to resign if he is not willing to be held “accountable”.
In a letter to Mohammad Mokhber, the signatories call on him for the “third and final time” to provide some answers and “transparency” regarding the “government’s economic plans” as well as his “two-year report card.”
Members of the SMO from across the country have stated in their letter that the government is a place for “action” while the university is a place for “questioning.” If the First Vice President and the “head of the government’s economic team” cannot provide answers to university students after two years of his controversial decisions and actions, “you must present your resignation to the Iranian people.”
Mokhber has constantly promised to quickly address the country’s important economic challenges, such as inflation, high prices, and shortages of certain goods. These dilemmas have only been worsening during the two years since regime President Ebrahim Raisi assumed office as president.
On the anniversary of Raisi’s inauguration on September 4, 2022, Mokhber claimed that “we have been suffering from inflation, budget imbalances, and banking imbalances for more than 50 to 60 years. However, we are working to reach a good situation to reform and regulate the budget structure.” Therefore, the Raisi cabinet has started major work for “economic growth, production, and employment,” Mokhber claimed.
“Unfortunately, current policies and inconsistencies portray the opposite of this desirable situation. Today it is time to shed light on everything that has been done and is being done, and share that information with the public,” the SMO letter continues.
Mohammad Mokhber is one of the figures close to regime Supreme Leader Ali Khamenei in addition to being Raisi’s First Vice President, he is also a member of the “Expediency Discernment Council”. Prior to Raisi’s presidency, Mokhber was the head of the so-called “Execution of Imam Khomeini’s Order” (EIKO), one of the largest and opaque cartels of the government.
In such circumstances and considering that Ebrahim Raisi has been under harsh criticism for his incompetence, it is not surprising that someone like Mohammad Mokhber oversees the government’s economic team.
Mokhber has had numerous financial corruption controversies during his tenure as EIKO chief and as the deputy chair of the regime’s Mostazafan Foundation. His son, Sajjad Mokhber, also has a multi-billion dollar debt case at Pasargad Bank.
The SMO letter is important because the Islamic Revolutionary Guard Corps (IRGC) and the Basij were among the first supporters of Ebrahim Raisi and his close associates during the regime’s presidential election sham two years ago.
This letter displays how the regime’s internal disputes and conflicts have reached the highest echelons, to the point where the closest circles to Khamenei himself are also protesting the status quo. Economic pressures on the people and hollow promises by the regime’s officials are rendering a growing trend of various daily protests throughout Iran.
The letter also shows a growing rift among the regime’s elite. In the past years, Khamenei has taken a series of measures to eliminate any kind of rivalry and consolidate power within his loyalists. All three branches of power are ruled by figures who are close allies of Khamenei. However, even these measures have not managed to toned down infighting among regime officials.
One of the influential people in Raisi’s government was Seyed Reza Fatemi Amin, the former Minister of Industry, Mining, and Trade. He was considered one of Mokhber’s close associates in the government’s economic team. On April 30, he was impeached due to inefficiency and financial corruption by the regime’s Majlis (parliament). In the past decade, Fatemi Amin has collaborated and accompanied Mokhber in EIKO and its subsidiary companies.
Amin was the sixth member of Raisi’s cabinet to be sacked or dismissed. Raisi made several changes to his administration since becoming president, including the replacement of the minister of agriculture and the head of planning and budget in March. In April, the education minister was dismissed by Raisi due to a delay in payments to teachers. Later in December, the minister of roads was replaced by Raisi after being diagnosed with a terminal illness. Additionally, the labor minister was replaced by Raisi in response to protests by workers and retirees regarding payments.
