Iran Economy – Page 3

Iran Lobby Working for $120 Billion Paycheck

June 11, 2015 by admin

Only someone with a doctorate in voodoo economics would equate the Iran regime’s “resistance economy” as a “blueprint for economic reform,” but that is exactly what Bijan Khajehpour of the Atieh International Consultancy is advocating in remarks he made at the Wilson Center.

The call for a “resistance economy” designed to withstand the impacts of economic sanctions imposed on Iran for its clandestine nuclear program was issued by the regime’s leader Ali Khamenei in February 2014, in which he called on the government of Hassan Rouhani to expand production and export of knowledge-based products, increase domestic production of strategic goods and develop markets in neighboring countries. He also urged greater privatization and increased exports of electricity, gas, petrochemical and oil by-products instead of crude oil and other raw materials.

How has that gone for Iran’s mullahs so far? Iran’s gross domestic product (GDP) has steadily declined the last three quarters from 4.4 percent, to 3.7 percent and now at an anemic 2.8 percent.

Khajehpour attempted to explain away the decline by blaming economic sanctions, government mismanagement, corruption, and former president Ahmadinejad’s brand of populist economic policies. The one variable he left out was Iran’s diversion of billions of scarce dollars to support proxy wars in Syria, Iraq and Yemen, as well as terror groups such as Hezbollah.

U.N. special envoy for Syria, Staffan de Mistura, estimated Iran spends $6 billion annually on propping up Assad’s government. Other experts put the number even higher. Nadim Shehadi, the director of the Fares Center for Eastern Mediterranean Studies at Tufts University, said his research shows that Iran spent between $14 and $15 billion in military and economic aid to the Damascus regime in 2012 and 2013, even though Iran’s banks and businesses were cut off from the international financial system.

All of which comes on the heel of fresh calls by Assad for even more fighters and equipment he needs to combat rebels which Iran has met with the delivery of 15,000 new soldiers to fight for Syria. Far from being a resistance economy, Iran has been on a war footing for the past two years, all of which is fighting unrelated to its nuclear program.

It is hard to see how Khajehpour can overlook these staggering costs and contend Iran’s economy rebound as it throws more men, cash and expensive military hardware at its neighbors.

And you can’t even blame the declining price of oil on the world market for Iran’s economic problems either. Iran has a fairly diversified economy, in which oil accounts for only 23 percent of GDP. The largest contributor to the GDP is services (around 50 percent of total output), which means Iran’s primary drivers of its economy are its people.

These are the same people who are regularly subjected to street justice by the Basij paramilitary, who are thrown into prison for posted offending or critical comments on social media, who see scions of the mullahs’ race around the streets of Tehran in expensive foreign cars while they languish in economic purgatory.

Most incredibly of all, Khajehpour tried to make the argument that the estimated $120 billion in frozen Iranian assets that would be repatriated in the event of a nuclear deal would actually diminish the revenues of such corrupt actors within Iran because they no longer would have a monopoly on what commodities went in and out of Iran.

While it is not the dumbest statement ever made, it certainly ranks as one of the least believable; given the enormous pressure the regime’s mullahs are under to keep Assad afloat, a tight rein on the Shiite-dominated government in Baghdad and Houthi-rebel controlled Yemen.

If Khajehpour thinks the mullahs will not use that $120 billion to prop up their puppets, then he only reveals his true colors as a regime apologist and unabashed cheerleader.

By Michael Tomlinson

Iran Regime Dangling Dangerous Dollars

June 9, 2015 by admin

With the June 30 deadline looming for the third round of nuclear talks between the P5+1 group of nations and the Iran regime, the news media have picked up steam in discussing the possibility of foreign companies jockeying for position in investing in Iran once a deal is completed.

But in the immortal words of Greek fabulist Aesop “do not count your chickens before they are hatched.” More than a cliché, they are prudent and appropriate words for any companies looking to take advantage of a newly opened market in Iran.

USA Today ran a story looking at visiting business delegations streaming into Tehran, all with an eye towards the completion of these talks and a signing of a deal. The vast majority of these companies are European with only a few American firms kicking the tires of an open Iranian market.

“Even if all sanctions are lifted, there will still be blacklists of Iranian companies that Western companies should avoid,” said Bijan Khajehpour of Atieh International, a consulting firm in Vienna that works to bring companies into the Iranian market. “Assets in the economy controlled by the semi-state organizations are gradually approaching the size of government.”

But Khajehpour is wrong when he says that “developing Iran’s economy will lead to greater peace, political reform and moderation by its revolutionary government” because Khajehpour has a long record of associating with supporters and lobbyists of the Iran regime, including Trita Parsi of the National Iranian American Council, in efforts to direct companies and investment into Iran.

Khajehpour and his firm – co-founded with his wife Pari Namazi who is the sister of Siamak Namazi a close confidante of Parsi – have been boldly supportive of the regime in advocating for the lifting of economic sanctions by working to steer greater interest by foreign companies in Iran. The effort is designed to create a fait accompli and build global momentum towards the “inevitability” of a nuclear deal.

While the potential size of the Iranian market is significant with 81 million people, the obstacles are daunting irrespective of what happens at the negotiating table in Switzerland. For one thing, Iran ranks in the top 40 of most corrupt nations according to Transparency International; listed at 136, tied with Nigeria and Cameroon, with corruption running rampant throughout Iran’s government with much of the nation’s wealth diverted to the mullahs who control the country and their families.

Another facet of this corruption is the shell-company ownership of vast sectors of the Iranian economy by quasi-governmental entities such as Iran’s Revolutionary Guards Corps military which controls nearly a tenth of the entire nation’s economy by some estimates. The IRGC has made no bones about its desire to see a completed nuclear deal because of the vast wealth that would be pumped into its coffers at a crucial time when it has expended billions of dollars in propping up the Syrian regime, Shiite militias in Iraq and Houthi rebels in Yemen.

The IRGC also recognizes that unless it can secure a deal and have foreign investment flow back in, disaffected Iranians suffering under the mismanagement and general ineptness of the mullahs might very well choose regime change in order to get their Apple iPhones and McDonald’s Big Macs.

The true scope of the conundrum facing Western companies revolves around the central idea of why would you want to invest billions in a corrupt regime who’s very actions might turn all those billions into lost assets in the likelihood that Iran’s mullahs continue their nuclear development in secret as they did before?

Every public hanging, arrest of a religious minority, acid attack on a woman, or assault by Shiite militia poisons the well so to speak and makes it untenable for any politician to give the mullahs what they want, especially in an election cycle.

By Michael Tomlinson

The Top 1 Percent in the Iran Regime

May 6, 2015 by admin

A bright yellow Porsche Boxster GTS driven by a young woman from a poorer neighborhood of Tehran with the wealthy owner a grandson of a high ranking mullah next to her hit speeds of 120 miles per hour before losing control and slamming into a tree; instantly killing the 20 year old woman with the 21 year old owner dying hours later of injuries.

The crash, which otherwise might have drawn scant attention in New York, Paris or Tokyo, caused a firestorm in tightly controlled Iran where social media has fueled pent-up outrage over the chasm between the rich, wealthy elites of the ruling class and the hardscrabble lives of ordinary Iranians. To make matters worse, the man killed was engaged to be married, but not to his young companion, furthering the perception that the strict laws and harsh penalties imposed by the regime’s mullahs exempt their own families and supporters.

The glaring contradiction in having unmarried a man and woman together in a society where a woman found in the company of a man other than her family can result in a swift beating by Basiji paramilitary militia reveals the hypocrisy running rife through the regime’s leadership.

The flow of cash and wealth to a select few, the regime’s own 1 percent, is the product of efforts by the regime to circumvent economic sanctions put in place to slow down Iran’s nuclear program, but have turned into a lucrative illicit trade benefitting just a few and helping to fuel the regime’s support for terror groups and its many proxy wars it is engaged in, most recently in Yemen.

The allocation of wealth within the regime based on family connections or need to fund overseas expansion of its extremist religion leaves ordinary Iranians struggling amidst the excessive display of wealth by family members of mullahs and those connected to the Revolutionary Guards Corps which controls vast sections of Iran’s economy and industry.

All of which is another reason why the ruling mullahs, including top mullah Ali Khamenei, have been absolutely adamant on the unconditional and total lifting of all economic sanctions, including U.S., European Union and United Nations penalties because they want to open the floodgates to foreign investment further enriching them and their families.

But the regime is a master of contrary perceptions to suit its needs. Another example was a speech by Iranian Foreign Minister Javad Zarif in New York where he chastised Sunni Arab nations’ air campaign against Iranian-backed Houthi rebels in Yemen, and yet refused to accept the regime’s $35 billion annual support of Syrian President Bashar al-Assad in a similar vein, even with Iranian Quds Force fighters actively fighting on the ground.

But it seems Zarif has become as adept at speaking out of both sides of his mouth as his loyal supporters in the U.S. such as Trita Parsi of the National Iranian American Council. In an interview on Charlie Rose’s show, Zarif insisted the regime did not imprison people for mere opinions.

“We do not jail people for their opinions,” Zarif said. His comments were met by derision on social media from former political prisoners to call him a liar pointing out dozens of political prisoners including journalists, bloggers, political activists and other dissidents languishing in Iranian prisons.

In the most blatant example of these flip-flops, the regime moved forward with the arrest of human rights activist Narges Mohammadi this week. She was scheduled to appear in court in connection with a new case filed against her by regime authorities, but a request for a delay in that case was denied, leaving her lawyer no time to study the charges against her. Her situation remains in doubt.

While the regime continues to enrich its own members, at the expense of Iranian citizens, it also continues to oppress the same people it is depriving of an economic future. Unfortunately, there can be no Occupy Wall Street movement in Tehran since protest is likely to send you straight to Evin Prison like so many others.

By Laura Carnahan

Ending Sanctions Goal for Iran Lobby

April 30, 2015 by admin

Iran regime president Hassan Rouhani gave a speech marking Iran’s Labor Day in which he said a ratified nuclear deal would end business for sanctions busters who made millions from the illegal sale of black market Iranian oil and the importation of banned goods and technology. It was a curious statement to make since Rouhani and other regime leaders have benefitted greatly in the black market trafficking of goods.

But the Iranian PR and lobbying machine are busy trying to make the case that ending sanctions would empower the Iranian people and disenfranchise powerful hardline conservative entities as the Revolutionary Guard Corps. It is a disingenuous argument to make since the opposite is the more realistic outcome based on moves being made by Rouhani and his boss, top mullah Ali Khamenei.

It is important to remember that the number one condition of Iran’s mullahs for any deal is a complete lifting of all economic sanctions at the same time when a deal is signed. That includes U.S. sanctions (both executive and Congressional), European Union sanctions and sanctions placed by the UN Security Council. Why? Because it would open floodgates to over $100 billion in immediate cash into Iranian coffers, coffers controlled almost exclusively by the Revolutionary Guard.

In addition, the lifting of sanctions would include the immediate availability of Iranian oil back on the open market, generating almost 3 million barrels of oil for the regime. Right now, the company controlled by the Guard is maintaining a fleet oil tankers in the Gulf filled to the brim with oil in offshore storage it plans to release the minute an agreement is signed.

Also, the large bulk of utilities and services in Iran are also controlled by shell companies for the Guard, this includes the nation’s cellular providers, internet providers, electronics importers, drug importers, power companies, and water companies. The Guard recently took control of Iran’s telecommunications company with a $7.8 billion stake.

All of these firms would be able to take in foreign investment with many market analysts estimating foreign investment in Iran at close to $1 trillion; with most of that money being channeled through Guard controlled companies. The net contribution to the Revolutionary Guard would dwarf anything it currently makes on the black market.

Why this is important to the regime, besides filling the pockets of Guard commanders and regime mullahs and their families, is to help replenish state accounts drained from funding four proxy wars right now, including costly fights in Syria, Iraq and Yemen. Not to mention the need for the Guard to seriously upgrade its technology, including the recent sale of state-of-the-art S-300 anti-aircraft missile systems from the Russians to Iran. Far from hurting the Guard, ending sanctions would be the lifesaver for the Guard just when it needed it the most.

The regime needs cash badly, which is why it is making an all-out push to have all sanctions dropped immediately. It also explains why the West has at its disposal no more leverage than it does now as Iran is badly straining from mismanagement by the mullahs, its conflicts and corruption.

To not take advantage of that opportunity to force serious concessions from Iran’s mullahs in areas such as human rights and terror activities, not to mention its nuclear program would be a historic blunder; one that the world might never recover from.

By Michael Tomlinson