Iran’s oil and petrochemical workers have been on strike for the past week, protesting against poor working conditions and low wages. The strikes have spread to various cities across the country and have gained support from labor unions and civil society organizations. The workers’ demands include an increase in wages, job security, and better safety measures.
The strikes have caused a decline in Iran’s oil production and exports, which have already been affected by international sanctions and a decrease in global demand. The Iranian economy heavily depends on oil exports, and the strikes are putting more pressure on the regime.
The Iranian regime has responded to the protests with repression, including arrests, violence against protesters, and internet shutdowns. International human rights organizations and labor unions have condemned the regime’s tactics to suppress dissent.
The strikes have gained global attention, with labor unions and human rights organizations expressing solidarity with the Iranian workers. These strikes have highlighted the Iranian regime’s mismanagement of the country’s resources, corruption, and economic policies that have led to inflation and unemployment.
The situation for Iranian workers is dire, and the Iranian government’s repression and mismanagement of the economy have worsened their conditions. The strikes are a reflection of the broader discontent among Iranians who are demanding change and accountability from their government.
In addition to the oil and petrochemical workers’ strikes, other sectors in Iran have seen protests and strikes in recent years and months. Women, students, and ethnic and religious minorities have all been fighting for their rights and freedoms in the face of repression by the Iranian regime. The Iranian authorities have responded to the protests with force, including arrests and violence against protesters.
It is clear that the Iranian regime will not address their demands and respect their rights as citizens. The continued repression of the Iranian government is unacceptable, and the world should stand in solidarity with the Iranian workers in their fight for justice.
Moreover, the strikes have highlighted the importance of labor rights and human rights in Iran. The Iranian government has a poor record on labor rights, and the workers’ strikes have brought attention to the need for better protection of workers’ rights in Iran. For a long time, the regime has been suppressing independent labor unions and violating workers’ rights to form and join unions and to strike.
International labor unions have expressed their support for the Iranian workers’ strikes and have called on the Iranian government to respect their rights. The International Trade Union Confederation has urged the Iranian government to release all detained workers and to engage in constructive dialogue with workers and their representatives.
Absent a substantial response to their demands for a decent life, better economic situation, and freedoms, the people of Iran from all walks of life, including workers, teachers, students, retirees, and civil servants have taken matters into their own hands and are using their just right to protest as a last means to obtain their rights. The labor strikes are just the latest chapter in a long list of protest movements that symbolize the ongoing struggle for freedom and democracy in Iran.
The United States has sanctioned the Intelligence Organization of the Islamic Revolutionary Guard Corps and four of its top commanders for their role in detaining American citizens.
On Thursday, the Biden administration imposed sanctions on Iran’s Islamic Revolutionary Guard Corps (IRGC) intelligence organization because of its involvement in the wrongful detention of Americans.
“Today, I am proud to announce that my Administration will for the first time deploy a new tool to impose severe economic costs on governments and groups that hold hostage or wrongfully detain Americans around the world,” said U.S. President Joe Biden in an official statement.
The sanctions target four individuals and two security services from Russia and Iran. As a result, all designated parties’ property, and interests in property under the control of U.S. persons, are now blocked. Biden explained that these measures, which sever these actors from the American financial system, are based on an executive order he issued last summer, which expanded upon the 2020 Hostage Recovery and Hostage Taking Accountability Act.
The U.S. Treasury stated that Iranian authorities frequently detain and interrogate individuals, with Tehran playing a “direct role in the repression of protests and arrest of dissidents, including dual nationals.” The government has also announced further sanctions on four senior IRGC officials, accusing them of participating in hostage-taking efforts.
In the previous year, Biden issued a different executive order granting the president the authority to impose sanctions on individuals believed to be involved in the wrongful detention of Americans.
The IRGC Intelligence Organization has repeatedly interrogated American citizens detained in Tehran’s notorious Evin prison and has a long history of human rights violations and widespread use of torture.
American government officials have pointed out that IRGC Intelligence personnel were also responsible for providing equipment and various devices for espionage and assassinations, and played a key role in suppressing protests, arresting regime opponents and civil society activists.
According to an official statement issued by the U.S. Treasury Department , the sanctioned individuals are as follows:
Mohammad Kazemi: Commander of the IRGC Intelligence Organization since June 2022 and involved in crackdown measures against the Iranian people and arresting dual citizens. Kazemi also oversaw the brutal suppression of protests following the killing of Mahsa Amini.
Mohammad Mehdi Sayyari: Deputy Commander of the IRGC Intelligence Organization. He has been directly involved in imprisoning foreign citizens.
Rouhollah Bazghandi: One of the counter-espionage officers of the IRGC Intelligence Organization, he has played a significant role in detaining dual-nationals. Bazghandi has also overseen IRGC Intelligence Organization operations in Syria and plotted to assassinate Israeli citizens and journalists.
Mohammad Hassan Mohagheghi: IRGC Intelligence Organization Deputy Chief, reports to several senior commanders of the IRGC regarding this organization’s operations. He has also been the contact of senior IRGC commanders and IRGC Intelligence Organibazation in counter-espionage operations in Syria.
The Iranian regime has a long history of taking hostages and blackmailing the West. It has long used foreign hostages as bargaining chips in its negotiations with the West. During the negotiations that led to the 2015 nuclear deal with world powers, the regime used foreign hostages to extract more than $1 billion in ransom from the U.S. Tehran also holds several foreign nationals as hostages today and is trying to extract concessions from the U.S. and Europe.
For four consecutive years, inflation in Iran has been over 40 percent, and for five decades, it has been in the double digits. This is the picture that awaits the Iranian economy for the remainder of 2023, escalating gradually and evolving into hyperinflation.
Iranian regime supreme leader Ali Khamenei had dedicated Iran’s new calendar year (from March 2023 to March 2024) as the “year of controlling inflation”. However, during the first five weeks of Iranian calendar year the country’s point-to-point inflation rate has surged to its highest level of 63.9 percent.
Inflation, or the increase in the general level of prices, is an indicator that directly tied to the well-being of a country’s population and economic activities. It is an influential index that all members of a society are directly connected to, and an increase in it implies uncertainty about the future.
Iranian regime President Ebrahim Raisi began his tenure in August 2021 promising to fight inflation. Nearly two years into his presidency, inflation has remained an unsolvable problem. The unprecedented price hikes witnessed across in Iran during this period have forced Raisi to change his Central Bank chief in response to mounting public pressure.
Are we facing hyperinflation in Iran?
Economists believe that inflation in Iran has turned into “chronic inflation.” In such circumstances, the most likely predictable scenario is to maintain the status quo, keeping inflation at around 40 to 50 percent. In this case, it is predicted that the inflation rate will escalate at two to three times the trend witnessed in the past 50 years.
Turkey, Peru, Israel, Brazil, Belarus, and Angola are countries that have experienced similar circumstances. Such conditions cannot continue for a long period and will result in either economic reforms or result in the collapse of the economy and national currency.
However, if no change occurs in the coming months, all signs indicate that Iran is rapidly moving towards “hyperinflation.”
Starting from 2018, there has been a shift in Iran’s inflation pattern , transforming from a relatively high to a progressively increasing rate, averaging at 34 percent over this period. Notably, Iran’s inflation surpassed 47 percent in the first 11 months of 2022.
In countries like Sudan (2020), Lebanon (2021), Venezuela (2015), Zimbabwe (2019), Congo (1991), Belarus (1993), and other countries that have experienced hyperinflation, the cycle has been an increasing trend that suddenly skyrocketed to over 100 percent within a year or two, despite registering long-term inflation rates of below 20 percent.
The exchange rate of the dollar in Iran, which had peaked to 600,000 rials in February, sharply declined following the agreement between Saudi Arabia and the mullahs’ regime to resume diplomatic ties in the final days of the Persian year (mid-March). The U.S. dollar dropped to below 430,000 rials, as a result. However, with the beginning of the Iranian new year, the dollar rate rose again and was selling at 530,000 rials by April 27.
Can the regime control inflation?
With severe monetary base growth, significant budget deficits, severe rise in dollar exchange rates, and the government resorting to printing money to cover its expenses, Iran is facing a significant dilemma to due to high inflation, which could lead to hyperinflation without any positive measures in the economy.
All signs indicate that the government is busy printing money and making up for its budget deficit by borrowing heavily from banks and forcing them to borrow from the central bank.
According to official figures, Iran’s rial today is 55 percent weaker than a year ago and 94 percent weaker than a decade ago. Furthermore, nationwide protests since September 2022 after the killing of Mahsa Amini have intensified the decline in Iran’s exchange rate.
The regime believes it can create “resistance economy” that can withstand long-term sanctions and can rely on China and Russia to help it stay on its feet.
The official inflation rate announced by Iran’s statistics center in February was 46.5 percent in February. The real figure is expected to be much higher. The fact is that the Iranian people have for years seen the regime’s officials provide nothing but hollow promises. They will not be deceived by the regime, including Khamenei’s inner circle.
The result of these economic calamities directly impact people’s livelihoods through increasing poverty and skyrocketing prices. This has also resulted in grave concerns among the regime’s internal factions.
What concerns the ruling mullahs is not people’s poverty but growing dissatisfaction and an end to the Iranian people’s tolerance.
One of the key topics that Iranian regime officials are currently discussing is the country’s high gasoline prices.
The simplest question that comes to mind is whether gasoline will become more expensive or not? To address this topic, we must first examine the macroeconomic conditions of the regime’s government under the tenure of its President Ebrahim Raisi.
Gasoline prices: One of the regime’s tools to compensate the budget deficit
According to a March 4 report by the Khabar Online daily, Mohsen Pirhadi, a member of the regime Majlis (Parliament), said the deficit of the budget bill stands at 4,760 trillion rials (approximately $9.2 billion). However, in an interview some time back, an economic expert associated to the regime’s apparatus estimated that the structural deficit of the mullahs’ budget as far higher.
In Iran’s faltering economy, not only are the nation’s resources and wealth being auctioned off, but the burden of covering the budget deficit also falls on the Iranian people.
One of the underlying factors contributing to this issue is the price hikes of gasoline, gas, water, and electricity. Although the imposition of fines on individuals and trade unions for various reasons, such as women not abiding by the regime’s strict hijab regulations, also play a minor role in compensating the budget deficit.
The price of energy carriers has a direct impact on various trades, jobs, and people’s daily lives. Therefore, any increase or stability in energy prices can significantly affect production and service costs as well as daily expenses.
Gasoline, from problem to crisis
For a long time, there have been many reports on increasing gasoline consumption in Iran. Statistics provided by various study centers show that in 2022, the country’s daily gasoline consumption reached nearly 13 million liters more than Iran’s domestic production. Since the regime has no proper plan and investment to reform the production systems and optimize domestic refineries, the regime is compelled to import gasoline and allocate a budget for this issue.
Although importing gasoline is embarrassing for a country with such vast natural resources the world’s fourth largest crude oil reserves, the bigger problem is that the imported gasoline is smuggled by different regime entities.
The regime claims around 50 million liters of gasoline are being smuggled on a daily basis. An April 18 report by the official Etemad daily provided the following description of the statistics: “The country’s total daily gasoline production is slightly more than 100 million liters. The daily diesel production is 110 million liters. How can one believes that 25 percent of the diesel and gasoline produced inside the country is smuggled?”
This newspaper further explains that for such a large transfer, more than 1,500 high-capacity oil tankers or 100,000 trucks with a capacity of 500 liters must cross the country’s borders every day.
Therefore, if such a high volume of gasoline is being smuggled from Iran each and every day, it must be through secret pipelines, meaning regime-linked entities are involved.
Aside from various statistics and lies fed to the media by different regime officials, the solution to this crisis lies in the optimization of refineries and updating the country’s production line of low-quality and high consumption cars. However, the regime is only looking for more money and not long-term investments which they don’t benefit from.
Inevitable gasoline price hike and Khamenei’s red line
Over the years, experience shows that regime Supreme Leader Ali Khamenei is not concerned about rising prices, has no intention of addressing the issue of resources being smuggled, nor the diversion of funds. In fact, he and his government entities and foundations in the IRGC are responsible for skyrocketing prices and rampant smuggling.
The increase in the price of gasoline does not need to be speculated and will happen sooner or later.
In this regard, while covering the denials of various officials, state media in Iran are finally acknowledging that the regime has no solution other than another gasoline price hike. However, state media are warning that the officials involved should do this with control to prevent another social uprising as witnessed in November 2019 following a three-fold increase in gasoline prices.
In November 2019, Iran witnessed a widespread uprising that shook the regime’s foundations. As a result, authorities are extremely concerned about increasing the price of gasoline yet again and its likely consequences.
Protests across Iran erupted on November 15, 2019, when regime officials issued a three-fold gasoline price hike and sparked outrage across the country, spreading to more than 190 cities.
It’s worth noting that Khamenei’s sole “red line” is that any significant decision regarding the price of gasoline should refrain from sparking a larger and more widespread uprising, potentially resulting in his overthrow.
Khamenei is focused on downplaying and denying the fact that the price of gasoline is only one of several crises threatening his regime and could potentially lead to a social uprising and the overthrow of the mullahs’ rule.
After years of plundering and criminal measures, Khamenei is now facing the inevitable plunging of his regime into the deep waters of different crises.
Since the mullahs came to power in Iran, the topic of housing has remained a contentious issue. Home ownership is becoming increasingly difficult with each passing day. Unfortunately, for the younger generation, owning a home has become all but a dream due to the regime’s failed policies.
The Iranian people’s inability to afford residential units built in the country has left housing developers disheartened, according to Ali Farnam, a specialist at the Majlis (parliament) Research Center. “Consumer demand is currently almost non-existent in the market,” he told the semi-official Tasnim News Agency in an April 16 interview.
The average housing price per square meter in Tehran has skyrocketed over the past five years, Farnam explained. In 2018 the average price per square meter was 60 million rials. Today, it exceeds 600 million rials, marking a ten-fold increase.
According to Farnam there has been no increase in housing production between 2018 and 2023. Moreover, the risks of construction materials becoming more expensive and wages increasing have escalated. Additionally, prices increasing in other competing markets, such as Iran’s gold and coins market, are overshadowing the profitability of the house construction industry.
Housing development in Iran has been terminated despite the pledge of regime President Ebrahim Raisi to build one million residential units each year at the outset of his tenure. This commitment was deemed “unrealistic” from day one by both housing market specialists and Majlis members from the beginning.
Only 300,000 units are being constructed across the country each year, which is a third of the volume produced before 2013, Farshid Pourhajat, Secretary of the National Association of Mass Builders, said back in March. The price of construction materials doubled last year (the Persian year begins on March 21), while the construction and sale of housing have come to a halt since December due to the skyrocketing price of the U.S. dollar rate in Iran, Pourhajat explained.
The state-run Donya-e-Eqtesad newspaper published a report on April 8 discussing the significant surge in housing prices and the cost of rent in Tehran over the past three months. The report highlighted that housing prices have risen by a minimum of 40 percent when compared to prices just three months ago.
“The government no longer has adequate social capital and has lost the ability to monitor the chaotic housing market,” the state Jam-e Jam newspaper wrote during the same period.
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.
He is referring to the guidelines set to determine the ceiling of rent price growth in the range of 20 to 25 percent, announced by Raisi’s government last year.
Yousefi went on to explain that they were witness to the fact that this ordered price limit was not implemented. When inflation increases, the price of construction materials increase, resulting in the rise in housing costs. It is impossible to control the market through such a method, he added.
According to the data of the Statistics Center, in 2011 housing consists of 34 percent of an average household budget, rising to 39 percent in 2017. This figure reached 47 percent in 2020.
The data related to the Organization for Economic Co-operation and Development (OECD) shows that in the period of six years and nine months from 2015 to the fall of 2022, the price of each square meter of residential units in Saudi Arabia decreased by 12 percent.
At the same time, the price of each square meter of a residential unit in Tehran has experienced a 963-percent growth.
One should take into account that the housing market is affected by the ownership of millions of vacant houses held by various entities associated with the regime, such as the Housing Foundation, the Mehr Housing Foundation, the Mostazafan Foundation, IRGC banks, and state-owned banks. These entities benefit from rising housing costs and rental rates, imposing a further financial burden on the Iranian people.
Despite the fact that a significant number of people are becoming homeless or living in extremely poor conditions, the ruling regime has failed to provide any viable solutions.
Chemical gas attacks by regime operatives resumed following Iran’s Nowruz holiday season. These measures, which had stopped for about a month before, have picked up again and are on the rise. The new round of poisonings started on April 3 from the cities of Naqadeh and Tabriz. In the following days, they spread to schools in Isfahan, Qom, Kohenjan Sarvestan, Piranshahr, Sanandaj, Diwandareh, Saqqez, Qazvin, Ardabil, Haftgol, Ahvaz, Urmia, and Pardis in Tehran.
The Kurdistan Teachers’ Union described these chemical gas attacks against all-girls schools across Iran as “organized” and even “the killing of children”.
News censorship
These attacks continue while regime authorities are discussing measures aimed at identifying the opponents of compulsory hijab with security cameras. However, the mullahs’ security entities are failing to find the perpetrators of these chemical gas attacks. At the same time, the regime’s Deputy Interior Minister claims that children themselves are behind these poisonings.
The chemical gas attacks targeting all-girls school in Iran began in mid-December 2022 from the city of Qom, and gradually spread to different cities.
The Interior Ministry also issued a notice to state media prohibiting all outlets from publishing news related to these chemical gas attacks on schools, and described the Education and Interior ministries as the only “reliable sources” in this regard.
“Kidney complications”
Karo Pashabadi, a student from Kamiyaran, western Iran, who was studying in Tehran, died on April 7 after being hospitalized for three weeks in the capital’s Milad Hospital.
The Education Ministry announced the 16-year-old’s cause of death as “intestinal disease and kidney failure”.
Some media reported that his death as caused by serial poisoning in schools.
The Education Ministry’s public relations notice stated that Karo Pashabadi went to Milad Hospital in Tehran on March 19 due to stomach ache, adding that on that date and days prior there were no reports of “lethargy” among the students of Tehran’s Alami School.
Iranian state media use the term “lethargy” instead of “poisoning,” based on orders and instructions from above .
Poisoning and lying
Similar to the previous attacks, senior regime officials and authorities are denying the matter in its entirety.
“Less than ten percent of the students showed signs of respiratory stimulants… Part of these factors were caused by excitement… Another due to media hype,” said the Health Ministry’s Deputy Health Director, according to the Etamed Online website on April 9.
Hamid Kazemi, head of the “Student Poisoning Fact Finding Task Force”, went even further with preposterous remarks during an open session of the regime’s Majlis (parliament). “Some students may do such things out of mischief… I think that in two weeks we will be able to present a report in this regard to the public forum of the Majlis,” he said, according to an April 8 report by the Etamed Online website.
“More than 1,300 school students have gone to hospitals and still not a single official pathology report has been issued. The Passive Defense Organization has not provided a sampling report from the schools, and we have not seen even a single official situation being published. Furthermore, there is no ‘lead suspect’ for these chemical gas attacks”.
Mehrdad Veis Karami, a member of the Majlis Education Commission, recently said that there were no poisoning attacks at all (!) and that some students felt ill after inhaling oil vapor.
“This is not poisoning. Nausea is not scientifically considered a case of poisoning,” Veis Karami argued.
Meanwhile, Mohammad Hassan Asafari, a member of the Majlis fact-finding committee, said that last week’s committee meeting ended without any result because security organizations have no lead in this regard. “However, it is not acceptable for the board to just say that scented toy balloons were the cause of the poisoning,” he added, adding more controversy to the already sensitive subject.
Majid Mir Ahmadi, the Interior Ministry’s deputy in security and law enforcement, sought to further downplay the issue in its entirety. “The few cases seen in the new year, which were very limited, were due to mischief by some students seeking to shut down their schools. There have been one or two cases where students used pepper spray, which were identified and will definitely be dealt with,” he said, according to an April 10 report wired the official Mehr news agency.
Mrs. Maryam Rajavi, the President-elect of the Iranian opposition coalition NCRI, has strongly condemned the ongoing chemical gas attacks in Iran. The goal of the inhumane mullahs’ regime in this systematic crime is to counter the uprising and take revenge on Iranian women and girls who are in the front line of the struggle to overthrow this regime, she added. There is a strong need for an independent investigation by an international fact-finding committee and relevant UN bodies to thus render urgent action aimed at stop this horrific crime, Mrs. Rajavi concluded.
The ongoing situation of Iran’s unstable economy, inflation, and the ruling regime’s political isolation hand in hand skyrocketed the price of the U.S. dollar to more than 600,000 rials in the past few weeks. Despite the hollow promises of regime President Ebrahim Raisi and the Central Bank, it was not possible to immediately control the increase in the price of the dollar, and the government once again realized that economic necessities cannot be changed through orders and promises.
Following the announcement of a recent political agreement between Iran and Saudi Arabia, and the possibility of normalization in relations between Riyadh and Tehran, Iran’s currency market responded with reductions in the price of the U.S. dollar. Although this political development was accompanied by the hope that Tehran is attempting to end its political isolation, financial experts believe this cannot deliver a final solution to the currency woes in Iran.
In the two weeks, the market was facing an increase in a new surge in the price of the U.S. dollar, reaching 550,000 thousand rials on March 30 and 31, and the euro was trading at 600,000 rials.
In a survey conducted at the end of the Persian year, the state-run Donyay-e-Eghtesad daily sought to forecast economic developments expected in 2023. In this survey, market experts expressed their opinions about effective components for economic conditions.
The market is losing trust in the rial
“The most important engine behind the stock market next year will be changes in the dollar exchange rate. Experts believe that next year is the rial’s depreciation will be between 30 to 60 percent. Stock market experts believe the most important factor behind Iran’s stock market’s lagging behind other markets is the lack of confidence among investors,” the survey reads.
From the first day of his administration, Raisi attempted to encourage domestic investors to purchase stocks and boost the country’s market in the absence of foreign investment. However, his claims of incorrect statistics and optimistic economic forecasts failed to fundamentally revitalize Iran’s stock market.
The fact that domestic investors in Iran, and the general public, constantly monitor the dollar exchange rate and adjust not only their transactions but also inflation and general economic conditions with the price of the dollar, are well reflected in this recent survey.
“According to capital market experts, 46 percent of respondents consider the currency exchange rate as the main factor in stock market fluctuations. Twenty-seven percent of the observers said they believe stability in macroeconomic policies, which can be another element behind the rise and fall of share prices of stock market companies,” Donyay-e-Eghtesad writes.
“The return of investors’ trust” also accounts for the remaining 27 percent, which is basically a function of the economic status quo and cannot be realized through the promises of politicians.
It is no secret to economists that the currency exchange rate fluctuations in Iran, and its ups and downs, are mostly caused by the country’s prevailing economic and political circumstances. Corruption and ineffectiveness among regime officials are the main reason behind the current situation.
Popular uprisings in Iran have made it clear that the ruling regime has no legitimacy. Foreign investment, which could boost Iran’s stock market, has been neglected in the survey, the reason being that foreign investment in Iran can face heavy and harmful consequences due to widespread protests.
Continued currency fluctuations
The dollar exchange rate, whether in an upward or downward trend, eventually has to correct its course and stand at a reasonable figure, said Hamidreza Kahedi, a financial affairs expert, in an interview with the regime’s semi-official ILNA news agency. “In the current circumstances, political breakthroughs are very important because they open the way for the currency to flow into the country. The agreement with Saudi Arabia, which leads to relations development with other Arab countries, has a positive impact, while we cannot expect a strange jump in the currency market in our status quo. However, money printing continues and with the resulting inflation, the dollar exchange rate soaring above the 600,000 rial mark will not be considered strange,” Kahedi added.
According to this expert, with the continuation of high inflation in Iran and during a possible dip, the dollar has the capacity to exceed the 600,000 rial mark. Some experts even predict an “astronomical figure of one million rials” for every dollar by the end of the Persian year (March 2024).
Determining the real price of the dollar
There are several parameters involved in the temporary drop in the price of the U.S. dollar. Siavash Gheibipour, an expert in economic and financial affairs, explains:
“The fluctuation period in terms of time has had a series of short ups and downs during the last six months. Why these fluctuations were formed in this way is divided into two parts, a part of non-economic, non-banking, and non-monetary factors, being the impact of external conditions, foreign relations, the opening of foreign relations with Saudi Arabia and China, and the release of financial resources in Iraq and the UAE. This was a process that partially reduced the psychological impact of the nosediving currency, which took place in the first half of March. What we are witnessing today, and from my analysis, is due to the beginning of the year (starting from 21 March) and the budget launch, which leads to a 30 percent increase in the budget. This budget increase results in added inflation in the economy. Those who trade in the currency market expect that the inflation caused by the budget will reduce the country’s national currency credibility and the dollar will become more expensive.”
According to this expert, the real value of the currency in Iran should be based on the value of one consumer goods basket in U.S. dollars is equivalent to its value in a third country. If there is a difference, the government has started “exploiting the currency”. In fact, the same purchasing power is the basis for measuring various currencies. However, the same amount of purchase depends on continuous and competitive production outside of the country’s borders.
Since Iran’s next fiscal budget is inflationary and there is no hope of correcting the country’s monetary and currency policies, the trend of fluctuations in the currency value will continue into this year. Changes in bank interest rates in Iran and political openings can only restrain the increase in the price of the dollar for limited periods of time.
Iran’s budget deficit has led to massive government borrowing, a significant increase in liquidity, increasing inflation, and the national currency devaluation. However, the ruling regime does not collect taxes from the economic giants under the supervision of Supreme Leader Ali Khamenei to compensate for the deficit.
In January 2020, Omid Ali Parsa, then-head of the Tax Affairs Organization, said that “half of the country’s economy is exempt from taxes.”
Such a large portion of the country’s economy are exempt from taxes while the government’s tax revenues from the people, businesses, government employees, merchants, and private sectors have increased tremendously over the past years. The share of taxes in the government’s budget increased from 45 percent in 2021 to 52 percent in 2022, and Davoud Manzoor, head of the Tax Affairs Organization, said on March 6, 2023, that this figure would increase to 57 percent in 2023.
The Astan-e Qods-e Razavi (AQR) is one of Iran’s economic giants that is exempt from taxes. It’s head is appointed by Khamenei himself. AQR includes collections, such as the Imam Reza shrine in the city of Mashhad, various institutions, cultural, industrial, agricultural and medical departments, and a car manufacturing branch.
From the beginning of the 1979 Revolution, AQR was entrusted to Abbas Vaez Tabasi by regime founder and first supreme leader Ruhollah Khomeini. Following Tabasi’s death, AQR’s helm was transferred to Ebrahim Raisi on March 7, 2016.
In 2019, as Raisi was appointed as the head of the judiciary and began his journey to become the regime’s president. Therefore, Ahmad Marvi, referred to as Ali Khamenei’s “old friend” and “one of the most loyal current managers” to him, was appointed as head of AQR..
AQR was sanctioned by the U.S. Treasury Department on January 13, 2021. At the same time, the then-U.S. Treasury Secretary announced that AQR, along with other foundations controlled by the supreme leader, dominate half of Iran’s economy and have caused widespread financial corruption in Iran.
In September 2019, Behzad Nabavi, a member of the regime’s so-called reformist circle, said, “In our country, there are four institutions that control 60 percent of the national wealth; the Execution of Imam Khomeini’s Order, the Khatam-al Anbiya Construction Headquarters, AQR, and the Mostazafan Foundation. None of these have any connection to the government or parliament.”
To this day no documents have been published indicating AQR pays taxes. Due to the lack of transparency and involvement in governance, it is not possible to provide accurate statistics of AQR assets, but according to available documents, they are estimated in the billions of dollars.
Ahmad Marvi, the head of the Astan-e Qods foundation
More than 13,000 hectares of the 30,000-hectare area of Mashhad city are among AQR endowments. These are not limited to the city of Mashhad and are scattered in most provinces across Iran, as well as Afghanistan and Azerbaijan. In Mashhad alone, AQR has more than 300,000 tenants.
However, what makes AQR special in terms of taxation and economics is the large number of companies in various fields that are under its control. AQR is active in industries such as pharmaceutics, financing, agriculture, construction, automobiles, mining, energy, management, textile, livestock, and food industries. All these companies are managed and supervised by the Razavi Economic Organization.
This organization, self-described as “the largest economic holding in the eastern half of the country,” controls more than 70 companies and institutions.
No government institution is able to audit AQR due to its political power. It is accountable to Khamenei alone.
The Razavi Economic Organization supplies more than 145 types of different industrial, mineral, agricultural, and livestock products and services to the market.
For example, the “Anabad Agriculture and Industry Company” alone owns 10,000 hectares of cultivated land.
A large swath of 69,880 hectares in forestland located in northern Iran is under the control of the “AQR Forestry and Construction Company.”
AQR’s pistachio production inside Iran reaches more than 6,000 tons per year, of which 2,000 tons of dry pistachios are exported.
Every year, AQR’s endowment lands provide 500,000 tons of agricultural products.
More than 30 percent of the sugar cube production in Khorasan Province and ten percent of the country’s total sugar cube production are under AQR’s control.
AQR has control over many registered mines, including 11 percent of the country’s mines that provide granite stones for construction purposes. Moreover, 17.3 percent of the country’s auto industry, city and intercity buses are owned by AQR. And in some food industries, such as yeast and related products, up to ten percent of the country’s total production belongs to AQR.
The AQR Carpet Manufacturing Company has 700 employees in its carpet weaving factory in the cities Mashhad and Kashmar, producing4,000 square meters of [handwoven] carpets used in the Imam Reza shrine. The older carpets are sold for massive profits.
While the list of AQR’s economic assets goes beyond the extent of this piece, it is worth noting that of all these companies and assets are under the supervision of the supreme leader himself. This includes publicly listed companies that do not publish a detailed report of their performance.
IRNA, the regime’s official news agency, reported in 2019 that foundations and institutions under the supreme leader’s supervision, despite having a ten percent share in Iran’s economy, provide for only 0.008 percent of the country’s annual taxes.
As Iran enters the new Persian year, regime experts are raising concerns about the state of the country’s economy. Many predict that the economic crisis will deepen in comparison with the previous year, with little hope for positive change. Experts are warning regime officials that the worsening economic situation could be a major contributing factor to potential social unrest. According to reports, 80% of the population is already living on the brink of poverty.
Last year, the country faced multiple challenges, including an average inflation rate of over 40%, suspension of negotiations to revive the nuclear deal, months of nationwide protests, a sharp decline in the value of the rial in the last three months of the Persian year, and mounting tensions between the regime and Europe. These factors compounded to exacerbate the existing economic crisis in the country.
The Iranian regime hopes to lift some of the pressure and alleviate its self-imposed global and regional isolation by re-establishing diplomatic relations with Saudi Arabia. However, experts are skeptical that this or similar agreements would lead to a swift improvement in the economy. They argue that the regime’s spending is the key factor that affects the economy and that diplomatic efforts alone will not reduce inflation, increase economic growth, or restore the value of the rial.
Experts are concerned about the value of the rial and warn that previous attempts to fix the problem have resulted in sharp increases in the government’s budget deficit the following year. The budget deficit is seen as a major contributor to the problem of printing money and reducing the value of the rial, leading to further economic problems in the coming year. Therefore, experts believe that without addressing underlying economic issues, the government’s efforts to improve diplomatic relations with countries of the region will have limited impact on the country’s economy.
The dwindling value of the rial has made it increasingly difficult, and even impossible, for domestic investors to invest in Iran. This lack of investment, particularly in domestic production, is a major concern as it prevents job creation and economic growth.
Since 2017, Iran’s infrastructure has been steadily weakening, with no foreign investment coming into the country. This trend has continued and intensified each year, creating a significant challenge for the regime this year.
Another challenge facing Iran in the coming year is the shortage of financial resources. The regime planned to sell government properties and assets to the private sector, mostly entities controlled by the IRGC, in order to boost financial productivity. However, this strategy has proven to be a disappointment and failure. The regime will need to find new ways to address the financial shortfall if it hopes to avoid further economic hardship in the future.
There is considerable skepticism that the regime will be able to compensate for its budget deficit through the sale of government properties.
One of the biggest challenges facing Iran’s economy is the persistent inflation problem. In 2022, inflation was almost 50%, and the average inflation rate over the last five years has been around 40%. Addressing the underlying causes of inflation will be crucial for the regime to stabilize the national currency and prevent further economic damage.
Experts warn that without a clear understanding of monetary policy, the regime risks increasing inflation and further devaluing the national currency. Last year, severe currency fluctuations caused significant harm to Iran’s economy, and the Central Bank was unable to prevent the increase in the exchange rate. This ongoing process could lead to a crisis in the country’s economy in 2023.
Experts also emphasize that improving international relations, reducing global conflicts, easing sanctions, and adopting the financial policies of the FATF are essential for the country’s economic recovery. Despite claims by regime officials pertaining to having an independent economy, Iran’s economy is closely tied to international affairs, making it imperative for the regime to address global concerns in order to achieve sustainable economic growth.
The multitude of economic challenges, especially the rising inflation rate is eroding the middle and lower classes’ purchasing power. Addressing these problems will require a comprehensive and strategic approach that prioritizes economic stability and growth, investment, and the creation of a favorable business environment. Unfortunately, such matters happen to be at the bottom of the list of the regime’s priorities.
For months schools in Iran have been in the crosshairs of gas attacks against the country’s children. The mullahs’ regime has constantly denied any role and refused to provide any credible explanation about the source of these attacks that are attacking the most vulnerable.
Regime officials are more recently attempting to blame Iran’s “enemies” and accusing the Iranian opposition People’s Mojahedin Organization of Iran (PMOI/MEK). The MEK has flat-out denied these allegations and holds the mullahs’ misogynist theocracy responsible for targeting Iran’s schools, especially since most of the victims have been schoolgirls who have played a major role in the ongoing Iranian revolution protests since September 2022.
Amidst all this, a member of the regime’s Majlis (parliament) has acknowledged measures carried out to keep a lid on the truth regarding this troubling matter and denied any foreign role in these attacks.
Yahia Ebrahimi, a member of the Majlis Health Commission, said in an interview with the Roydad24 website in Iran that officials have not been honest with the Iranian people regarding these series of gas attacks, adding they’ve been cloaking the matter for long now. And it goes without saying that regime officials and the Majlis agreed to see into the poisonings only after the gas attacks spread from the city of Qom to other cities across the country.
Reports from Iran indicate more than 13,000 students in at least 245 schools have been affected. Ebrahimi went on to reject the claim of “hysteria” raised by regime officials and specifically said there is a chemical substance involved in these attacks.
Iran’s state-controlled media, and especially those with ties to the Islamic Revolutionary Guards Corps (IRGC), churned out reports of collective hysteria and began pointing their fingers at foreign-based elements. Iran’s deputy Interior Minister in security affairs on one hand related the country’s gas attacks to stress and hysteria, while on the other raised accusations against “the protests’ plotters”.
Yahya Ebrahimi’s remarks, however, pinpoint the contradictory trend in the Iranian regime’s case on these poisonous attacks. “I have participated in all the sessions. It is false to say it has been determined that the PMOI/MEK is behind these attacks. To this day the security forces have not found any signs of foreign involvement in these attacks,” he said recently.
The world has not been silent in this regard as the European Parliament issued a resolution condemning the poisonings. Eight UN rapporteurs published a statement rebuking the mullahs’ hesitance in conducting an immediate investigation and preventing further attacks while voicing grave concerns about the regime’s Interior Minister claiming 90 percent of poisonings were due to stress, while judicial measures have been employed against journalists investigating the entirety of these gas attacks.
The regime’s claims of not having any leads in finding those behind these attacks is hard to believe, to say the least. All schools in Iran are equipped with surveillance cameras and the regime’s security forces have been identifying and arresting tens of thousands of protesters in the past six months alone. Therefore, the possibility of the regime’s own forces behind this series of poisonings targeting Iran’s children easily stands out as the most likely and logical scenario.
Some analysts are describing these poisonings as “state terrorism” and regime Supreme Leader Ali Khamenei remained silent on this topic for more than four months, further strengthening the suspicions against the mullahs’ own apparatus.
“After 100 days, Khamenei is looking for someone to blame in fear of an uprising, which is none other than himself, the agencies, and agents under his command. Otherwise, he should accept the international investigation mission,” said Maryam Rajavi, President-elect of the Iranian opposition coalition National Council of Resistance of Iran (NCRI), condemning the poisonous gas attacks targeting mostly schoolgirls across Iran.
Recently, Mohammad Taghi Fazel Meybodi, a theologian close to the regime, told the state-run Sharq daily that the poisonings across Iran were directed from Qom and Isfahan, two epicenters of the regime’s fundamentalist/misogynist geology. Certain groups “believe girls should have no education, or be limited to third grade at max,” he added, only to retake his remarks later, claiming they were unofficial and should not have been published.
When a regime launches “state terrorism” against its own population and specifically targets children as the most vulnerable branch of any society, there is no limit to its atrocities both inside its borders and abroad. Such a regime has no place in the international community and should be shunned by all global bodies.
