London, 17 August – The Iranian Minister of Industry, Mines and Business has said that fluctuations in the local forex market over the past four months has tripled the number of applications for import licenses, which have now risen to $250 billion.
Minister Mohammad Shariatmadari described the figure as “unbelievable” and described those seeking licences as profiteering individuals who are trying to “fish in troubled waters”, which is believed to be a reference to the current economic crisis facing Iran.
The $250 billion figure is also triple that of Iran’s annual oil income.
These import licenses mean that importers can receive cheaper, subsidized hard currencies (i.e. US dollar, British Pound) from the government in order to import items from abroad and sell them in Iran.
In April, Iran became concerned about rising inflation and artificially set the exchange rate at 42,000 rials to the dollar (while the global exchange rate is over 100,000 rials to the dollar currently), which led to many importers not being able to make a profit on the goods. This lead to more individuals and companies applying for import licenses.
Four months on and Shariatmadari is calling for the process to stop and for more thorough vetting procedures to be put in place before issuing such licences, otherwise he warns that the problem will never be addressed.
These remarks have come at a time when the Islamic Republic’s Police and repeatedly reporting arrests of scores of individuals for “disrupting [the] forex market” and benefitting from subsidized dollars by importing good and selling them based on the global exchange rate, rather than the fixed Iranian one. General Gholamhossein Gheibparvar, a commander in the Basij militia, reported that his forces have discovered warehouses full of cars, rice, and construction materials across the country and arrested a number of people who intended to sell them on.
The spokesman for the Iranian judiciary also said that many individuals have been arrested and several companies closed down, over the alleged abuse of subsidized dollars in the cell phone market.
On July 15, during a weekly press briefing, Gholam-Hossein Mohseni Ejei said: “Documents have been found that show a number of serious violations have been made on the cell phone market.”
Mohammad Javad Azari Jahromi, Iran’s Information and Communications Technology Minister, welcomed this news, but insisted that a significant part of the “violator list” has yet to be published.
Of course, the real problems in the Iranian economy are not caused by individuals, but by the government itself.