Will Inflation Break Records Once Again?
The editorial of Arman Melli argues that if the Iranian government does not introduce economic reforms and does not reach an agreement over the nuclear deal immediately, the inflation rate will continue to rise over the coming months in Iran.
Last month, the inflation rate soared to record levels, reaching 52.5 percent in point-by-point inflation. This new surge in inflation is due to the implementation of the government’s economic policies or the so-called “economic surgeries.”
In fact, we must realize that inflation is created on account of different factors in the country, particularly liquidity growth, government debts, and the printing of money by the government. Despite the fact that the government’s economic team has repeatedly announced its intent to control liquidity, what the government should do now is usher in financial reforms to decrease its additional expenses. In Iran, governments run the country in a financially inefficient manner as a matter of routine.
The second important step is to create financial and monetary discipline in the form of reforms in the banking system. Furthermore, professional managers and individuals must be assigned to managerial positions.
On top of these reforms is making changes in foreign policy, which will have an impact on other policies. As a matter of fact, in so far as no agreement is reached over the nuclear deal, all reforms will be affected, and the country’s economic problems will keep increasing. Meanwhile, the policies of the countries that have problems with Iran seem to be focused on preventing an agreement over the nuclear deal.
So, if the government does not introduce any fundamental reforms and the nuclear talks do not come to fruition, the inflation rate will keep breaking records in the upcoming months, contrary to what the defenders of the government claim who maintain that the inflation rate is going to decrease in the coming months.
5,000 Billion Tomans of Embezzlement in Foundation of Martyrs and Veterans
The editorial of Shargh exposes the widespread corruption in the Foundation of Martyrs and Veterans, questioning why this foundation is not audited.
The level of damage incurred due to embezzlement is still not clear. Recently, the current CEO of Dey Bank reported that only one of the subsidiary companies of the Foundation of Martyrs has embezzled about 5,000 billion tomans. This issue is of such gravity that security bodies have been asked to investigate it, according to the head of the Foundation of Martyrs who exposed the embezzlement in the foundation in an interview with Tasnim News Agency.
But this so-called “revolutionary, sacred foundation” affiliated with martyrs was supposed to be the cleanest of all organizations! Such news is released in the media every now and then, exposing widespread corruption. When it is said that corruption has been institutionalized in organizations, particularly banks, some do not believe it and claim that those who expose such corruption are portraying a negative picture of Iran and are not doing it in good faith.
When the extent of embezzlement in the Foundation of Martyrs and Veterans is so high that security bodies have had to intervene, then one is naturally suspicious about what is going on in other bodies and organizations.
The Foundation of Martyrs and Veterans is a government organization responsible for managing the affairs of the veterans and families of the martyrs of the Iran-Iraq War. This foundation is also engaged in the economic, cultural, health, and education fields. The head of the foundation is appointed by the Iranian president and the Iranian supreme leader appoints his representative to the foundation.
Then how come such widespread corruption is allowed in this organization and in its subsidiary companies? How come this foundation has not been audited since Iranian President Ebrahim Raisi took office last year?
Surrealist Economic Growth
The editorial of Etemad argues that recent claims made by the Iranian economy minister are not backed by facts on the ground, emphasizing that without reaching an agreement over the nuclear deal, there cannot be any economic improvements in Iran.
The recent remarks of Iranian Economy Minister Ehsan Khandoozi were so surprising, providing a good opportunity to take a look at the country’s economic conditions and the government’s strategy to resolve the economic problems.
When economic indicators are not even minimally satisfactory, Khandoozi offered considerably positive numbers about 4.5 percent economic growth, controlling inflation, containing liquidity, and improving employment. But he did not mention how the ground can be paved for creating sustainable economic growth.
Hence, it seems that Iran’s economy can be said to have “surrealist economic growth”– a school of thought created after World War II and the collapse of all hope, in a bid to offer a positive image of these terrible conditions.
The economy minister announced that there is acceptable economic growth in Iran, but the facts portray an extremely different picture. The reality is that people are grappling with high rents, high prices of basic goods, high inflation and widespread poverty, while they are not optimistic about the future at all. Under these circumstances, talking about normal conditions is adding insult to injury. The economy minister’s remarks are as if the patient is dying, but instead of resuscitating, they are taking the patient to the operating room for cosmetic surgery.
While Iranian officials are happy about earning $1.5 million in daily oil revenues, Saudi Arabia is selling $1 billion worth of oil per day and Iraq is selling $18 billion worth of oil per month. Iraq’s economic growth was 9.5 percent last year, while Saudi Arabia’s economic growth has surpassed 7 percent for decades. These are the numbers that must be used to compare Iran with neighboring countries. It is of no use that Iranian officials talk about numbers in a vacuum and without comparing them with other countries. We must see what the government’s plan is for ending economic sanctions and creating economic growth.
As for the minister’s remarks about the government’s monetary policies, those who are involved in the market do not agree with him. Capital, gold, forex and housing markets are distressed, while the government has offered no comprehensive policies for stabilizing these markets.
Under these circumstances, economic growth requires restoring the nuclear deal and lifting sanctions. So, one of the most important requirements for improving economic indicators is reviving the nuclear deal – something that was not mentioned by the economy minister. Without reviving the deal, the government cannot better the economy and alleviate the pressure on the poor; it is a fact which many are not willing to see.
Impacts of Inflation on Iranian-Islamic Lifestyle
The editorial of Hamdeli argues that the Islamic-Iranian lifestyle is gradually vanishing in Iran because of economic problems, particularly the high inflation rate which has significantly increased the cost of living in Iran.
COVID-19 put an end to crowded wedding ceremonies in Iran. Before coronavirus coming to an end, the wave of high prices has impacted traditional Iranian life.
Recently, it has been reported that the consumption of meat and rice has dropped, while the consumption of traditional Iranian foods has also declined. We will likely see people resorting to eating sandwiches and other economical foods in the future.
An official newspaper suggested that because of the high cost of living, dinner guests should bring along their own food to parties. This suggestion, good or bad, will soon become increasingly common, as people are forced to move toward sharing costs fairly when they get together.
But it is not that simple. Iranian lifestyles will transform drastically, as this trend will not be confined to downsizing wedding ceremonies. Marriages between young people will be delayed and replaced by untraditional modern lifestyles – making Iranian parents more and more uncomfortable.
Traditional Iranian interior design will also undergo a transformation, with home furnishings becoming minimal. Meanwhile, houses will become smaller.
If inflation continues to rise, traditional forms of eating together will be eliminated from people’s lives, and with it, a part of Iranian identity will be lost.
But that will not be the end of it. In describing Iranian culture, usually the word “Islamic” is used, as these two have been tightly woven together through time. So, the continuation of inflation will not only impact Iranian culture, it will also affect its Islamic features.
It is not hard to imagine that Iranian children and future generations will soon be able to only read about family gatherings on the internet and in books. The failing economy will change the foundations of the family, as well as society’s culture.
Protracted inflation, recession and economic isolation from the world will make the Islamic lifestyle in Iran less and less common.
Iranian Steel Industry Hacked, Disrupted
On Monday, June 28, it was announced that a cyberattack against three large steel factories in Iran disrupted production in these industrial complexes.
Khuzestan Steel Company reported a cyberattack, announcing that due to technical issues, it cannot continue its activities and is closed until further notice.
The CEO of Isfahan Mobarakeh Steel Complex also confirmed the cyberattack, urging that the attack was repelled and did not impede the production line.
The National Cyberspace Center also confirmed that on Monday morning a part of the country’s steel industry faced a cyberattack and the activities of steel companies in Hormozgan and Khuzestan were partially disrupted.
A hacking group, Gonjeshke Darande, posted a message and a video on social media claiming responsibility for the attack, “Today we, Gonjeshke Darande, cyberattacked the Iranian steel industry affiliated with the IRGC and the Basij Organization, including Khuzestan Steel Company, Isfahan’s Mobarakeh Complex, and Hormozgan Steel Company. These companies still continue to work despite the international sanctions.”
Cyberattacks against Iran’s important and sensitive infrastructure have significantly increased, including the cyberattack against gas stations in 2021 and the hacking of the Tehran Municipality’s website last month.
One day after the cyberattack against Iran’s steel industry, Israeli Prime Minister Naftali Bennett warned Iran about trying to harm Israeli infrastructure through cyberattacks, urging that “Iran will pay the price for it.”
Naftali Bennett, who was speaking at Tel Aviv University on the occasion of Cyber Week, stated that “as there is nuclear prevention, there is cyber prevention as well; our approach toward our enemies, particularly Iran, is that we are not after destruction in Tehran – that has never been our policy. Our policy is that if they mess with Israel, they will pay the price for it.”
Bennett reiterated his warning to Iran, underscoring that “you cannot strike Israel indirectly and through your proxy groups, thinking that there won’t be any consequences.”
Even though Bennett will soon step down from his position as Israel’s prime minister, he will still be in charge of the Iran file in Israel’s transition government in the coming months.
Iran Tests Satellite Carrier Missile Zuljanah
Coinciding with the announcement of the resumption of nuclear talks in Doha, Qatar, the spokesperson of the Iranian Defense Ministry announced the launch of a satellite carrier missile, Zuljanah, for the second time.
Ahmad Hosseini said that this three-stage satellite carrier has two solid-fuel propellers and one liquid-fuel propeller and has been launched with a suborbital target.
Zuljanah was launched just one day after Iran and Josep Borrell, EU representative for foreign affairs, announced reaching an agreement to resume the stalled nuclear talks in Qatar.
It is not clear whether the launch has been successful or not, but according to the Associated Press, satellite images showed the preparation for launching a satellite carrier in Imam Khomeini Space Terminal in Semnan Province.
In recent years, Iran has attempted several times to send satellites to space, but has failed in most cases, particularly from Imam Khomeini Space Terminal.
The first test launch of this satellite carrier took place in 2021, just two weeks after US President Joe Biden took office; a measure that attracted widespread criticism from the United States and the European powers.
The White House responded to the launch of Zuljanah, calling it destabilizing and unhelpful, emphasizing that the United States is committed to using sanctions and other measures to prevent further progress in Iran’s ballistic missile program.
Iran’s satellite program has faced many difficulties and challenges ever since it started. In recent years, the launch of the Simourgh satellite failed five times, and in 2020, three researchers were killed in an explosion in Imam Khomeini Space Terminal.
In the same year, there was an explosion in this center which caught the attention of former US President Donald Trump, who tweeted a “classified” picture of the explosion in the satellite carrier platform in Imam Khomeini Space Terminal.
Faezeh Hashemi Reacts to Khamenei: Our Enemy Is Right Here!
Faezeh Hashemi, political activist, former lawmaker, and daughter of the late Hashemi Rafsanjani, pointed to a wide range of social problems and blamed the Iranian government for the current conditions in the country, concluding that “Our enemy is right here!”
Faezeh Hashemi’s remark regarding the “enemy” refers to a popular slogan chanted during mass protests in which Iranian Supreme Leader Ali Khamenei and his establishment are blamed for the deteriorating conditions in Iran. While Khamenei’s constant refrain is blaming the “enemy” for anything and everything that is going wrong in the country, people keep chanting “Our enemy is right here, they lie that it is America!” – which is a direct reference to Khamenei’s ideology deeming America as the archenemy of the country.
As such, in protests in recent years in Iran, protesters have questioned the Iranian government’s media propaganda in which America is cast as the archenemy.
In her video talk, Faezeh Hashemi mentioned a wide range of economic problems in Iran including widespread corruption, poverty and capital flight from the country, underlining that at least 5,000 cases of embezzlement have been reported in Iran.
According to Faezeh Hashemi, currently at least 80 percent of people are not able to purchase sufficient food including fruits and vegetables. She added that 40 million Iranian people are in dire need of government subsidies and immediate help from charity foundations.
Brain drain was another issue highlighted by Faezeh Hashemi. She stated that annually 150,000 to 180,000 experts abandon the country.
This political activist stated that Iran’s foreign policy is weaker and more fragile than ever, adding that because of this situation, Israel has become more powerful and influential in the Middle East.
In the end, Faezeh Hashemi mockingly described Iran’s nuclear and missile programs as the only success of the Iranian political system, urging that the real “enemy” of the people is right here within the country.
Number of Desert Provinces Increases in Iran
The new head of the Natural Resources and Watershed Management Organization announced that there has been a 66 percent increase in desert provinces in Iran, adding that regions suffering from the dust particle crisis have also witnessed a 43 percent increase.
During his inauguration ceremony, Abasali Noubakht stated that the number of desert provinces in Iran has increased from 14 at the beginning of the 20-year Vision Plan to about 21 provinces now.
Emphasizing the necessity of planning for managing droughts in Iran, he added that at the beginning of the 20-year Vision Plan, 6 million acres suffered from the dust particle crisis, but that area has now reached 14 million acres.
Citing the data of the United Nations Development Programme (UNDP), Noubakht asserted that Iran is one of those countries that will face a severe water crisis in 2025 due to climate change and drought, and in 2040 the water shortage will reach its peak.
Various reports indicate that the water crisis, the increase in desertification and dust particles in many different parts of Iran have directly and negatively impacted local farmers, their families’ lives, job conditions, people’s psychological conditions, and citizens’ health.
In the meantime, a new wave of dust particles reached some western provinces of Iran and the air in most cities of Kermanshah Province was reportedly “critical and dangerous” or “very unhealthy.”
Moreover, in Khuzestan Province, widespread dust particles sent more than 500 people to hospital on June 25, and 50 people had to be hospitalized in ICUs.
Climate change, numerous droughts, mismanagement of water and soil resources, desertification, unscientific use of farming lands in Iran and regional countries are counted as the most significant factors in land erosion and sand and dust storms.