A short true story!

A short true story from Tehran daily, Iran:

-Why do you cry?
-Having no support is really painful
-What has happened?
-What has happened? I have been working here for the past two years I have never been paid on time. Whenever they wish, they pay me.
-What is your job?
-I make garments
-How much are you paid?
-100,000 tomans/month. [for an 11 hours/day, less than $4]
-How long do you work per day?
-I start at 8.00 am and finish at 7.00 pm.
While wiping her tears, she continues
-But when, they should pay me, it is really hard for them. Once every two months, sometimes, even once every three months, I am paid. Just imagine how hard my life is with three children!
-Where is your husband?
- He serves tea in one of these companies. His situation is even worse than mine. They do not pay him either.
- Why do you not protest?
- Protest! I have protested today, and have been sacked. That is what I was afraid of, and this is exactly what had happened to me. Three kids, rent, fees for education…
- Have you had any employment insurance in the past two years?
- You must be kidding! They hardly paid my wages.
- Why did you not complain?
- Had I complained, I would have been expelled a lot earlier.
She was still crying, did not finish her sentence and went away…

I solute the workers everywhere on the occasion of May 1:

The ball is in your court, me brother!

In this piece- in today’s Donya-ye Eghtesad- Mr Jenansefat writes about rent seeking in Iran. This is absolutely fine and it is an issue about which- given its predominance in Iran- we should write daily. To be brutally frank, he mixes a bit of truth with a lot of prejudice and misinforms the readers. He says, “One link” of all rent seeking behaviour in Iran is to the monopolistic state enterprises. Fine, but, what about “other links”! Am I not right to ask that when we speak about “ one link”, we must presuppose that there are links too? But he adds, “ Monopolistically supplying goods and services by the state at a very low price, is the root cause of rent seeking”.
Does he mean that rent-seeking has no other roots?
Read a bit further, and you discover that rent seeking- in Jenansefat’s view- does not appear to have any other roots. “ to organise strange tenders or even proper ones to build bridges, roads, airports, power stations, refineries… would lead to some kinds of rent seeking” in the economy.
He may wish to criticise “ strange tenders”, but, no, in his views, even the“ proper” ones are problematic too. I say: okay! If we wish to get rid of rent seeking, what should we do? If even proper tenders to build roads lead to rent seeking, how should roads be built in Iran? What about railways, airports..etc.
I expected to see a strong condemnation of rent seeking in all its forms by Mr Jenansefat. Alas! This does not appear to be his project . In the entire piece, there is not s single word about rent seeking by the private sector in Iran. Is he saying that there is no rent in the private sector? I doubt it. Of course, I am not only concerned with transactions between the State and private firms, I am, here concerned with transactions among private firms themselves. If he believes that there is no rent in the private sector, does he really say that private companies have never been involved in creating artificial shortage in the market to push the prices up? He knows and I know that they were, and they are even involved now. This extra money which is being made in this way, is not “ profit” as we define it in economics. What is this called, Mr Jenansefat? When we come to his solution to get rid of rents, his hands are exposed. “Drying up rent seeking has one and only one solution. The state should avoid intervening in the supply side of the economy, production, trade, and banking. Short of this, there is no other effective, cheap, sustainable means of doing this”.
This claim is the centre piece of his views. Using, or rather abusing economic problems in Iran to push forward a neoliberal idealogical offensive. The " invisible hands" would solve all the not observed economic problems!
But, by the way, Dear Mr Jenansefat, could you please name one small, or medium, or large economy in this- or if you like in any other- planet that have done what you want to be done in Iran?
One would be more than enough!
My Dear Mr Jenansefat, the ball is in your court now!

Have we been " deceived"? If yes, why?

Earlier tonight I was involved in a discussion and debate with a number of close friends. As usual the main focus or our discussion was ourselves, i.e. our " fate". 28 years have passed but there are still many Iranians who believe that " we did not deserve this!"Some go as far as suggesting that Khomaini " decievied" the Iranians into accepting an Islamic Republic about which they knew nothing. The latter part of the claim may be true, but I do not share the first part. At the time, Iran had about 33 million people, and the question that should be addressed is this: Even if there was any truth in this claim, why 33 million people have allowed him to " deceive" them!
My own view is in fact slightly different. The fundamental problem that needs to be resolved if Iran is to get anywhere, is the question of Iran's " build-in" despotism. The rights of individual need to be defined and sufficient legat framework for their protection should be devised. The freedom with regards to individual opinion and equally important, free expression of those opinion should be established. There should be no " ifs" and " buts", as these could be abused by every little despots. If we could move in this direction, one could hope that over time, an average man or woman in Iran would learn how not to be "deceived" by an individual, be it that " Khomaini" or Reza Pahlavi- the son of the late Shah. Ignorance is the mother and father of all evils and ignorance, is the trade mark of an unfree society. But, in Iran these days, we need more than ever to learn, and learn, and learn. Otherwise, there would be no futrue worth having.
What do you think?

Did you know?

Did you know that Iran earned, on average, $482.6 for every ton of her non-oil exports but paid out $1123.6 for every ton of her imports, a little more than 2.3 times! To put it differently, Iran exchanges 2.3 tons of "goods" for 1 ton of imported items! There is no conspiracy or collusion. This is just a sign of economic underdevelopment, and also a reflection of economic ignorance. Instead of organising value- adding activities and, then exporting goods with relatively high value, Iran exports goods that are not fully processed, and, therefore, has little value. In a sense it is not a big deal! So long as we trade like this, we would continue with this " exchange rate"! Let us not blame anyone.
Has anybody got a mirror that I could borrow!

A new game in town!

Judging by experience, it seems that the regime in Tehran is planning a major crack down of women again. What usually happens, is a group of "ommats" [believers] organise a " demonstration" complaining about an " issue". In this case, " bad-hejabi"- " violation of dress code"- and then, the government feels obliged to "respond"! I wish, they would stop doing things in this way and would stop this crack down immediately. In a situation where the eyes of the world have focused on the Islamic Republic of Iran, I think, one should be really naive and rather silly, to do things in a way that could only add to this pressure.
What do you think?

Is it a game! Which game?

The verbal war between Iran and the USA has intensified. Both sides are accusing one another of all sorts of things. In the eyes of the American policy makers, Iran is " building the bomb" and should be stopped before it is too late. In the minds of the Iranian politicians, the USA is the " Great Evil". In between, there are people like and millions of my Iranian and American fellow human beings who are as decent as anybody can be, peace loving, but, are trapped in this cross fires between the two!
What would be the economic consequences of a military attack on Iran?
Frankly, too much to calculate. It would be a disaster for the region and b bigger disaster for Iran. The Iranians would, undoubtedly, block the Straight of Hormoz, cutting the oil supply very daramatically. The price of oil would rise further and would inject further inflation into our economic sysytem.
Iran would be taken back to the nineteenth century, in terms of its social provision and infrastructure. The current regime may not be in place, but, no one can be sure that there would a functioning central government in place. If you need any example, please have a look at our neighbour, Iraq....
It does not matter where you stand! You are left or right, Republican or Democrat? Labour or Conservative?
Is that what you want for my beloved country?

Not in my name!

So Iran has joined the club! Is that a good news? If the official line is to be believed, many Iranians are congratulating one another for this fantastic achievement and the President has even claimed that " from now on, the language used to negotiate with us" [by the West] would be different. What does he mean? Is he cocking it up again! As a peaceloving Iranian citizen, I am angry, yes, angry because of the way in which things are developing in my beloved homeland. If as Ahmadnejad said frequently, Iran has no intention to build the bomb, then, why should the "language" used by others in their negotiations with Iran, change? On the otherhand, if he is actually saying in the subtext, that " we are going the make the bomb now", then, I am obviously concerned with the future of my country. To me, as a semi-qualified economist, it is disgraceful and criminal to waste limited resources for nuclear bombs when, children do not have proper schools and do not eat proper food and live in the streets in their thousands! [ I am not concerned only with Iran here, Pakistan, India and even the USA have better use for the budget wasted on nuclear and other weapon systems]. To me, it is criminal that when it comes to collecting bodies after a natural disaster, pennies are counted, and yet, billions are wasted in making these bombs or wasted to invade other sovereign countries![I want my American friends to respond here] Nuclear research for bomb making is totally unacceptable to me and for the so-called peaceful use, does not make economic sense. What do you want to do with the nuclear wastes! Bribing corrupt political leaders in the South, and damping your wastes in their back yards is not a solution, you idiots! When these wastes become active, the radio active do not need to book a flight on a BA plane to go anywhere!
Why in a country like Iran, the state does not go for sular energy which is plentiful, cheap, and safe?
Why? Why?

The world is full of fools!

In a strange move, Majlis [Iranian parliament] has decided to reduce the rate of interest and further, agreed that no matter what the rate would continue to be cut by 1% every six month, untit a single digit interest rate is achieved. In the rest of the world, under the policy of inflation targeting, governments set inflation targets and then, give the central bankers the task of achieving and subsequently maintainting those target rates. In Iran, however, Majlis deputies ignored the warings by the Director General of the Central Bank and passed the bill to do things rather in the opposite direction! It is clear that without tackling the inflation rate, such an arbitrary policy could cause further problems for the official banking sector. If inflation rate stays the same, or even increase, but the rates of interest continue to fall, the official banking sector would certainly suffer. It is likely that this would lead to a further growth of the inofrmal "banking". It would further fuel financial corruption, already at an unacceptable level in the country, as those who have the necessary connections could borrow at the official rate and lend outat a certainly higher rate in the unofficial market. It is further anticipated that saving, already at a low level, would suffer further, and the available surplus instead of being deposited in the banking sector would be allocated to speculative transactions on land and similar properties. Capital flight would be encouraged and the resulting further devaluation of the Iranian currency is likely to add to the inflationary pressure which would in turn, intensify the negative impact of this stupid deicision. I sometimes wonder if those who make decisions in Iran, live in the same planet and read the same or similar things as the rest of us?
It is a pitty that I no longer believe in conspiracy theories as the way of explaining events. If I did, this could be the basis of a nice conspiracy to create further economic and financial problems for the Islamic Republic of Iran, at the time, that she is single handedly challenging the rest of the world! Could it be that the CIA agents or those who work for the MI5 or MI6 penetrated the Majlis in Iran?
p.s.
Please do not take my final sentence seriously. The world is full of fools, and the Majlis is not an exception!