Short Notes on Iranian Economy

A Dangerous game in Tehran

2012-01-29T17:14:00.000-08:00

A short article on current situation in Iran published in Viewpoint.

The risk of famine in Iran

2012-01-19T16:30:00.000-08:00

A short article that could could be read here.

Theocracy and the Dilemma of Taxation: The Case of Iran

2011-09-10T07:33:00.000-07:00

Let us begin with a simple definition. All the money that a government collects from the inhabitants of a country in order to finance its expenditure is called tax. It comes in a variety of forms. Direct taxation is usually a tax on income and indirect taxation is usually taxes imposed on expenditure, broadly defined. We also have inheritance tax, Stamp duty, taxes on income from real estates, income tax, corporation taxes. When taxes are paid, it is expected that government will be accountable to the tax payers as to what it did with them.
In a theocracy, like the one that exists in Iran, taxation is problematic. In addition, there is a historical problem too.
- While most of us in Iran do not wish to pay taxes, most of us expect that the same government that we refuse to finance its activities, should provide all kinds of services to us. Whenever we get an opportunity, many of us complain that the quality of these services is not good in Iran either.
- Especially following the discovery of oil in Iran, the government had a major source of income which is independent from the population, and hence, the government effectively does not oblige that it should be accountable to the public as they pay little or no taxes. From experience, it could be stated that even if we insist, there still will be no accountability. On the other hand, the public who faces an unaccountable government develops a tendency towards ignoring government’s laws.
In recent months, for a second time, the government tried to impose a value added tax of 3% but, the shop keepers and other merchants went on strike and there were clashes here and there and eventually, the Economic Minister instructed the taxmen not to impose it for the time being . Once again, the shop keepers in Iran, especially the textile merchants, have boycotted trading and closed shops.
While these issues could be examined in details, but in our view, the main problem is elsewhere. In order to understand the situation, we need to distinguish between different types of taxes and different historical periods in Iran. Up to the February 1979, when the monarchy in Iran was overthrown, we had an interesting political mixture. The mullahs, unlike the post 1979 years, were not directly on power, but, the Constitution of the country that were ratified after the 1906 Revolution, gave them a massive power base and influence in the legal make up of the country. Despite this point, with the exception of Fazl ol Lah Noori - who was later executed by other mullahs- who argued for a twin sovereignty- one for mullahs and another for the Shah- other religious leaders believed that in the absence of Imam Mehdi- The Hidden Imam- the Shahs in Iran have usurped power and hence, would not encourage Muslims to pay taxes to a government whose head, in their eyes, was not “ legitimate”. In our view, this has gradually become part of Iranian financial culture.
Furthermore, in Iran, in addition to common taxes- i.e. money paid to the government in a variety of forms- there is various kinds of religious taxes too. It goes without saying that as the head of government is supposed to be in his position by usurpation, payment of common tax is “haram”- forbidden and religiously unlawful. The argument goes something like this, taxes must be paid willingly, but governments very often use coercion to collect taxes, then all other thing apart, the use of coercion makes it unlawful to pay. In short, up to February 1979, the great majority of mullahs not only would not encourage the payment of common taxes, but have effectively created an alternative system for them, the one which is usually called “Imam’s share”. Most of the mullahs who collected these “Imam’s share”, would have to in turn finance their “ madresseh” [ place of learning], or students, i.e. talabeh. This payment is usually referred to as “tuition”- Shahriyeh- but it actually is some kind of a grant, given to enable religious students to focus on their religious education. Two things would happen here: First, religious schools, Houzeh-ye Elmeeye- would be independent from the central government. Second, Muslims by paying their religious taxes and other dues will fulfil their divine duties and obligations and would have less incentive to pay the common tax. In practice, however, this would imply that a government faced with this package, tends to have financial problems and face budget deficit. What was left of the Imam’s share, after paying talabeh’s living expenses would be spend on publicly useful projects. During the pre-1979 years, the government did not pay sufficient attention to this issue and allowed this mixed taxation system to continue. Two reasons could be offered for this negligence. One, the oil money was available, and hence, the government was to a large extent self sufficient. Two, Policy makers were aware that if they try to seriously change the system and try to impose common taxes and restrict the payment to mullahs, a point would come that they may have to become accountable and that was too high a price to pay under a culture of despotism that prevailed in Iran.
Whatever the background, in February 1979, the monarch was overthrown and a theocracy led by the mullahs took over the organs of the state. Despite the revolution, the common structure of the state was maintained too. Oil money was still there and it is still there, and even two years ago, the price of oil jumped to $150 a barrel. But the conflict and contradiction between common and religious taxes continued and even intensified. In the earlier years, while Khomaini was still around, it was most likely that his dominance was so total that other mullahs who had a position in the state, did not receive any Imam’s share, hence, had no motive to discourage the public from the payment of common taxes. Not to mention though that the state by then was theirs too. So far as we can judge, there was one grand Ayattollah who was the “ Marj-a-e Taghleed” [ literally meaning, the source of imitation]. Following the death of Araki, the last single Marj-a-e Taghleed, the Islamic Republic decided to “nationalise” this position and tried to take it under its control and announced ten Ayatollahs to be Marj-a’s.[ This number may have gone up in more recent years]. It goes without saying that each of these marj-a’s must have some followers who would prefer to pay their religious taxes to their chosen Marj-a. There are two main types of religious taxes, Zokat that varies between 2.5 to 10%. The other major tax is Khoms, which is 20% of the surplus annual revenue. Ignoring other taxes , the question is if a Muslim pays these two components, will it be right and proper that he should also pay a common tax to the government. If a country does not have a proper taxation system in place and if its monitoring system is not effective and efficient- both of these shortcomings apply to Iran- it is clear that the taxes that would be avoided and not paid, are likely to be common taxes. Two reasons for this could be offered, one, religious taxed are paid willingly and as part of individual’s belief system, and second, common taxes should be paid to a state that its legitimacy is in question in the minds of these tax payers. Hence, it is most likely that government may have serious financial shortcoming. This issue is rather serious, as religious taxes despite being paid by the citizens, but are not collected by the government or any organisation associated with the government. According to a pronouncement by Khomeini, Khoms had two parts, “One part should go to believers [Saadaat]” and the other “is Imam’s share that will be collected by a certified Mojtahed and will be spent in the ways that he sees fit” . There seems to be some discrepancies among Islamic Scholars on religious taxation. For instance, Manzar Kahf believes that Zakat “should be collected by the government and should be used to finance social welfare programmes run by the state”. However, Khomeini’s views on Zokat are different from views expressed by Kahf and allow no room to the government to have any access to it. On the other hand, two months before his assassination in 1981, Beheshti in a speech in Tehran discussed the issue of taxation in Islam and made a number of interesting observations. In the same way that a Muslim would pray to and for God and in the same manner that for a month he fasts for God, there is also a “financial worship”, i.e. financial obligations that should be fulfilled for God, Beheshti argued. Zokat, in Beheshti’s view is paid for God which should be spent on His path. Payment of Zokat, according to him is “worshiping God” . After this introduction, he raises a fundamental question: In an Islamic society, should Muslims pay any taxes other than the religious taxes of Khoms and Zokat? He then moves on to suggest that some Islamic scholars believe that they have no other financial responsibilities as if the Muslims pay what they should pay “there will be no gap and no need for any other such payments”. On the other hand, there are other scholars who argue that “in an Islamic Society there may be other needs that these taxes may not be enough, hence, the Muslims should share the financial responsibilities”. He goes on to say that if in an Islamic society there were needs for which more money- more than the amount that could be raised via religious taxes- was needed, then “ it is obligatory for every Muslim to participate as much as they can, or with the surplus that they have”. In short, every Muslim and in fact all Muslims are committed to provide sufficient funds for the management of an Islamic society”. He goes on to suggest that if voluntary contribution was not enough, Velayat-e Faghih [The Guardian of the State] can “levy special taxes” and collect them. To summarise Beheshti’s view, he suggests that the majority of Islamic scholars have a three steps approach to this question: First, four types of Islamic taxes are collected and if the sum was not enough, voluntary contributions would be asked for. If there was still a need for further resources, then, an Islamic government could levy common taxes too. In his view, an Islamic government should have a properly defined programme and it is essential that it should be a programme for long term and all these, according to Beheshti, is based on the Holly Quran. He argues against indirect taxation and believes that it is un-Islamic extortion as the ability to pay is not taken into consideration. His speech ends with a question and answer session, and some of his answers are interesting. In his reply to a question whether Khoms and Zokat should be paid to the government, he replies “ In our current situation, if these taxes are spent in the same way as before, helping to reduce the financial burden of the government, this would be in line with the aims of our revolution”. He adds that his answer is mainly based on the views expressed by Khomeini when he was asked the same question.
To conclude, our discussion in the previous pages has shown that most of the taxes, especially the religious taxes are not paid to the government and are spent by religious leaders who are in a position to collect them. Beheshti makes this interesting point that management of “modern states” will not be possible “without levying new kinds of taxes that may have no traces in the Holly Book or other historical documents” but by declaring indirect taxation as non-Islamic, it is not clear what kind of other taxes he has in mind. In many modern states, indirect taxation is a major source of revenue for government and if these were to be banned in an Islamic government, it is unlikely to avoid serious budget deficits. On the other hand, if there were to be progressive income taxes, taking into consideration the ability to pay, would it be fair or practical that those who already pay up to 10% Zokat and 20% Khoms, pay even more in the shape of common taxes too? If all these taxes are levied, how economic agents would respond to them and what would happen to their incentive to work and produce? On the other hand, if these new taxes are not in place, can an Islamic government finance its social, cultural and economic programmes without facing financial crisis? Thirty years have passed since Beheshti spoke these words, indirect taxation and other types of common taxes are in place, and yet, the government has an annually increasing budget deficits. It is our conviction that this is due to what we would call an " Iranian Disease" to which we shall return later.

The Political Economy of Comtemporary Iran

2011-09-09T16:45:00.000-07:00

I am in the process of preparing a book on the Political Economy of Iran under Ahamdinejad. I do not know when this project will be finished but I will do my best to complete it sooner rather than later. To give you some idea of what I will be writing in this, I post one of the chapters here. Please feel free to share your criticisms with me. I am a very " small" person, but am " big enough" to take criticisms.

p.s.When I cut and past, I loose all the footnotes. Anyone interested to receive a copy of this post with all the footnotes, please drop me an email to: i.seyf@hotmail.co.uk and I will be happy to send you a copy.

Economic management: Ahmadinejad’s style

Until recently, hardly any day will have passed without the index of Tehran Stock Exchange [hereafter, TSE] setting a new record . Some commentators have even claimed that the movements of this index show that economic sanctions had no meaningful impact on the Iranian economy . It has also been claimed that despite all these sanctions, risks have declined in Iran and the economy has had a very healthy growth rate. The main purpose of this chapter is to show that given the prevailing overall economic conditions in Iran, this record breaking behaviour is seriously dangerous and risky and is not sustainable. It is further claimed that what we witness in Iran has all the hallmark of a financial bubble and like all other bubbles it would burst soon. But how can such a dire prediction be justified?
- A brief background
Let us begin with a very basic and well known principle of a capitalist economy. In a modern capitalist economy, price system plays a vital role in helping economic agents to make decisions. When a price changes, it gives signals and economic agents respond to these signals and make decisions which determine how resources will be allocated in the system. For this system to produce the expected outcomes, a number of preconditions must be met:
- Prices must be real so that this signalling reflects the true costs [the main justification for removing subsidies].
- Not only the prices must be reflecting the true costs, markets must be competitive too. If there are factors, economic or otherwise, reducing the level of competition in the system, efficiency will suffer and that will not be beneficial to the overall working of the economic system.
- Last but not least, for this system to work well, the state must minimise its intervention in economic decision making and most if not all these decisions must be made in the private sector [ the main justification for privatisation and in Iran, for the re-interpretation of Article 44 of the Constitution]
It goes without saying that if any of these conditions are absent, price system will fail in its main function, i.e. signalling, and in the absence of right signals economic agents will not be as efficient as they can. For instance, if the basis of pricing is production costs, i.e. firms have the power and authority of using production costs to set prices, in a non-competitive environment, there will be no incentive to try to reduce them as these extra costs will be effectively passed on to consumers who in a non-competitive environment have little option but to pay or refrain from consumption altogether. Either way, this will not be useful for the overall management of the economy. On the other hand, when these conditions are met, main questions, such as: What goods/services should be produced? How much? And how? All these questions will be answered via this signalling process. Observing these signals, economic agents will then decide what production should increase and which areas should face a contraction. When this happens, we are told that resources allocation and private and social welfare will be both maximised. In a modern capitalist economy, one of the most important markets is the stock exchange where shares of the listed companies are bought and sold. On the basis of what we have briefly described above, the Stock Exchange Index is a signalling device for the overall state of the economy. If the markets are sufficiently transparent, then, this index should be a very useful yardstick to assess the overall economic condition. Leaving a lot of details out, the potential buyers of shares, would wish to buy a particular share because it pays a relatively higher yields than others. When this happens, there will be more demand for that share, and hence, its price goes up further and in turn, given its weight in the Index, contributes to increase the overall index. This is not the only incentive for the purchase of shares and another motive could be the potential capital gains in the medium and long term. Suppose a buyer A buys 100 shares of a company B at £1 each and five years down the line, the market price of these shares are £5. £4 per share or £400 for 100 shares in our example is capital gains that could be realised if the owner of these shares so wish. Once again, if the Stock markets are to perform these functions properly:
- They should be free from state manipulation and should be independent from the government.
- There should be a variety of institutions to monitor and assess the quality of information provided, and to make sure that there will be no insider trading and similar illegal activities.
- Markets must be competitive to ensure that signalling would reflect the true state of the economic fundamentals. In short, these prices go up and down reflecting the true state of the underlying economic conditions.
As before, if in relation to the stock markets, any of these pre-conditions are absent, the signalling could not and should not be trusted.
On the basis of our discussion so far, when the index keeps rising in an economy, a potential conclusion may be that the economy is doing fine. Listed firms- usually the largest ones in that economy- are profitable and share buyers are picking up these signals, and respond in a way that their higher demand is pushing the prices of these shares up. So far so good. Let us now return to our case study of Iran.
- Breaking records in a collapsing economy: The case of Iran
In the remainder of this chapter, we shall argue that in the case of Iran, a corruption riddled economy, the real sector, i.e. the productive sector, is suffering from a very serious recession. The state that lacks a properly functioning fiscal system uses its control over the Central Bank to increase liquidity as a means of financing its activities. Parts of this massive liquidity fuels inflationary pressure which in turn intensifies the deep rooted recession in the real sector. Some of this extra liquidity goes to real estate, creating a housing bubble or going into stock exchange fuelling a financial bubble. What we witness in Iran, in contrast to what many believe, is not a healthy economy that is giving signals to economic agents but rather the expansion and extension of these bubbles. Let us explore some of these issues further.
First of all, not only TSE is not an independent institution, but most of listed firms who are active in this market are in fact state owned or are owned by quasi state organisations, such as Islamic Guards. Fro Instance, we know that 10% of capitalisation of this market belongs to Iran’s Telecommunication which was recently ‘purchased’ by the economic arm of the Islamic Guards. Furthermore, we also know that as from the beginning of 2008 the way that TSE index was calculated has changed and the current index shows price variations and also what is referred to as “cash productivity”. According to the Boursnews “ given this change, if during the period under examination, the prices remain constant, but listed firms give higher dividends, the overall index will move up. The second and more fundamental problem is the current index is in fact a mixture of the old and new indices that has been mixed for the first time in the world. What has been done in Iran is very similar to adding a measure of length [metre] to a measure of weight [kilogramme] despite the fact we know that this should not be done.” So this mixing, not only is unique to Iran, it is also totally meaningless and perhaps even misleading. We further know that some of the largest companies in the country, such as, Mobarakeh Steel, Kharq Petrochemical, Iran Khodrou, Sipa, Telecommunication, all listed companies have distributed profits among their shareholders, hence helping to inflate the index. While shareholders will be happy with this, in contrast to what is claimed by the government, this distribution of earnings is clearly an indication of the absence of opportunities for productive investment and expansion in the economy. The environment for investment is not right, and hence, the boards of these companies decided to take this root. Boursnews has even claimed that “Telecommunication has distributed illusionary profits among its shareholders so that one of its main shareholders, Consorsium Touse-e Etemad Mobin (the economic arm of theIslamic Guards that bought Telecommunication) could pay off an instalment of its debt to the government for this purchase. It goes on further to add that “Our economy faces a serious problem and despite all the noises that government ministers make, the economy and our main firms face numerous serious challenges that it is not at all clear how would they be sorted out”.
Contradictory statements made by government ministers support the warnings issued by Bousnews. The minister for industrial affairs, Mr Mehrabian , and his statements confirm this view. While offering an inflated view by giving impressive data of the health of these industries, at the same time, he declares that “a special centre will be set up to deal with all the problems of the industries and mining in this country”. This centre was proposed by Ahmadinejad, approved by the cabinet and consists of deputy ministers of industrial affairs, labour, economic affairs, energy as well as representatives from social security, Central Bank and commercial banking sector. Decisions made by this centre, when approved by the minister “will be binding for all sections” of the government. One of the main functions of this centre is to organise the completion of many unfinished projects. To put it differently, if there is no crisis as the minister claims, then why this centre was set up and at the same time, if the crisis is real, then, the record breaking behaviour of TSE index has nothing to do with economic health and economic fundamentals! Let us add also that last year, it was revealed by the same Mr Mehrabian that 6700 companies who were unable to service their debts were given extra time and yet, the minister claimed that “there is no crisis”. During the same press conference, Mr Mehrabian added that a new list is in progress of other companies who are unable to service their debts. Since then, all indications show that the situation if anything has become worse. At one level, the imports into Iran increased, meaning that these troubled Iranian companies have possibly lost a further share of the domestic market, to the extent that without government direct financial help they are unable to pay the wages of their employees. Furthermore, government interference into the money market- the arbitrary reduction of interest rate, biased distribution of credits and loans in favour of newly setup firms that despite their interesting titles, were a complete failure- meant that there was little credit left to be offered to established firms in the real sector. In addition, even if there was no shortage on the supply side, arbitrary reduction of the interest rate lefts banks with little motive to lend out at a rate set by the government below the inflation rate. Instead of offering loans, banks prefer to enter into a kind of partnership contracts with clients which are much more expensive than interest charges on loans. In relation to addressing the causes of recession of domestic firms, the government has taken a very confusing position. While it blames it on international crisis, at the same time claims that Iran is a “rose garden” in a global jungle which is on fire! On the other hand, according to one estimate, the banking sector in Iran has about 50.000 billion tomans “toxic” debts, that is outstanding debts that have not been settled upon maturity. The government has instructed these banks, mostly state owned, to give the borrowers an extra year to pay and this extension while might be helpful to the borrowers, is potentially capable of intensifying the crisis in the banking sector further. One point is certain, this delay seems to have created an Iranian style “credit crunch”, that is, the banking sector can not offer too much credits to those who needed them most.
The corporate financial crisis started at the big firms and then moved to others. Iran khodro, the largest car maker in the Middle East, is said to owe between 6000-10.000 billion tomans, and for the first time in its 45 years existence, it made a loss last year. At the same time, the largest debtor in the economy is the government. While the balance sheets of these firms may look fine, lack of payment by the government has created a very serious shortage of liquidity for many of these firms. For instance, in the energy sector, government debt to firms engaged in this sector has exceeded 5000 billion tomans, creating a crisis for many firms at various stages of production. It is most likely that last summer, frequent cuts of electricity may have been caused by this factor. It is estimated that these cuts cost the economy billions of dollars. Whatever the official views of ministers in Iran, as the crisis in the energy sector- frequent cuts- created a serious crisis for many producing units in cement making, steel factories and a few other industries. We also know that another special committee was set up to address these problems. The cost of electricity shortage for the mining industries, cement making, and steel factories is huge. In the steel industries it is estimated that around 10% of final output is lost due to power cuts . In the second largest car producer in the country, Sipa, on one of such occasion, the production line altogether was suspended for several hours. The deputy minister for Industrial Affairs has publicly stated that “the main problem in the industrial sector of Iran is a shortage of liquidity and circulation capital”. In his view, this could be reversed, but no policy was offered to address these shortages. Like other ministers, he has also blamed the banking sector for not providing sufficient credits for industries but nothing was said about an imposed interest rate which is below the inflation rate and further, to another anomaly that banks are obliged to offer credits to governments designated firms.
Let us add that the crisis in the economy is not limited to cases referred to thus far. It is much wider and deeper than what is being admitted, if at all, by government. Given the spread of the crisis, this record breaking behaviour of the TSE index has all the characteristics of a serious and dangerous bubble that is taking shape. According to Khoshchehreh a former member of parliament and an Economics professor at Tehran University “in the current situation, employment situation and the number of unemployed reached a dangerously critical point” . We also know that there is a recession in the housing market that could very easily spread to other sectors. During 2009, house building in Greater Tehran has fallen by 48% . In the energy sector, especially electricity production and distribution, “as little has been done to address its financial crisis, the intensification of the crisis is almost unavoidable”. With the closure of firms, “there is likely to be destructive waves of redundancies and also several projects would have to stop with potentially serious implications for the rest of the economy that could not be compensated” . Despite the fact that the TSE index keeps setting new records daily, but “productive activities in the country have never been this poor” . According to the chief executive of Iran’s Chamber of Commerce, “ about 50% of companies scattered all over the country have either closed or are at the verge of closure” and “ most of productive firms operate at 30% of their productive capacities” . The chief of textile industry association believes that “textile industries move toward total recession” . Nehavandian who has recently been elected as the head of Tehran Chamber of Commerce responded to the growth in the number of bouncing cheques and said “this is a clear indication that the economy is not in a good shape” . He added “a reduction in capital and an erosion of social confidence are two major problems facing the economy. The fact that the number of bouncing cheques is constantly rising, is a clear indication that the economy is not performing well”. In support of this warning let us add that in the period of 2002-2009, while Iran revenues from oil increased significantly, investment as a proportion of national income has declined” . As to specific industries, we know that domestic furniture market is almost totally under the control of foreign imports, and about 70% of domestic demand has been taken away from domestic producers . If domestic demand was rising and extra demand was being met by foreign supply, this would not have been an indication of a serious crisis, but this is not the case in Iran. Foreign supplies are replacing domestic production and this process is reflected in rising unemployment. For instance, the official data show that in 2009, unemployment rate has increased by 1.5% and we also know that in 21 out of 30 provinces the rate has increased. Lorestan with 19% has the highest unemployment rate followed by the province of Hamadan where unemployment rate jumped to 18% . In other chapters we would discuss the crisis in sugar industries in full, and here we would just remind our readers that there is a gap of 0.5 million tons a year between domestic production and consumption of sugar. In the period of 2006-2008, more than 5 million tons of sugar were imported into the country. As a result domestic production has fallen from 1.3 million tons to less than 0.5 million tons, another factor fuelling unemployment in Iran. In the past two years, the production of beet root declined by 74% and there was a 75% fall in the production of sugar . Despite all these disturbing developments, the industrial affairs minister claims that by the end of the year- 2010- investment in industries in Iran will increase five folds, but every other indicator clearly show how serious the situation is and no such massive rise in investment is taking place.
In relation to largest automaker in the Middle East, Iran Khodrou, we are told that “the largest manufacturing firm in Iran has such a drastic financial problem that every now and then rumour has it that it has gone bankrupt” . In 2009, the company had to sell some of its fixed assets in order to distribute promised dividends to its share holders. According to a report in Tehran daily Etemad, for 2010, the managers of Iran Khodrou plan to tell the shareholders that company’s made no profit in 2008-2009, and in fact, made a loss of 120 billion tomans. In relation to Iralco- an aluminium producer controlling 50% of domestic market- and like many others have recently been bought by the economic arm of the Islamic Guards- there is a similar problem and its financial position is very weak. Eisa Rezaee, the general manager of Mehr Eqtesad-e Iranian [another proxy firm owned by the Islamic Guards] pointed out, “up to the end of 2008, the prediction was a dividend of 400 tomans per share will be paid, but in actual fact, the loss per share was 323 tomans and overall the company made a loss of 56 billion tomans. In addition, Iralco had a debt of 400 billion tomans to banks, 30 billion tomans to electricity firms and 12 billion tomans other debts” . We are not sure how, but, these were taken out of the balance sheet of Iralco and were not reflected there. Over the summer- 2010- while the TSE index was breaking all records, we know that in the Industrial Estate Abbas Abad in Pakdasht, where 1800 small and large factories are accommodated, “frequent power cuts” created a “highly critical situation”. In a report on this, we read that “sometimes at the middle of a process, there is power cut, and this happens when semi processed materials are to be moved between various stages. Not only our equipments are damaged but semi processed materials are spoiled too. In many cases, they could not be used or re-used”. In money term, the costs of power cuts are “several hundreds of million tomans per hour”. In addition to moulding- which suffered major losses, we know that “Glass, petrochemical, plastic, shoes, plates and cutlery makers” who are stationed in these industrial estates in Greater Tehran “have suffered very serious unrecoverable losses as a result” to the extent that “many of them are now working at 50% and less of their full potential” . Given this brief description of the economy, we argue that the movements of TSE index have little to do with economic fundamentals and with the health of the economy. We shall return to this issue and examine it further by looking at Iran’s Industrial sector in greater details.

The Great Satan and Mr Ahmadinejad!

2010-09-26T16:40:00.000-07:00

The Internet is full of articles by Iranians who try to " rationalise" Mr. Ahmadinejad's behaviour duirng his recent trip to the USA. He was softer on Israel this time, but instead, disgracefully semi-denied the 9/11 by suggesting that the American government may have been behind it. There is nothing new about this conspiracy theory as it was first suggested by some Western, namely American and in particular, some French writers. I am not sure if any decent human being has taken this theory seriously. It may be true that the Americans may have " utilised" or even one could say " abused" this attack to implement an aggressive foreign policy, but, to say that the US government has in fact planned and implemented it, is too far fetched and too disgraceful. There is a suggestion that there seems to be a power struggle in Iran, and people close to the Supreme Leader- Ayattolah Khamene-ee- may have made it clear to Ahmadinejad that if there was to be any negotiation, it should be conducted by those close to the Ayattolah and hence, Ahmadinejad could not claim any credit for this. Given this, he decided to subvert the negotiation. As a suggestion, this looks attractive, but I will not buy this. My own take is rather simple. The man is Irrational to his core, hence, do not try to rationalise his behaviour. Judging by what he has been doing and saying in the past five years, he has effectively got away with murders in Iran. Now, he has confused his position inside Iran- where there is no free press, TV, or parties and if anyone dares to question his irrational statements, the para-military Basij will shut them up by brutal force- with the UN assembly. He has been making silly statements at home and almost nothing happened- as no means is left to challenge him or his ministers- and as there were too many empty chairs, he seemed to have assumed that he can get away with this too.
On a serious note, if the negotiation takes place and the " Great Satan" is no longer " great" nor " Satan", how can the Islamic Republic of Iran operates! Who can they blame for their failures and incompetences?

What is going on in Iran?

2010-09-10T18:39:00.000-07:00

Ramin Mehmanparast, the spokeperson of the Foreign Ministry in Iran said in a press conference that one of the imprisoned Americans will be released on Saturday. It was said that one of the Vice Presidents will participate in this ceremony in Saad Abad. In a surprise move, the Public Prosecutor General, Abbad Jafari declared no American is to be released soon and this " news" can not be confirmed by Iran's juridicial authority. This official statement begs the question, what the hell is going on in Iran? Mehmanparast stated however, that it was mainly due to efforts by Ahmadinejad that the woman prisonor was to be released. Let me put my "Dear Uncle Napeloan"* 's hat on, I think, economic sanctions are becoming increasingly more painful and Ahmadinejad tried to show a "friendly" face and gesture to the American- espeically as he will be travelling to New York soon - hopefully to prevent further sanctions to be imposed. But at the same time, the other faction, i.e. led by the Grand Ayattolah Khamene-ii who are either against this flirting with the US or wish to flirt themselves intervened to stop the release and hence, effectively discredited Ahmadinejad's Office.

I am just guessing....

* A character invented by Iran's great satirist Pezhekzad which is nowadays used as a metapher for someone who wishes to explain everything by conspiracy.

More sanctions are coming:

2010-09-10T02:37:00.000-07:00

When South Koreans have introduced sanctions on the Islamic Republic of Iran [ IRI] some in Iran found this very " strange". As far as I see, there is nothing strange about this. Soon others, such as Turkey, China, Russia will join this bandwagon and will introduce sanctions on Iran. The reason for this is simple. Iran is not a major trading partner in the global scale of things and if the US and the EU go to these countries and say " Choose". I know that if I were in their shoes, what my choice will be. Hence, more sanctions on the pipe line and more economic hardship for the people who indeed are the most innocents who have been caught in this cross fire!

"Coincidence of Interests" and the 1953 Coup in Iran

2010-08-19T15:23:00.001-07:00

Fifty seven years ago at this day, the legally elected government of Iran was overthrown by a coup and the Shah who had fled the country, returned triumphantly. Dr Mossadeq- the deposed Prime Minister were put on a show trial and jailed for three years. For the rest of his life, he was effectively under house arrest in a village near Tehran, Ahmadabad and died in 1966. It is true that the idea of a coup was a brain child of the UK- who had lost to Mossadeq in the International Tribunal in the Hague- but the USA, especially the notorious CIA played a very important role in the operation. While it is true the non-Iranians played a very important role in the coup against the PM, I argue that my compatriates, namely some of the elites who did not like Mossadeq's approach to politics were and still are the main culprits. You may ask why I say this? These are my reasons:
- Any one familiar with Iran's modern history knows that politicians in Iran, almost all of them, see a position in the government as a cash cow, i.e. as a means of enriching themselves. There is one exception, though, Dr Mossadeq and his close friends. In the past 57 years, the monarchists- during 1953-1979 and the Islamic Republic's officials, from 1979 up to present, left no stone unturned but could not find a single evidence showing financial corruption by Mossadeq or his close friends in his government. Just compare Mossadeq with those who came after him to see the difference.
- His respect for law was exemplary whether during his tenure as the PM or at any other time. It is well known that when under Reza Shah a law was passed obliging the Iranian males to wear a special hat, called " Pahlavi 's Hat", Mossadeq " imprisoned" himself for 8 or 9 months in his house. When asked why, he replied, this stupid imposition has become a "law", and I do not wish to break it, and at the same time, I have no desire to give in to this super stupid idea!
- His belief in freedom of expression was total. One of the first decree, issued to the chief of the police was " that in Iranian press, whatever people write about me, no matter what or by who, no one should interfere with their freedom". During his term, he maintained this simple rule to the full. It is said that during that two years and 8 months that Mossadeq remained in power, there were at least 70 opposition newspapers, none closed or banned. Again make a comparison with the Shah's time, or with the more recent time in Iran.
-Mossadeq was a real and true patriot who loved Iran and was aware of its desparate needs and did his best to serve them.
Alas! not only the US and UK government did not like them, there were many Iranians who could not live with them either. It is this " coincidence of interests" between these reactionary forces of different descriptions in Iran and their imperialist masters that produced this disgraceful coup. Among my compatriots, those who still support that coup, should face up to the fact that apart from a despotic govenrment that ruled over Iran between 1953-1979, it also paved the way for the emerfence of a new despotism, that calls itself " the Islamic Republic of Iran".

Ahmadinejad: The Gambler

2010-08-11T15:45:00.000-07:00

During recent expensive party that the government has thrown for expatriate Iranians, Mosha-ee who is Ahmadinejad Chief of Staff made a highly controversial speech in which he said " some people criticise me for saying " maktab-e Iran"- School of Iran, instead of " School of Islam". There are different intrepretations of the School of Islam, but our understanding of the truth of Iran and Islam is what I call the School of Iran. From now on we must try to introduce the School of Iran to the rest of the world". Following this, Mosha-ee has been severely attcked by many influencial characters on the top of the pyramid of power in the IRI. Firoozabadi- the Commandar in chief- called it a " treason", as did Tavakkoli- the inlfuencial Terhan MP and most important of all, Mesbah-e Yazdi, the powerful Ayattolah in Qom who has been a stunch supporter of Ahmadinejad and his government. Less fundamentalist politicians, such as Mottaheri, another Tehran MP has also joined the band wagon by attacking Mosha-ee. It seemed that at last, Mosha-ee's days were numbered. But, unwisely in my view, Ahmadinejad has thrown his hat in the ring by defending his speech and suggesting that he agrees with him too and he has full confidence in him. While his government is not practicing it, Ahmadinejad offered a serious defence of " freedom of speech" and suggested that those who diagree with him, could and should criticise and discuss his views rather than using labels and trying to shut him up. It is disgraceful that in the 2010, the basic principle of freedom of speech is so openly challenged by top politicians who are supposed to be defenders of these rights. However, it is ironic too that almost everything in Iran these days assumed a satirical dimension. If this is the right course of action, which it is and I agree with you, Mr Ahmadinejad why you do not practice it yourself? If you are honest in what you say, then, release all these political prisoners who are in jail, because you and your government disagree with their views. This said, it seems to me that Ahamdinejad has gambled here, but it may be a gamble too much!

Reporting on Iran-1

2010-08-08T15:02:00.000-07:00

Tehran Stock Exchange [ TSE] is going crazy. It has broken all records and in the past 4 months, gone up by nearly 5000 points, from around 12000 it is now- on the 8th August- 16606. On the face of it, this is fine. If you have a flourishing economy, then this growth would be reflected in your SE index and pushes it up. In Iran, though, the Governor General of the Central Bank said in a press conference today that in the past 12 months, varioud sectors of the economy experienced different growth rates. Industry, according to the Governor General, grew by 7% while agriculture declined by 12%. The growth rate of Services was 2-3% and Oil sector has fallen by 2%. At the same time, the Statistical Office reported that during the first quater of 1389- i.e. during April, May and June- unemployment rate increased by 3.5% and now stands at 14.6% which is the highest rate since 2005. One reason for this impressive increase in unemployment rate- according to this latest official report, is that responding to poor market conditions, some industries had to lay off workers. If that is true, then the claims made by the Governor General need a pinch of salt to be believed. From other sources we know that textiles industries suffer from a very severe recession, and the same is true on sugar industries. To return to my initial point about the TSE index, if its impressive growth can not be explained by good economic fundamentals, then, there is a very well known name for it, BUBBLE. And bubble, by definition, will burst and it is not so much a question of 'if' but rather 'when'! Tehran Stock Exchange is no exception.

Reporting on Iran-0

2010-08-02T11:38:00.000-07:00

What is going on in Iran? More than a year ago, there was a highly questionable Presidential election the fall out of which is still to be seen in the internal politics of Iran. The economic situation leaves a lot to be desired. The Central Bank claims that inflation is falling, but prices, especially prices of meat and chicken, are going through the roof. Other prices show a similar trends too. The forth resolutions are passed by the UN and the EU and Canada and others pass extra sanctions against the Islamic Republic of Iran. In such a situation, one expects that local politicians would be more cautious as not to add to these problems. But this is Islamic Republic of Iran. A few days ago, Jannati- the Secretary General of the Guardian Council accused Saudi Arabia to have acted as a medium for the transfer of $1 billion from the American government to the opposition leaders in Iran, promising another $50 billion if they succeed in bringing down the government! At the same time, a former editor of a Tehran daily who is now living in exile in an open letter to Khamene-ee compares Jannati’s action to “suicide bombing” which could only lead to deeper isolation of the ISR in the Middle East and a wider world. Ahmadinejad on the other hand, once again claimed that Israel hired assassins to kill him and repeated his call to President Obama for an open debate during his visit to New York in September. Mashaai has also claimed that the Arab nations owe the Iranians a historical debt, as if it was not for the Iranians, Islam would have been buried under tons of illusions originating from Arab nationalism

Trash Economics!

2010-06-03T16:50:00.000-07:00

Hossaini the Iranian Minister for economnic affairs claimed that economic risk in Iran is " zero" for all investors, effectively, there is no risk. I wish he did really understand the meaning and implications of this, because if he did, he would not have made this rather stupid statement. Because,
- As there is no riskless economies in the world, then, owners of capital from the rest of the world should have been sending their capital to Iran.
- As Iran has a dismal record in attracting foreign capital, as confirmed by UNCTAD, we can safely conclude that the minister is talking trash....

The economic policy of Ahmadinejad!

2010-03-30T18:39:00.000-07:00

It is reported from Iran that on the question of subsidies, Ahmadinejad is keen to impose his will on Majlis. If it can not done in the way that he has suggested, it is said that his government will present a mini-budget- over and above the main budget which had just been turned into law to be implemented. The removal of subsidies has two sides: First, subsidies are removed and hence prices will have to rise. Second, some sections of the population would receive a cash subsidy to reduce the impact of government induced inflation. It seems to me that Ahmadinejad is paying lip service to the first part and focuses on the second part. To put it differently, in a strange sort of way, claims that if Majlis allows him to have 40000 Billion tomans income, his government will be able to pay more cash subsidies than a situation in which the income will be only 20000 billion tomans. The main thrust of Ahmadinejad's policy could be summarised as saying that 4 is greater than 2. If his government is allowed to raise 40000 billion tomans by removing subsidies, "the IMF demonstrations" will get out of control. Time would tell.

Job creation - Iranian style!

2010-03-07T12:01:00.000-08:00

Agianst all protests by local politicians, Ali Reza Zakeri who was an advisor to Mr Ahmadinejad during his first term of office, has been appointed as the Governor General of the Province of Isfahan following the rigged elections in June 2009. Since his appointment, he appointed his brother as the chief of security forces in the province, his wife, appointed as an advisor to the Governor General on health issues, One of his brother-in-laws has become another advisor and a second brother-in-law was given the job of research advisor. A further relative was given a similar position. It is claimed that the new Governor General has created more than twenty advisory positions and appointed individuals with no relevant expertise and qualification to these positions.

A new game in Iran!

2010-02-20T18:56:00.000-08:00

I have not written anything in this blog since September 2009. It goes without saying that the reason for my absence was not in any way, because of a shortage of topics to talk about. In fact, especially after the last Presidential "elections", there were so many issues and topics for discussion that it was not easy to choose which topic is more important than others. I have written in my blog in Farsi, for the life of me I did not understand- and still do not- the reason for rigging the elections as the authorities did. The four remaining candidate were all monitered and confirmed by the Guardian Council and all have made their willingness to operate within the Constitutions of the Islamic Republic of Iran [IRI] clear. I reckon that this rigging of the elections has seriously harmed and weakened the IRI. Whatever social capital it had, had been eroded and because of this would have no option but to turn to increasingly more open coersion and suppression. In my view, the "power brokeres" in the IRI instead of learning how to live with a president who may not have been ideal- let us say Mousavi-made a fatal error. They have polarised Iranian society beyond repair. Furthermore, they placed themselves in a cage- having to use more and more force in order to stay in power. Anyone who knows anything about history, would have no doubt how this new game by the IRI would end. As I have started to write again, I will return to this issue soon.
Take care,
Iraj

Is Ahmadinejad safe?

2009-09-07T03:30:00.000-07:00

I have never supported Mr Ahmadinejad's government and do not support him now. Like millions of Iranians I have no doubt in my mind that the elections leading to his re-election was seriously flawed and dangerously stage managed. This said, though I am not in favour of what the Ayatollahs seem to be planning to do from Qom. First read the full story here. I wish to see the end of this illegitimate government sooner rater than later, that is true, but not by a fatwa! If these grand Ayatollahs were really worried about the elections fraud, why most of them have kept a very low profile in the past three months! The appointment of a female minister- irrespective of the intention of Ahmadinejad- was a good thing and if this is the main reason for the collective actions by the Ayatollahs in Qom, this would be a truly sad day for Iran. Had they came out with the millions of Iranian people on the immediate aftermath of the elections, that would have meant differently. Now, few months on, thousands arrested, an unknown number killed and many more tortured and beaten, while all these were happening, the grand Ayatollahs- most of them- kept a disgraceful silence and now, are planning to respond in this way. A fatwa to declare the government illegitimate!
Sirs: You missed the train, not in my name!

A nation at war with herself!

2008-06-27T17:52:00.000-07:00

In an interview with the deputy justice minister, Ali-zadeh, he did reveal a few facts that are interesting. While complaining about justice ministry's annual budget, he said that on average, we have to deal with 8,000,000 cases a year! Assuming that each case, involves two parties, the " accused" and the " suers", this would mean that something like 16 million Iranians are involved in a court activity against one another. Assuming that children can not afford and will not take anyone to court, it implies that a significant proportion of adult Iranians are bogged down in the corridors of this not so efficient ministry. A number of questions:

Why there is such a huge number of cases in the country! On the bases of the above figure, it means that nearly 23 per cent of Iran's population are either accused or are suing someone else in the court.

Is this the modelof a society that Iranian leaders want to " export" to other parts of the world?

What about the economic costs of such a situation in a society which seems to be at war with herself!

If you also consider that there are many occasions in which there would be " public demonstrations" often against imaginary enemies, small wonder that the economy is in such a mess! If such a large percentage is involved in court, or in public demonstration, then, who is producing in this economy!

Why do my fellow countrymen and women blame others for the mess?

Oh! sorry, I forgot, the Iranians have oil and Mr Bush and his friends are doing everything they can to push the price of oil as high as possible. Hence, who needs to produce anything in a country like Iran anyway!

" Natural Rate of Inflation"!

2008-06-22T18:56:00.000-07:00

Mirkazemi the Iranian trade minister has made a new discovery! A few decades ago, some economists invented the term " natural rate of unemployment" but what Mirkazemi seems to have discovered is a " natural rate of inflation" for Iran. He says in this piece the a rate of inflation of up to 49% is " natural"! I have read this piece, but do not understand what is "natural " about a rate that doubles prices in every 20 months!

A plot to kidnap!!

2008-06-20T17:35:00.000-07:00

The Iranian President, Mr Ahmadinejad claimed that during a recent official visit to Iraq, the Americans tried to " kidnap" him! I am not sure if I should laugh or cry to have such a naive and idiot individaul to be the President of my beloved homeland! Not long ago, he travelled to New York and if the Americans had any such plan, it would have been a lot easier to try to kidnap him while he was there! Why do it in Iraq? The story goes that as part of the plan, the "potenital kidnappers" also wanted to transfer him to the US! Once again, it would have been a lot simpler to do it while he was in the US?
I am not sure what else to say! As we say in Iran, "I am melting of shame!!!"

Mafianomics!

2008-04-19T19:02:00.000-07:00

During his visit to the holy city of Qom on the 16th April, President Ahmadinejad[1] delivered a very telling speech. In relation to this speech, there are two possibilities. First, he is actually lying and is trying to use this opportunity as a scapegoat for the failure of his government in the past two and half year. Alternatively, he is telling the truth. Whatever the fact, one could only say: Pity on the Islamic Republic of Iran [IRI] which would soon celebrate its 30th birthday. If the President is so openly lying, it is bad, and if he is telling the truth, it is even ten times worse. Given the summary that the President has given of the economy, it is neither an Islamic economy nor a capitalist system of any description. It is a real example of a system that could only be described as a mafianomics, an economic system at the peril of various mafia-type gangs.
Like most of his recent speeches, he covered so many different and even unrelated issues, but my main concern is that section of the speech which tries to explain the reasons for his failure to achieve justice and a just economic structure. There is one point that I wish to mention in passing. The President believes that the IRI has a dual mission to fulfil. One is to build itself and the other, is “to reform the world”. Given what he says about the situation in the country, the world can rest assured that the IRI would not be able to “reform the world”.
In explaining the underlying reasons for the failure of his government to reduce inequality and create a more just society, Ahmadinejad refers to 5 or 6 factors. In his view, these factors explain this failure and are the “roots of discriminations and class difference”. Let me mention in passing that the class structure of Iranian society has little to do with what he says here. Societies based on the private ownership of the basic means of production are class based and no amount of “reform” would have any serious impact on this aspect. However, the first factor in his list is “licenses and monopolies” enjoyed by some who “were and still are granted these privileges to accumulate massive wealth”. In my view, the admission of the existence of such a situation after nearly thirty years of total control is simply disgraceful. The immediate question must be why nothing has been done to stop it so that a few could not enrich themselves at the expense of the rest of society. It becomes an interesting issue if we also consider that in the past two and half years, the Grand Ayatollah Khamene-ii, the Guardian of the State, on many occasions has very strongly supported the President. The Guardian Council, which played a very destructive role during the eight years of Khatami’s presidency, has supported fully the current government too. Majlis- the Iranian Parliament- went out of his way, some say even against the Constitution, to help the government. The question, hence remains, how then, these groups have been allowed to abuse these privileges for personal enrichment for so long?
The second culprit in Ahmadinejad’s list is the National Custom organisation, according to this speech members of these gangs “penetrated this organisation and pass whatever laws and regulations that they like”. There is no doubt, that these could not be ordinary Iranian citizens, but once again the question is why there is no more information about these “gangs”? He then gives an interesting example and refers to the consumption of cigarettes in Iran, partly produced at home and partly imported from abroad. The President confessed that there is a large smuggling taking place too and his hands are tied to combat them. But he does not give any further information. Nevertheless, he adds that if his government tries to impose custom duties on the imported cigarettes, those who are involved resort to smuggling, and if there were to be no duties, the market would be flooded by imported brands. He then tells the story of his government’s attempt to liberalise the importation of cigarettes into Iran so that any one who is within the law and pays the necessary duties could import them. Interestingly he adds that “someone seemingly a good soul” approached the government seeking permission to import but “a male who is still employed in one of the government’s centres” contact this “good soul” and ask him for “$5 billion” advances to be “allowed to import cigarettes” into the county and went on to say that” unless this sum is paid, you would not be able to import cigarettes. The good soul did not pay”. It is clear that the President has detailed information about the case, but, is not making it publicly available. He goes on to say that even a high official of the government has been threatened by the same male for agreeing to permit others to import cigarettes into the country. What is a confusing puzzle here is the underlying reasons for the impotence of Ahmadinejad’s government to deal with such a clear case of rent seeking behaviour. This point becomes particularly significant if we look at the record of the same government in its dealing with the students, or workers or for that matter woman’s activists in Iran. It seems that the same impotent government faces no restrictions and impotence in arresting, imprisoning and even torturing these activists. The President does not explain why such a brutal act of rent seeking and lawlessness is tolerated by his government. The question begging an answer is why the appropriate authorities were not issued with the necessary warrant to arrest these law beakers and rent seekers? His audience ask him for more revelation, but the President declines and just adds “I have given you his details, just wait for a day or two and see who makes a lot of noises, you would know him”. Why the President instead of being frank with the people of Iran offers a riddle, is not clear to me. The next factor in President’s list is the National State Registry Office which is infiltrated by these “gang members” too. He then reports on one of his conversations with Danesh-Jafari- the Minister for Economic Affairs- about two factories producing the same items and have similar sale revenue but continues” one paid 300 million tomans in tax and another only 3 million tomans” and adds that “ the tax system is being abused by these gang members”.
Ahmadinejad then turns to the banking sector and calls them “agents for injustice” in Iran. Given the massive privatisation programme that the IRI has- following the decree by Khamene-ee in relation to article 44 of the Constitution- it seems a very strange position to take. Among other things, he says “when the bank collected all the deposits, could they disperse them in the way they like! This is discriminatory” and should be stopped. It could be predicted at this stage that if this is the view of the IRI on the banking sector, the capitalists should be really stupid to come forward to buy these banks. Let us remind ourselves that not long ago, the government against the advice of the Central Bank and the Credit and Money Committee, reduced the interest rate- below the inflation rate- and now, the President seems to be indicating further restrictions on the activities of these banks. To cut a long story short, not only interest rate is below the inflation rate by decree, he wants to decide who should be given loans and credits and who should be refused these facilities. As soon as the Credit and Money Committee made its opposition to a forced decline in the interest rate public, the President abolished the Committee altogether. Now in this speech, the President blamed the banking sector for the housing bubble that has been raging in the country by saying that “ certain people” were given enormous amount of credit by the banks which were subsequently used to buy lands and other real estates in order to ”milk the public”. He apologised to the people of Iran and said “I regret to report to you that during the past year, some of the government’s organisations failed in their duties and that corrupt gang succeeded in their endeavour”. In talking about “domestic conspirators” he refers to a “speculator” who was given a 100 billion tomans loan in order to buy houses, flats and lands. In my view, what the President is doing in this speech is not providing information for the public at large for their benefit, but, rather to use these scattered quaisi-information as a scapegoat not to accept any responsibility in having made a bad situation a lot worse. It is clear to me when Ahmadinejad says in this speech that “some people inside the country in conformity with our enemy, tried to break the backbone of this government by sabotage” then, there would be little room for anyone to try to point a finger at his government’s mismanagement of these affairs. In addition to the abolishment of the Credit and Money Committee, Ahmadinejad’s government also abolished the former “Plan and Budget Organisation” not to mention his stated rather crazy views about the basic economic principles. The domestic conspirators are accused to have tried to “create a situation in which inflation would be 70 or 80%”, and then, praises his own government for preventing this to happen, and even claims that his anti- inflationary policy was a “success”! Given this assessment as given by the President, it is clear that there is no room to examine these policies as the major causes of rising inflation in the country which is putting massive pressure on the budget of the households across the land. To convince his audience that what he says about these conspiracies is true, he reveals a little about another meeting in which “it was said that we would break the backbone of this government and would knock him [Ahmadinejad] out. He can do whatever likes, but we control two major institutions, the banks and the oil industry” and then turn to the audience and said “you know who do I have in mind”.
It is not clear to me that if the oil industry is not actually controlled by the government, then, what is left of this mostly unproductive perto capitalist economy of Iran?
In relation to the housing crisis in the country, the President reports that the situation was so bad that the Ministry of Information was given the task of discovering any potential plots and conspiracies and then adds “the Information Minister reported that some banks have given about 1500 billion tomans [more than $1.6 billion] to certain individuals. When the government decided to make a move against them, there were so many hands coming out to support them. When we instructed the Central Bank to monitor the laws on loans, some agents resisted”. I must admit, I am totally lost and do not know what to say. It reveals an incredible degree of impotence by a government that wishes to “reform the world”!
Having said that, I have to conclude that when I put my Iranian hat on and like them becomes a conspiracy worshiper, I believe that there is something else in the subtext and things should not be as simple as the President tries to make them. I can not help it, but it reminds me of the Godfather film and I tend to think that the dispute is over the loot. In my judgement, Ahmadinejad’s approach to these “mafia gangs” in Iran, as he put them, looks more like a cry for asking a bigger share of the loot, rather than being against mafianomics. My main reason for accusing the President of being himself part of the plot is that in the past two and half years, on several occasions, he has given this “ half cooked” stories about mafia gangs in Iran without being transparent or taking any effective actions against them. If you ask me why he is not brutally frank with the people, my answer is simply, he might be afraid of retaliation. If he exposes these gang members in full, what happens, if they try to expose the other gangs too!
Time would tell.
[1] An extended exert of this speech in Farsi could be read in his official cite at http://www.president.ir/fa/.

Cry for help!

2008-04-10T02:19:00.000-07:00

I wonder if you could help! I have always had difficulties in understanding Mr Ahmadinejad’s speeches and now reached a painful point that I think he may not be making these speeches in farsi a language that I love and cherish. Have a look at two versions of his latest speech, and please give a summary of it in farsi or in English so that I could also understand him. Whatever sources you use, the economic situation in the country is getting out of control, and as a cosmetic surgery, his government leaked out that Danesh Jafari- the minister for economic affairs- would be replaced. And yet, in his speeches lately, Ahmadinejad says nothing about these issues. We also know that cash subsidies are to replace the current system and it is reported that cash would be paid into banking accounts of the citizens, initially everyone and then gradually, the middle and high income citizens would be eliminated and this is what seems to be his “grand plan” for the economy! I am aware that some of my Iranian colleagues have already started discussing cash versus non-cash subsidies and came out in favour of cash subsidies. I am too old and too tired to get into this type of discussion. My point, however, is simple, a policy that can not be implemented is not good or bad, it simply does not exist. The institutions and the infrastructure- not to mention the necessary political and social will- for an effective and fair distribution of cash subsidies are not there and hence, this policy like an unwanted foetus in a diseased womb would be terminated, and the body- the economy- would be bleeding for many more years to come. Let me return to my initial point, if anyone understand Mr Ahmadinejad’s speeches, please help me to understand them too.

What a pricture!

2008-03-29T17:35:00.000-07:00

Are we the laziest?

2008-03-23T11:25:00.000-07:00

I am sure that my compatriots would possibly hate me for saying this. But I do not think there is anyone as lazy as us, the Iranians! It is our New Year. Fine, Happy New Year to everyone, but for god's sake, why everything, including the national newspapers, news sites, are closed for two weeks! Does it mean that nothing is going to happen during these two weeks, or, does not matter, or what? I am out of Iran, but, I fear, many offices may be closed too. Later this month, I guess, there would be another week of holiday to " celebrate the success" of Nuclear policy of the government! Who knows, in the following month there may have to be breaks, because the sanction is becoming too tight, hence, factories may not have raw materials to work with! On the other hand, there are several religious holidays to cope with. I wish someone would tell me where else in this planet, they close everything for two weeks in peace time of get off work in this fashion as we do in Iran?
Sorry folks, I had to take this off my chest!

The Shepherd boy's cry for help!

2008-03-20T21:09:00.000-07:00

When Ahmadinejad speaks of a “grand plan for economic transformation”, the Iranian nation should take shelter to minimise the impact! Since coming to power, he has been giving these promises which are not usually kept. The difference being that he is now talking about a “grand plan” which would include measures against “ discrimination”,” inefficiency” “ inefficient distribution of the banking resources”, and also measures to review“ subsidies”, “tax collection” and “ goods distribution”. One wonders apart from paving the way for a big party for the 30th anniversary of the Islamic Revolution next year, what else he has in his sleeves? If all these could be done in one year, by not doing them in the past 29 years; is he saying that the Islamic government has been wasting people’s time and resources?
Let us wait and see when he talks about transformation what he actually means . I do not think he means much, but let us see.

Mr Khatami’s Riddles!

2008-03-13T05:02:00.000-07:00

God bless Mr Khatami! Once again he has proposed[1] riddles to be resolved by the Iranian people. He said, “There is a plan which must be disturbed”. But, the question is what plan, by whom? Who is planning to do what? He immediately added “in whatever way possible we have to disrupt this game”. Once again, what game Mr Khatami? Who are the players and what are their aims and objectives? For the people at large who are being crashed under unprecedented economic hardship, you propose a riddle to be resolved! Unspecified “plan” and “game would not help any one. How can any one disturb a plan, if it is to remain a “secret”! Why do you not face these issues up front and tell the people in no uncertain term what do you think is going on and what you think they should or should not do. Having not resolved the first riddle we come to another, “while submissive, we would mirthfully participate in the elections”. I must admit, I am confused here. I am really confused. If you participate mirthfully, then, why submissive and if you are submissive, how can you be mirthful? If as it has been reported and is confirmed in this speech by Khatami himself, in most of the constituencies the reformist groups have no candidate, how can you be mirthful? He continued, “If Majlis- Iranian Parliament- occupies its true place in the country” and”support the popular participation in these elections, we can prevent swindle!” First and foremost, if elections are not fair and free, how can Majlis occupies its real place in the pyramid of power in the country? And he knows well that elections are not fair and are not planned to be free, given the compulsory process of seeking “consent” from more than one non-elected powerful bodies for the candidates. Furthermore, in a political structure under which one person enjoys absolute power over all the elected bodies, as Velayat-e faghih – the Guardian of the State- does in the Islamic Republic of Iran, what is the real place for a parliament anyway! Has he forgotten the record of the sixth Majlis, which has become totally toothless after a few decrees issued by the faghih! In addition to the Faghih, there is of course the Guardian Council- Shoura-ye negah-ban- and all bills passed through parliament should be approved by the Council to become law and if this un-elected body does not like them, they would simply refuse approval without having to be accountable to anyone. Again the record of sixth majlis is quite clear on this issue too. It seems that Mr Khatami has just woken up from a deep sleep as he says we have to “prevent the return of despotism”! Really! God bless you Sir! Did despotism go anywhere that now, you are afraid that it may return? Are you saying that you are not aware of what are going on in front of your own eyes in the country? The way that university students are being treated, the way that workers are being suppressed. What about women activists! Do you not know all these or do you prefer to ignore them? However, after a little more waffle, Mr Khatami proposes another riddle, to achieve what he has suggested, “It is important to point out that critical press and parties are essential”. Does he not know that neither would be tolerated by the authorities in Iran? It seems that Mr Khatami does not pay attention to what his political colleagues are saying in the country which is a clear indication of what might happen in the near future. However, the Speaker of the House who is not qualified to issue fatwa, has issued one pointing out that “weakening of the government from whatever source, is forbidden and haram”. Anyone who is familiar with Iranian political culture knows the meaning of this “fatwa”, i.e. less tolerance and more arrests to follow. What is worrying is the Speaker, Mr Haddad Adel, is not one of the hard-liners in the authority! As said earlier, Khatami while talking about “mirthful participation” in these elections, also confirmed that “in most constituencies, the reformists cannot compete with others in the elections” as their candidates failed to be approved. Given this situation, how then they can mirthfully participate in an exercise from which they have been barred? What is really disturbing, however, is this that Mr Khatami seems to be incapable of learning from his mistakes. For eight long years, during his two terms presidency, using a very similar language, Mr Khatami offered riddles to the people of Iran, and now, he continues with the same tradition. He encourages the people to be “actively involved” in these elections, and this is despite the fact that he knows full well that the scope for active participation is not available. He has even turned to those candidates who were not approved and, consequently, could not compete in these elections and asked them to be “actively involved and encourage the voters to participate in full”. What I believe it boils down to once again, is Mr Khatami’s attempt to abuse people’s confidence in him to support the main current in the Islamic Republic of Iran which in fact, tolerates him for this very reason. As a kind of carrot that could prepare the situation for the use of the stick. What Mr Khatami does not seem to understand is when the main current with the help of him and other “reformists” like him succeeded in destroying what is left of civil society in Iran by crashing all the civil opposition, then, it would be his turn. Why I say this is linked with the current deep rooted economic crisis for which Mr Ahmadinejad’s government had effectively nothing to offer except populist slogans about nuclear energy. These slogans may have been attractive two years ago, but not any more. In support of this view point, let us consider what Kiyan ersi[2], one of the few remaining reformist candidate said when he was asked which political groups you think would have more support in the elections, the reformists or the fundamentalists? To which he replied, “We are reaching a point that this type of classification is becoming irrelevant. Hunger, economic pressure, problems with housing, problems related to income, eduction, marriage, and jobs would not recognise reformism from fundamentalism”.
In such a situation, active and mirthful participation in these elections is nothing but an act of working towards guaranteeing political legitimacy to those who have brought Iran to its knees. For God’s sake Mr Khatami, please try to be honest with the people of Iran and stop offering these riddles. To overcome these difficult conditions, they need leadership, not riddles.
[1] the speech could be read here, http://www.aftabnews.ir/vdcgqz9akz9xu.html
[2] for further details see, http://tabnak.ir/pages/?cid=7518

A sily game by sily politicians!

2008-03-05T13:42:00.000-08:00

I think it is a part of a litany saying that “ O’ My God, what have you denied those whom you have given them reason, but to those whom you have denied reason, have you given anything worth having ”? It seems to apply to the situation in Iran and especially in relation to the commander in chief of the Islamic Guards, Jafari. A day after the passing of the resolution 1803, he has asked the Iranians to ensure that “ they would export the Islamic Revolution to the rest of the world”. First, an Islamic or an anti-Islamic revolution is not a pair of jeans or underwear to be “exportable”! They tried and tried and they failed and failed. It only took the American " infidals" to topple Saddam in order to " Export the Islamic Revolution to Iraq", save the rest of the world. It did cost a few shillings too! What is most likely to happen- if he is to be taken seriously- is intrusion in the internal affairs of others which in turn, would pave the way and be seen as a permisstion for others to interfere in the internal affairs of Iran! Is this what Genral Jafari wants? His others comments is even more stupid, claiming that the US wants to attack Iran but is frightened to do so! It is true that the US is bogged down so badly in Iraq and in Afghanistan that is most unlikely to embark upon another adventure. My fear, however, is that Iranian political leaders and army officers are stretching it too far and may at the end create an enviornment in which the US would have no other option but to attack. Is this what they want?

Auto-boycotting!

2008-03-02T16:24:00.000-08:00

Haddad Aadel, the speaker of the House, has claimed that Europeans are desperately dependent on the markets in the Muslim world and went on to demand that the Muslims should be thinking to boycott Danish goods as a protest against the "Danish insult" upon Prophet Mohammad. It is ironic that according to him, the most " effective method" to deal with this kind of issues " is economic boycott". This may be so, but it is not clear why he and other Iranian leaders keep claiming that the existing boycott by the US and others against Iran had no effect whatsoever on the economy. Some have even claimed that it has been beneficial, as it encouraged domestic production. This is despite the fact that there is no evidence in support of this claim. On the contrary, all the available evidence seem to show a deterioration of the economic conditions in Iran. It is worth pointing out that Mr Haddad seems unaware of the fact that if any restriction is imposed on a member of the EU, then other members would have to respond and they usually do. When this issue came into the open sometimes ago and the Iranian authority threatened to boycott Danish goods, the EU issued a very strongly worded statement that those restrictions would also " apply" to other members, i..e. Iran would be almost automatically boycotted by the rest of the EU. On that occasion, very quietly the Iranians ignored their own threat and I think, they would do the same this time.

Subsidies, or no subsidies, this is not the question...

2008-02-28T17:18:00.000-08:00

Despite the fact that liquidity in the economy has increased substantially in the past two years, this report claims that many factories are at the point of total closure for not having enough cash to purchase raw materials. It adds that the banking sector refuses to lend them money, hence, private sector is effectively loosing its productive capacity. It is futher revealed that the shortage of raw material is quite serious, 80% and suggests that the government should withdraw sufficient sum from the foreign currency fund and make it available to the private sector, so that this sector could buy the necessary raw materials. I have said this on many occasions that in Iran, we face a very strange situation. For many if the government subsidises the private sector, that would be fine. And yet, it is the same group of people who have deriven everybody mad by their repeated and to a large extend unsubstantiated claims against the government subsidies on petrol, bread, cooking oil, gas etc. In short, what you notice here is an excellent example of double standard...

Total confusion in relation to Petrol in Iran

2008-02-21T10:43:00.000-08:00

It is reported here that Iranian parliament would strongly support free market in petrol and would like to see petrol being supplied via market without any subsidy. I am not aware what happens next that the chief of Majlis Committee on Energy adds that the government sector could pay 500 tomans/ liter for petrol and the same petrol would be offered to the public at large at 250 tomans/liter! This dual pricing does not look to me to be determined by the"free market"! This said, you can read here that the minister for Economic Affairs does appear to be supporting this policy, and believes that supplying petrol via the free market would " fuel inflation" in the economy. He then goes on to add that what the government should do- as we are not able to subsidise petrol any longer- is to try to minimise the impact of freely priced petrol on the rate of inflation. I am not sure what the price of petrol is likely to be when this policy is implemented? Would it be sold at 500 tomans a liter or 250 tomans a liter? If the lower price is the free market set price, then, why others are to be overcharged? If the higher price is the free market set price, and the government cannot subsidise any more, how can this price be halved to 250 tomans for the public at large? The Minister, however, did not explain what these measures are likely to be. Let us just wait and hope that someone from some where, perhaps another planet, would come down and succeed in controlling this seemingly uncontrollable inflationary pressure in Iran. Let us hope and pray!
Amen!!

Poverty in Iran

2008-02-16T19:15:00.000-08:00

It is reported here that official data in Iran speaks of 9 to 10 million of Iranian citizens who live below the absolute poverty line. That is to say, that between 9 to 10 millions of Iranian are unable to eat enough or to benefit from education, housing, and proper clothing. This is the official view and we know from daily experience that Mr Ahmadi-Nejad is very seriousl economical with the truth. However, the real number of those living below the absolute poverty line is estimated by researchers to be anything between 20 to 25 millions. That being 29 to 36% of the population in the country. Well done Mr. President! Well Done! In addition to " nuclear energy", do these people have any other " undeniable rights?"

On the coming Iranian General Elections

2008-02-09T07:09:00.000-08:00

The Supreme Leader has effectively ruled out any abstention in the incoming General Elections in Iran. In a speech he said, “Participation in the Elections is a national duty and this duty will not change by coming to power of this or that political currents”. He continued, “Everybody should feel obliged to participate and in this process do not try to find any excuses”. I reckon that following this speech, the Reformists are unlikely to boycott the Elections. What I think is likely to happen is that some of the " disqualified candidates" -the more acceptable ones- would be allowed to participate and the reformists leaders would then jump up and down claiming that now, the elections is " competitive", hence, no justification for not participating. To this, I could say that an elections should be first, " legal", and, " free" and if these coniditions were met, it would automatically be " competitive". I am not sure if Iranian elections satisfy these conditions. But what do you expect from the reformist leaders in Iran anyway! It seems that they are not concerned about the legality or fairness of the elections, so long as their " shares" are respected, then, it would be fine. But, obviously, it would not.

In The Land of Lion and the Sun....

2008-02-07T17:01:00.000-08:00

It seems to me that there is a race in Iran among the politicians and other commentators to see who can make a bigger fool of himself. Alireza Afshar, the chief of Election Monitoring Committee- the body in charge of disqualifying candidates for the forthcoming General Elections- complained that the press in Iran enjoys "excessive freedom" and some of " those who had been disqualified" abuse this " excessive freedom"! He went on to say that this issue must be looked into....To be honest with you I do not know what he is talking about. Apart from those newspapers which are 110% pro government, there is hardly any press left to have too much freedom! One wonders if he is really talking about Iran....

Economics vs jokes!!

2008-02-06T09:20:00.000-08:00

I don't know about you, but, I am beginning to give up reading the views of my fellow Iranians about econoimc issues. These are becoming increasingly more difficult to digest and understand. Saeed Lylaz claims that in the coming year, imports into Iran would increase unemployment by 6.5 million! Yes you read it fine, 6.5 million! It is not clear to me whether this "prediction" is based on his own research or on research done by others. He says that for every $1 billion imports, unemployment would rise by 100,000, but, does not say, how, or why? Or who says this! For the sake of argument, if imports consist of raw materials for Iranian industries, why should this relationship be valid? Alternatively, he should be able to show that everything which is being imported, is actually replacing domestic production. On the other hand, if you divid the economy into traded and not traded sectors, clearly the untraded sector is unlikely to be affected by imports as suggested by Lylaz and further, I am not even sure, if 6.5 million are working in the traded sector in Iran to be made redundant now! So the puzzle continues...
Setting these points aside, if his claims are to be taken seriously, there must be massive closures in Iran. Is this happening? I am not sure. There are many problems at home, and there is no point in denying them. But, can we turn the innocent subject of economics into a joke, as he seems to have done here? Or because we disagree with President Ahamdi Nejad, are we allowed to twist facts in this way. I don't think so. What do you think?
I hope that if anyone in Iran read these lines, would help me out. God! please help! I am getting more and more confused.

Grand Ayattola's misguided advice!

2008-01-27T15:05:00.001-08:00

Grand Ayattola Noori Hamadani accused the State TV and Radio stations of promoting riba in Iran. He said there are many “good economic” text books about interest-free- banking but their “ teachings” are not applied by decision makers in the IRI. In his view, reporting the bank rates by the TV and Radio stations is actually an indication of promoting riba by these means. Sometimes ago, he added, there were some talk about reducing these rates, and a few steps were taken, but regretably this process came to an abrupt end. He said extending poverty is not part of our Islamic ideology and added that he hopes that by mine utilisation and better use of uncultivated lands and more efficient use of forests and seas “ poverty would be eliminated” from Iran. In his view, the real cause of poverty is the payment and receipt of riba. This said, however, it is not clear how could you remove interest in an economy where the annual inflation rate, while variously estimated, is certainly more than 20%? Those steps that Noori Hamadani referred to, have led, inter alia, to a flood of liquidity to land and real estates and purchase of gold and foreign assets, pushing their prices up. The house price inflation which has become unbearable for many, is mainly due to unwise intervention of the state in the banking sector. It would have been nice to see that people like Noori Hamadani instead of encouraging this type of harmful intervention, would choose to support the government and the Central Bank of Iran .

Mr Government: Stay out please....

2008-01-23T06:45:00.000-08:00

I am not sure if I understand why ministers in Iran are not serious people! Let me explain. If you follow what they say, in most cases, it is almost impossible to take them seriously. For instance, the Minister for Industry and Mines advised car makers in Iran that " try to export your products". In view of " massive investment" in this industry, the government and people have " a special expectation"- in terms of increasing exports and acquiring new markets. So far, this is fine, but the Minister must know, that exports would not increase by decree from this or any other governments. Your product must have certain advantages to be demanded or wanted by global consumers. It may be price, or it may be better quality, or a combination of both. In the case of Iranian cars, let us be honest about it, these cars can not compete with cars available in the world market. From what one reads in the press, these are not reliable, and not fuel efficient and furthermore, they are pricy- given these attributes, quite expensive. Apart from these reports in the press, the reaction of Iranian consumers is my evidence for this, i.e. whenever they can, they prefer not to buy the local produce. At one level, in a shortage economy like Iran, paying lip service to quality may be expected, but, at the same time, if Iran is to move out of its current economic mess, there in no other way. The quality of what is produced here must improve. There must be specific programmes and political will to improve quality. Given what has happened in Iranian economy in the past 50 years, if not longer, could I say, Mr Government, could you please stay out of this!
I shall express my views on what should be done in other posts, for the time being, thank you for reading this piece. What do you think?

Gloves are off in Iran!

2008-01-19T15:56:00.000-08:00

Roohani, the current chief of Strategic Research at the " Majma-e Tashkhis-e Maslehat", in a blistering attack on Ahmadi Nejad- without naming him- said, " what is a greater sin? A female not covering her hairs fully, or giving false statistics to the nation?" and went on to say, " what is worse, if a Muslim fails to fast during the month of Ramezan, or, if the affairs of the Islamic Government be left in hands of those who have no qualification and right to be in these high positions?" In another religious gathering, Ayattolah Tavassoli went one step further and claimed that " views of Imam Khomaini" are being falsified for factional interests. He did not name anyone either, but, it is clear which group of people he had in mind. It has also been reported that Mr Ahmadi Nejad wrote a "harsh letter" to the Speaker of Iranian Parliament, Haddad Aadel, in which, he is said to have attacked the MP's for their comments and criticisms of his government. In his recent TV appearance, Ahmadi Nejad claimed that Majlis was " responsible" for rising inflation in the country and in due course, a large number of MP's responded negatively to his claims. In this " harsh letter", the text of which has not been released, the President is quoted as having claimed that the MP's interfere too much into the affairs of the Executive branch of the IRI.
Time would tell what more is likely to be revealed. By the look of it, it seems that gloves are off, or, are coming off.

Let us pray for an end of Petro$ in Iran!

2008-01-15T09:15:00.000-08:00

An Iranian economist argues here that the Iranian government does not understand the causes of inflation. In another piece, he accuses the government to have increased the scale of poverty in the country. Another Iranian scholar argued here that despite all the claims by the government, it has no idea about how to reduce inequality and spread justice. Professor Taghavi suggested here that government programmes for job creation have been a total failure. He compares and contrasts the economies of Iran and Korea and concludes that a drastic change in the direction of the economy is needed. A Member of Parliament, Alikhani goes a little further and says that inflation could not be controlled by “command”, “ as it is the government which is fuelling inflationary pressure in the economy”. The Housing Minister, however, reveals “government’s programmes” to combat house price inflation by declaring that the “government would no longer participate in new house building” but, would only “ guide, support and regulate” house building in the country. Returning to the question of comparing Iran with Korea, it should be pointed out that Korea has followed an export-led growth model and developed while Iran has been and still is bogged down with a consumption-led supplied by imports models which is financed by Petro dollars which is effectively destroying the productive basis of the economy. Given what one can see in Iran these days, there does not appear to be any light at the end of the tunnel. One can only hope for either an end of oil or a collapse in the oil price in the international market.

Crisis of legitimacy in Iran

2008-01-11T16:56:00.000-08:00

I have not written anything here for many months. To be honest with you, I do not know why! Obviously, I was busy, who is not, but that will not explain this. Whatever the reason, I will try to be more active.
Just a few points:
The next general elections are underway and already a number of parties have decided not to participate. One such party, The Movement for Freedom [ Nehzat-e Azadi] [MF] has even asked for international observers to oversee the elections. On the other hand, form the grand Ayattolah, Khamene-ee to other members of the government and even Ministers in the former President Khatami's government attacked MF and claimed that Iranian people would not accept this. I have no means of knowing if that is the case. What I do know, however, is this, if they have nothing to hide, why are they afraid of International observers? Would it not be better for the IRI to have this endorsement, i.e. international observers confirming that these elections were free and fair. I fear that as in the past, we would have the general elections, but that would not be free or fair, and hence, the crisis of legitimacy would continue.
In the past few days, Iran suffered a serious Cold rush! Surprisingly though, the government has closed down the economy in order to save gas and electricity and yet, PoorMohammadi, the Interior Minister claimed that " Crisis management" is far more advanced in Iran than in the US or in Europe!
You can read an interesting piece here, in which it is said that about $14 billion of " oil revenue" is not accounted for!
Other evidence seems to show that this sum is more likely to be larger. I will return to this in my future posts.
I offer my sincere apologies for my inactivity in the past several months.

Stop playing with fire!

2007-04-25T05:36:00.000-07:00

Against the advice of the Iranian Money and Credit Council, President Ahmadinejad has decided to reduce the interest rate. While further details are not yet available, but it seems likely that the rate would fall by another 2%. It should be said that this further reduction is happening against rising inflation rate. That in turn, would imply that the real rate of interest would move further into negative. There would be a number of implications:
- The saving rate is likely to fall further.
- If saving and depositing in a bank is not rewarding enough, this is likely to fuel transactions in real estate and lands. Hence further rises in the price of houses are most likely. An already critical situation would become more critical.
- It would also encourage capital flight, i.e. those who have surplus money would decide to take their money out of the economy altogether.
- On the positive side, however, borrowing becomes more attractive. Some argue that this could encourage investment in the economy. I do not share this view. I think that the main underlying reason for insufficient investment in the economy, is high political risk and that is unlikely to be changed be this fall.
In short, this playing with fire, while causing damages to the supply side of the credit market in Iran, is unlikely to encourage investment.
One can only hope and pray, that the fragile financial system of the IRI would not collape altogether.
My link does not work, you can read about Ahmadinejad's decision at:
http://www.farsnews.com/newstext.php?nn=8602050405

What a Presidential Visit!

2007-04-20T19:18:00.000-07:00

Have a look at these pictures and guess what is going on!

They are certainly not criminals behind bars, they seem to be only women and children. Further, what is this army officer doing with this child? Is he pulling him out or pushing him trhough?

Does not really matter.These pictures have been taken during the President's recent trip to Fars, and these unfortunate people has come to say "welcome" to him. But they are not being treated very nicely, are they?

You might say, what do you expect, it is Iran. But, NO....NO.... I am an Iranian and I do not understand what the hell is going on there.

A sick humour!

2007-04-19T18:30:00.001-07:00

Humour is a good thing, but bad humour is sickening. One would expect that "mature" individuals would not resort to sick humour. It seems however, some people no matter at what age, but they never mature. Read this and see the film attached to it. I wonder how many would fine this funny! Funny! you must be joking! It is sickening....

Virgina Tech Tragedy.

2007-04-17T05:07:00.000-07:00

What a shocking tragedy! Being a university lecturere myself, I cannot find words to express my deep sadness of this huge loss of innocent lives. For obvious reasons, the TV news are dominated by this and I was just watching the Sky news. To my absolute amazement I learnt that on average 80 Americans a day die in the shooting incidences and yet, the majority of the American citizens seems to be against any effective gun control! It seems to me to be so strange and a strongly illogical position to take. Just pick up your pocket calculator and you will see that given this average number of daily death, 2400 per month, and 29200 Americans die per year . This is almost equal to 10 atrocities that bewildered the world on the 11 September 2003! How come that the American people and administration embarked upon a highly aggressive foreign policy in response to one 9/11 and seem to be doing almost nothing for nealy 10 such atrocities per year, every year! Undoubtedly the Constitutions should be respected, but is the law for the good of the great American poeple, or should the country suffer this enormous loss of life supposedly to protect this part of the Constitution?
Could you please help me to understand.

A lamp for your house, not for the local mosque....

2007-04-04T07:27:00.000-07:00

In an unexpected move the Iranian President has ordered the release of British sailors. Whatever the underlying reasons, I am pleased that these young officers are released and can return to their families or to their posts. Let us hope that in similar situations, the political leaders would act in a similar fashion. The point that needs to be emphasised, however, is why Mr Ahmadinejad does not show a similar approach to many Iranian citizens who are improsined without any justifiable reason. The latest of these imprisoned citizens are the members of one million signitures campaign group who were arrested in the Laale park in Tehran. If one is to take this new move seriously, the President needs to be brave enough to tackle these issues too. Otherwise, it would be right to conclude that what he did, may have been a damage limitation exercise, rather than a manifestation of what he has claimed, " Islamic fairness". If this move is an indication of your "Islamic fairness", Mr President, as we say in Farsi, " a lamp fit for your house, should not be fitted in the local mosque".....Apply it to Iranian prisoners too.

No FT, No comment!!!

2007-04-01T17:08:00.000-07:00

Just have a look at these pictures! These are some of the "Iranian university students" demonstrating outside the British Embassy in Tehran this morning!!

I say....the future is bright.... The Iranians are really keen to add to their " human capital"!

Who is telling the truth?

2007-03-29T17:08:00.000-07:00

As time goes, the Anglo-Iranian conflict becomes more complex and silly. The British seem to have no doubt that the Iranians have snatched their navy personnel while they were performing their duties under a UN mandate in Iraqi water. On the other hand, the Iranian authorities have maintained that the British forces have violated their sovereignty and hence, should apologize. The British says, over our dead body, release our boys and girt, or face the consequences. No one knows what might these "consequences" be if the Iranians do not release them. However, it is interesting to note that the British authorities have failed to obtain the support of the US in the UN for a strong condemnation of Iran or for a demand for the immediate release of these personnel and that, in my mind, may reveal the real story behind this silly dispute. Could it mean that the Iranians are in fact telling the truth? The British have actually been in the Iranian waters, but, are not prepared to accept it. What is interesting however is that the British TV and press today were full of stories about these "barbaric" Iranians who have even refused consular access to these British citizens, and none, however, mentioned the fact that the five Iranians who had been arrested by the US, still in detention in an unknown location, had been denied this right too since their arrest. It seems that we mey be dealing with a tit for tat situation. However as far the reporting ot this conflict goes, it appears that in the eyes of these writers and broadcasters, all are equal but some are a little more equal. This said, from other sources, we know that the US is busy with quite a lot of secret missions inside Iran- probably in preparation for military attacks- and hence, the Iranians are a little sensitive to this type of intrusion into their country. Another reason that might shift the argument in favour of the Iranians position is this, if the British sailors were doing their duties on the Iraqi side of the water border, as we are told by the British government and in fact, been snatched by the Iranians, why then their supporting carriers, HMS Cornwall did not intervene to prevent their seizure by the Iranians? Could it be that given a potential violation by these sailors, it would have been an open declaration of war against Iran. In view of this, the HMS Cornwall did nothing, because the British has already discovered at an enormous costs what of fool they made of themselves by going into Iraq and Afghanistan! Iran is a far greater country, and much better organised. Whatever the real situation, I really hope that these personnel are released without further delay and returned to their families and friends. I am sick and tired of politicians of whatever colour and flag. The hell with the lot of them. It seems to me that they can only make life more difficult for everybody, and I really mean everybody.

Iran & the EU sanctions!

2007-03-28T06:10:00.001-07:00

While the Iranian Information Minister in a press conference referred to a “psychological war” by the West against Iran, it was also reported that an Iranian bank, Bank-e Sepah- has stopped its dealings in foreign currency. Until further notice this bank would not issue any LC’s and would not conduct any other international activities. The minister had issued threats against the “internal forces” helping the “ enemy”, but did not clarify further. A top official in the Central Bank has stated that his bank had taken the necessary steps to deal with the “threat”, however, he did not spell out what these measures were likely to be. It was, however, revealed that the Central Bank has also stopped using the US dollars in its dealings. In addition to Bank-e Sepah, Bank-e Saderat has also been black listed by the US. What is worrying, however, is the fact that Iran and its financial sector seems to be totally unprepared to deal with the fall outs of the eminent EU sanctions. If the structural weakness of the economy is also considered, I fear that a lot sooner than many people believe, economic sanctions would break the back bone of Iran. As it is always the case, the heavy price at the end would be paid by the people of Iran. This is what really, really angers me.

Iran and the UN.

2007-03-23T19:05:00.000-07:00

News from Tehran indicate that President Ahmadinejad would not be able to attend the Security Council meeting of the UN. An internet source close to Mr Reza-ee the former commander of the Islamic Guards has said that the US has deliberately delayed the visa so that Mr Ahmadinejad would not be able to attend the meeting. As someone who was not so keen about this visit, I am pleased that he would not attending. Judging by his recent speeches, I was not sure if he would not make things even worse for Iran. Mr Ahmadinejad has said recently that he would like to offer new suggestions to address the dispute. If that was the main reason for his plan to attend, the Iranian representative in the UN could very well convey the message. I can only hope that both sides come to their senses and find a diplomatic solution for the stand off. The other day, the Supreme Leader, had mada a very inflamatory speech in Mashhad. To say that what the Security Council does in "illegal", and if they continue with this "illegality", we would also resort to "illegal"acts, was not very wise in my view. This type of statement plays very well in the hands of those who wish to embark upon another military adventure in the Middle East, no matter the cost, both in terms of greenbacks or body bags.

With a "President" like this, who needs an enemy?

2007-03-19T17:43:00.000-07:00

President Ahmadnejad is quoted as having said: “The western countries and superpowers have said that they wish to isolate the Iranian nation. What is your position in the world to wish to isolate the Iranian nation? In fact, the Iranian nation has isolated you”.
Does anyone understand what he is trying to say? What does he mean by saying that Iran has isolated the rest of the world? What is the literal meaning of the term “isolation” in English or its equivalent in farsi " monzavi kardan"? Can a single country isolate many? Or it is always, that “many” who isolate a single country?
Furthermore, if that is the case, why on earth he is planning to go to New York? Does he want to bring them out of “isolation”, or, generally speaking, what he wishes to do there?
I am really, really frightened.
I am almost sure that he makes things a lot worse.
With a President like this, do the Iranian nations need any enemy?

President Robin Hood!!

2007-03-16T05:55:00.000-07:00

In the last two years, Mr Ahmadinejad have travelled extensively inside Iran. At the time of writing, he and members of his cabinet are in the province of Yazd. What they do in these trips is not very clear to me. Wherever he goes, he makes speeches in which he would insists that Iran would not negotiate on her right to have nuclear energy ane every now and then have a go at Israel too. He would also have his cabinet meetings in these provincial cities and comes up with massive amount of financial commitments for the state. For instance, during this current tirp, it was revealed that they have considered and made decisions on110 projects. For most, and in some cases very very exensive ones, no figure was given, but on thost where a figure was attached, the sum comes to a little over 11 trillion rials!
There are two issues here:
- Given the overall tendency of the IR to privatise everything in the economy- ie. the review of Article 44- it seems inconsistent that Ahmadinejad is committing the state to expand in this way.
- Either this budget is already allocated and confirmed by Majlis [Parliament], or, these are new monies. In the first case, it is totally deceitful to reannounce them again. On the other hand, if these are new monies, then, I can only say, God save Iran.
I do not think anyone else can.

Foreign Direct Investment in Iran.

2007-03-14T11:26:00.001-07:00

An Iranian minister said that " newspapers frighten off foreign direct investors from Iran". It is not the first time that ministers make this type of silly comment. Sometimes ago, the official spokeman of the President, blamed newspapers for " growing inflation". As to this new claim, it should be said that foreign direct investors are not coming to Iran, because the economy of Iran is not governed by the law of the land. Frankly, there are too many law breakers in Iran at the various, including the top levels of governmet. There are too many "centres" for decision making. There is no free and fair election, be it for parliament or for Tehran Chamber of Commerce. In short, it has a " capitalist" exchange relations with a " pre-capitalist" political structure. This will not do. Unless this vital inconsisteny is resolved, I am afraid to say that foreign direct investors would not come to Iran.

I.... the superman....

2007-03-11T06:17:00.000-07:00

If I ever had any doubt, I don't have it now that Mr Ahmadinejad is confused and do not understand international politics. The spokeman for his government informed the public that when the UN sit to discuss the question of Iranian Nuclear programme, he would like to attend the meeting to " defend the national interest of Iran". As a cheap propaganda, it is fine, but in the real world, Mr Ahmadnejad or any such leader should be invited to attend by the members- and he does not have that invitation- and if such invitation is not forthcoming, it is most likely that the US may refuse issuing visa for him to visit New York. Just imagine, the "Iron" president of the Islamic Republic of Iran,wishes to " conquer" New York, and the equally " Iron" president of the United State, says, " nay"....
It would be fun to watch....
p.s: put yourself in the shoes of Iranian diplomats, who are supposed to attend these meetings to defend the national interest. The president seems to be saying, sit aside, I , the superman, is coming!!!

When a government becomes nervous....

2007-03-04T18:09:00.000-08:00

News from home are particularly worrying. The brutal arrest of 33 women activists in Tehran-very close to the 8th March- is a clear signal that the government is nervous and somewhat confused. The UN may come up with another resolution and more economic sanctions and given the dire economic situation in the country, more sanctions would be especially painful. On the other hand, the internal quarrels are getting out of hand. Mrs Rajabi the wife of Dr Elham- a cabinet minister- in her latest article launched an " undiplomatic" attack on the chief of Iranian national TV and Radio- directly appointed by Mr Khameni-ee. While at the same time, in another case, a member of parliament, who is usually critical of the President, has been summoned to appear in court,accused of " subversion". In another recent piece, Mrs Rajabi has effectively confirmed everything that the opposition has been saying all these years about the Islamic Republic of Iran. The level of corruption and nepotism that she confirms in this piece, leaves little room for optimism by the supporters of the regime. However, the nervousness of the government is a real cause for concern. As government when nervous becomes a lot more irrational and even brutal and oppressive.
You might say, come on Iraj, this government is oppressive enough, and it cannot become more oppressive.
I beg to differ. To me, while there is no limit to the good side of human nature, the horrible side of it has no limit either. And, this is why, I am so frightened of what might happen in my beloved home land.
I wish I knew what to do to help the situation?

I am more confused!!

2007-02-21T07:30:00.000-08:00

The situation in Iran is getting funnier by the day. The President is saying one thing, and the Iranian chief negotiator- Dr Larijani- is saying something different. On the other hand, the BBC goes out of its way by publishing a detailed plan of military attack on Iran by the US and little later, the Pentagon calls the plan a myth. I don't know about you, but, I am more confused now that ever about the situation and I do not know who to trust and believe.
One thing is certain in my mind, any military action against Iran- whatever the context- would be a major disaster for the global economy. Not only it would destry Iran, but, could also lead to further destruction for a lot of other people, including the Americans for many many years to come. I hope and pray that those who have the power, would use it a little more responsibly.

"The wretched of the earth"!

2007-02-08T06:23:00.000-08:00

I have read in an Iranian source, that the US administration has increased its allocated budget for the " extension of democracy in Iran" for the coming year. I have also read this in a source, rather close to the Islamic government in Iran. Putting these two together, I can only say this:
Dear Mr Bush:
I beg you to stop this ineffective and nonsencial policy. Stop providing further ammunitions for the government in Iran. Please stop turning us into an easy pray for this government which does not respect our basic human rights. Please do not " export" democracy to Iran or any other country in this planet. A lot of things could be exported, but, not democracy. Do not you know this! If you do really mean it, stop the " exportation" of your means of suppresion, be it " instruments for crowd control", bombers, tank spare parts, etc or, computer soft wares to control the way we, "the wretched of the earth" think and write. Instruct your corporations, like Google, not to give in to suppressive governments, as they did in China. We do know that " freedom" is good, and " democracy" is fantastic, but we also know, that neither of the two are "exportable". We already carry too heavy a burden on our back, if you can not help us to reduce the burden, do not add to it.

Iran-US and the Threat of War:

2007-02-04T07:34:00.001-08:00

I was in a party last night, an old friend who I have not seen for many years asked me about my views on Iran-US stand off. He said, by the way Iraj, do you think that the US or Israel would attack Iran? This is one of those 60 millon dollars questions that everyboy has his or her answer for it, and most likely, none of these answers is the correct answer for this vital question. At one level, I think that the US is not in a position to open up another front, as they are already in very deep trouble in Iraq and Afghanistan. I reckon that the US administration must be truly mad to take further burden. At the same time, though, I think that the US have reached a point that it badly need a scapegoat to divert attention from its disastrouns invasion of Iraq- if that takes another invasion, so be it. While this option may be likely, I think the invasion of Iran may be too big for the US to swollow and it could prove to be really disastrous for the US economy and her prestige-if any left in the world.
I am not revealing any secret to say, that if Iran is attacked, the government is likely to take these options:
- Trying to block the Straigh of Hormoz, hence, creating a massive oil shortage.
- To make sure that the supply of oil would remain disrupted, using all its military power to destry the oil industries in Saudi Arabia and other Persian Gulf states.
Would they attack Israel? I doubt it. Would Israel attack Iran? I doubt it too. Iran is not Iraq and the method used against Iraq in the 1980s would not work.The Iranian authority could very easily use their influences over the Hezv-ol-lah and Hamas to unsettle an already unstable situation in the Middle East. They could also make Iraq evey more unstable, not to mention about other options that they have. Furthermore, given his election defeat, Mr Bush has also his hands tied behind his back.
Overall, in my view, the situation is highly risky. You know what, this situation does not need too many fools to get out of control. One or two fools could do enough.

"A Genre in the Service of Empire"

2007-02-01T05:17:00.000-08:00

Interested in serious articles on Middle East and the West! A powerful and mind-opening discussion is offered under the above heading here.
Have a look and please tell me what do you think?

Three Iranian women's rights activists arrested!

2007-01-28T16:05:00.000-08:00

Tala't Taghinia, Mansoureh Shojaie, and Farnaz Seify, women's rights activists, journalists, and members of the Women's Cultural Center, were arrested at Imam Khomeini Airport in Tehran, while trying to leave the country to attend a journalism training session in New Delhi, India. After their arrest, security forces escorted the three activists to their homes, where their personal belongings, such as their books, computers and computer cases, were searched and seized. Having searched their homes, these three activists were transferred to Evin Prison, 209th Ward.

I condemn the arrest of these human rights activists and call upon the government to release them immediately.

STOP ARBITRARY ARRESTS IN IRAN:

Would the US attack Iran?

2007-01-24T09:51:00.000-08:00

The situation in Iran is really confusing. Mr Ahmadinejad, the President, in his most recent interview, is quoted as saying that “ I have no worries about the future of Iran. Why should I be concerned?”
In another part of his interview, he said, “the Americans are not in a position to attack Iran. They wish to put pressure on Iran and cause problems for us, but, they would fail”.
His foreign minister, Mr Mottaki, however informed the Iranian MP’s that “the American threat is serious and far from being just a psychological warfare and propaganda”. Mr Rafsanjani has added a new dimension by saying that in a recent meeting with Mr Khameneh-ee, someone said that the threat was not serious, but, the leader added, “No, you are wrong, the threat is serious indeed”.
I tend to share this view that Mr Ahmadinejad is wrong here. His reasoning is simply dangerous, i.e. saying that the Americans are bogged down in Iraq, hence, would not attack is a dangerous oversimplification. As a matter of fact, following his own reasoning, for that very reason, it is potentially feasible that in order to divert attention from the mess in Iraq, the American administration may decide to open a new front by attacking Iran.
This said, I hope that I am wrong and the issue would be settled through diplomacy and negotiation.

It is a mad, mad time....

2007-01-17T08:10:00.000-08:00

It is a mad, mad, mad time! While a serious econoimc crisis is in the making in Iran, Iran's President, Mr Ahmadinejad is touring Latin America and wishes to contribute to an anti-imperilist fund with his Venezuelan counterpart. Is this really needed or is it being set up for publicity purporse? In my judgement, the best anti-imperilist policy that developing countries should have, is a serious fight against corruption, a genuine attempt to get rid of all instruments of suppression and allow and encourage free expression of opinion and individual freedom, so that a larger proportion of the inhabitants could have and feel a sense of belonging. To put it differently, give the public at large something that is worth defending and they would defend it. Slogans can not and will not do.
What is amazing, however, is that a deeply religious President- Ahmadnejad of Iran- seems to be happily " in bed" with the " godless" Latin American Presidents, be it Fidel Castro, or Chavez or Moralis... I wonder what do they talk about? Do they talk about religion or life after death?
In Iran, however, there seems to be serious concern about his economic management, about the disastrous dependence of the Iranian state on the oil money, especially as the oil market seems to be heading towards a nose dive! Obviously, dependency on oil is nothing new in the modern history of Iran, but, its depth is in fact, new. On the other hand, Rafsanjani's latest outburst is important too. He has openly- without naming anyone of course- launched a serious attack on the economic policy of Ahmadinejad. We will have to wait his return from this trip, to see how his supporters would respond. Is it the beginning of a " cold civil war" in Iran? Who knows!
I can only finish by saying that I am worried. Really worried about Iran, its economy and its overall health, not to mention, the continuous threat by the USA.

Wise words!

2007-01-10T06:47:00.000-08:00

“ A person who spent his life to deceit others, has fooled himself. What a
fool this person must be, who sacrifices such a great gift for such a naïve and
small reward”

Nimayoushich,

Iranian poet

We are all equal! Equal in being checked!!

2007-01-08T06:52:00.000-08:00

The supreme leader of the Islamic Republic of Iran in a speech in Qom- today- has effectively ruled out any compromise on Iran’s stand off with the rest of world on nuclear issues. As anticipated, he has also criticised the UN resolution against Iran, saying that it would be ineffective and should not deter Iran. In relation to Iran’s Arab neighbours, he warned them not to take side with the West against Iran. What is, however, interesting is the full text of the speech has not been published, only an edited version, a summary of the actual speech. I have checked a number of Iranian sources- all official and semi-official- I noticed that the text which is published is identical in all these sources. The moral of the story is that all these different sources- Ilna, Irna, Isna, Baztab, Mehr, Aftab, Entekhab- just to name a few, have the same “ editor in chief”!!
Do you think that this “ editor in chief” has just sent a text- the same text- to these “ sub-editors” and asked them to “ publish and do not alter”, or what? It is just an accident!! [I am joking of course!]
I am beginning to think, in such a case, what is the point of publishing exactly the same text in seven different web sites! Obviously, when the exact words as used in the speech are published, one would get the same text everywhere, but that does not apply in this case. Somebody who has listened to the speech, or had access to the tape, sat down somewhere and wrote this text. What a lovely system! We are all equal, and some are not more equal!
Equal in being controlled and checked all the time!

A letter that is 110 years old!

2007-01-05T15:58:00.000-08:00

This is a letter written by Naser-ed-Din Shah in his own hand writing, to his ambassador in London. This Shah ruled over Iran for nearly 50 years- between 1848-1896, and was assassinated in 1896 by a single bullet. This is a note he wrote to his ambassador about five months before his assassination:

“Agha Hassan* had no permission to travel to Europe. I do not know if you have issued him any. Anyway, he should be returned to Iran immediately. It is really, really bad if ordinary Iranians could travel to Europe like this. If travelling is not stopped, then, they would go in their tens of thousands and that would be truly disastrous”

*an ordinary Iranian

Was the Shah clever or stupid?
What do you think?

Iran's external trading imbalance:

2007-01-04T18:48:00.000-08:00

According to the latest available data, imports into Iran in the first 9 months of 1385 [2006/07] exceeded $30 billion while the total value of non-oil exports was only $11.5 billion. This would give an annual trade deficits of nearly $26 billion [oil excluded]. While Iran earned $486 per ton for her exports, the equivalent figure for her imports was more than $996. It was also stated that $ earned per exported ton has declined as compared with the same period last year. The Custom Department has added that as compared with the same period last year, the value of Iran’s non oil exports has increased by 41.7 per cent, a point not missed by the Trade minister who claimed that in five years time, Iran is likely to turn trade deficit into a surplus. If this could be done, it would be a major achievement, but, a closer look at the composition of Iran non-oil exports suggests that it is unlikely to materialise. Petrochemical products account for nearly 40% of the non-oil exports, and more importantly, nearly 79% of the share of Petrochemical products belongs to Gas. To put it differently, the “ real” value of “ non-oil” exports is likely to be around $7 billion and not $11.5 billion as claimed by the official data.

On the Petro-economy of Iran

2007-01-03T18:52:00.000-08:00

While on the surface, this cat and mouce game between Iran and the West continues, deep down, I am extremely worried about the economic situation in Iran. It is ture that ever since 1980, the US imposed economic sanctions against Iran, but, during all these years, others have been trading happily with the new regime. When the current UN sanctions become operational, I fear that it could cause the complete collapse of the economy. I am aware that the price of oil may be rising, but, I see this as the root of Iran's economic problem rather than a solutions for its problems. I would like to be optimistic, but I cann't. The petro-economy of Iran is too dependent on the oil money, too dependent for my taste! In the last year of so, almost every economic indicator has been moving in a wrong direction. The officials, of course, continue to tell positive stories about the rising volumes of transactions in numerous stock markets that have been created in various towns and cities in Iran. But, on the job front, and especially, on inflation, the situation is truly frightening. In an unexpected move, one of the vice-Presidents of Iran revealed that the lowest 20% of the population are so poor that they can only afford to buy bread, and at best, bread and yoghurt. In another piece, an Iranian academic claimed that 10 million Iranians live in absolute poverty, and another 10 to 20 million suffer from relative poverty. At the same time, we also know that prices of basic necessities of life are rising very rapidly. It is undoubtedly true that the UN economic sanctions, could only intensify this underlying inflationary pressure. And if the Oil money dries up or reduce daramatically, the economy would have no option but to collapse.

On Death penalty in Iraq

2006-12-26T19:26:00.000-08:00

It was reported today that Saddam Hossein, the former Iraqi dictator has lost his appeal against the death penalty that was issued against him. As a person who believes that the death penalty has no justification whatso ever- no matter what is the crime- I do hope that despite his crimes, he would not be hanged. I totally oppose his hanging. I am aware that some Iranians would love to see him hanged for his crimes against Iran during Iraq-Iran war of the 1980s. I have no doubt that he committed crimes against humanity in iran- as in elsewhere, but, still, I can not and will not support his death penalty. Hanging him, would not help any one, it can only make the situation in Iraq a lot worse. First, the people in Iraq deserves to be given a new beginning, a beginning free from " legalised murder"- that is what death penalty is in my view. Second, would Saddam's hanging serve any prupose or solve any problems? I do not think so. It could be argued that it would surely further destabilise an already fragile situation and would turn Iraq into a bloodier blood bath.
My suggestion would be to send him into exile to a remote island and watch him die.

I am back!

2006-12-25T18:53:00.000-08:00

I am really pleased to be able to update this blog. I know it looks silly, but, I had forgatten my password and username for this blog and in addition was busy with other things too. Hence, could not create new posts. Earlier today, I decided to "invest" a little of my time to try to recover this blog. And I am pleased that at the end, it was a lot easier than I imagined.
But, there are many things that I wish to write about them.
In the Middle East, I am absolutely amazed that if you wanted to "plan" it to go this bad, you would have probably failed. But somehow, President Bush and PM Blair succeeded in creating a situation in Iraq- for instance- that whatever you do now, would be wrong. If the troops are withdrawn now, that would be wrong. If the troops continue to stay, it would be even more wrong. I suggest that somekind of an international prize be established to be awarded to Bush and Blair, for creating such a massive mess in Iraq!
In relation to Iran, after months- or even years of " negotiations, the UN has at last decided to introduce sanctions against Iran unless, it agrees to stop its enrichment programme. Whether this would be effective, remains to be seen, but, I wonder, why the UN does not tackle other "nuclear powers" in the region? On the other hand, the authority in Tehran stated that they would in fact, speed up their programmes. I hope that common sense would prevail before it is too late.
Last but not least, may I take this opportunity of wishing everybody a very merry Christmas and a very happy New Year.

"Privatisation" in Iran!

2006-07-12T13:36:00.000-07:00

A little while ago, I posted a short piece on the Iranian command economy. During the last few days, there have been other developments in Iran too. The supreme leader issued a decree, paving the way for a massive " privatisation" programme in Iran. If you look at Iranian papers, you sould see articles after articles, calling it a historical decision, which would change the face of the country*. Up to 80% of the state enterprises- with a few exceptions- should be sold off to the private sector. I did a little exercise though. Obviously, this policy is not new in the country, it has been going on for a while. At the time of writing, we have an estimate of the total value of the state assets to be sold off, roughly $110 billion. On the other hand, if you were to take the annual average value of assets sold off in the period between 1991-2006 to the private sector and stimulate it forward, the completion of this project would take 535 years! As someone who is not so keen on the privatisation programme, I am glad that I would be gone by then!!

* I am old enough to remember that the late Shah also used to issue " historical decrees" too! What a coincidence!

The famous Iranian carpets!!!

2006-06-03T09:03:00.000-07:00

" In a carpet factory [in Kerman] the owner was showing the work of an expert little weaver of five to a visitor. The visitor asked what the child's daily wage amounted to for such beautiful work. When he heard the small sum he asked if it was possible for her to live on it. ' No, of course ', was the reply,' but, she is only an orphan'"

The Women's leader, Friday, August 18,1922.

Just imagine....

2006-05-13T17:21:00.000-07:00

If you can spare a few minutes, just visit:
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=364x1062761
and then imagine that this is happening in Tehran, or, in Cairo....
The speaker would be taken out and shot....
But, here in the US, the situation is different. While I remain critical of US foreign policy, and even its economic structure, resembling a mixture of 17th and 22th centuries, I can only admire this aspect of the US system, and I do. I think this is what makes the US political structure so strong and powerful. The strength of the system comes from this and similar freedoms and certianly not from the bombs or the marines....
My dear American friends, make sure that you keep up this good work! This is just great! Do you really blame me if I tell you that I feel enious! I really wish that we had this too!

FED we will be watching you!

2006-05-12T04:40:00.000-07:00

If you have a few minutes to spare, go to this address:
http://www0.gsb.columbia.edu/students/organizations/follies/media/EveryBreath.wmv
You wouldn't regret it.

Globalisation....

2006-05-10T05:09:00.000-07:00

In order to examine the implications of globalisation, let us first look at the problems faced by the global economy. We would then examine how helpful this process is likely to be to address these problems.
Generally speaking, I would like to suggest that effective working of the global economy should include policies or mechanisms to address the following five interrelated problems;
1 - “ Marx problem”: The problem of labour discipline. That is to say that the capitalists should ensure that workers work hard enough to maintain the profitability of capitalist production.
2 - “ Keynes problem”: The problem of effective demand. That is; the ability of capitalists to find markets for their products.
3 - “ Minsky problem”: The problem of financial stability. To ensure that markets are stable enough to prevent bankruptcies, financial panics, debt deflation and depression .
4 - “ Kalecki problem”: The problem of competition. The ability of capitalists to maintain high enough profit margin in the face of domestic and foreign competition.
5 - “ Gramsci problem”: The problem of hegemony. This concerns the necessity to form a political bloc which is coherent and co-operative enough to manage the global economic and political system.

Looking at these problems would be the subject matter of my future posts, but, in the meantime, I would appreciate it if you could kindly share your views on them with me:
What do you think about them?
Do you support this approach to examine the global economy, if not, please tell me why?
More importantly, what is your alternative approach?

An Iranian " Command Economy"!

2006-05-09T10:52:00.000-07:00

People like me who have studied economics, were a little puzzled when Iranian parliament[Majles] decided to instruct the government [the Central Bank] to regularly reduce the interest rate in Iran until, it become a single digit. I have learnt that Majles has come up with another noble idea, asking the government to ensure that inflation rate would become single digit too. If anything and everything could be reduced in this way, i.e. by issuing " command", may I beg the honourable members of Majles to pay special attention to the following:
-Although I don't know what the actual unemployment rate is, it is most likely to be double digit. Could we have a single digit unemployment rate please!
- During the last financial year, Iran trade deficits with the rest of the world was about $32 billion. That is too high. Let us make it a single digit deficit.
- The number of people killed on Iranian raods is the highest in the world. Please issue the appropiate " command" to reduce it too.
- Drug usage in the economy is a real problem, the latest figure that I read, gives something between 2 to 3 million adicts in the country. Could you not issue a command to lower this?
-The head of a research centre in Tehran has said that the overall performance of the economy during last year was very good. Among other things, he mentioned that liquidity has increased by nearly 35% in one year! Could we have a single digit growth rate please....
What else could I say?
God bless you ladies and gentlemen! Go on.... issue more commands..... There are still a lot to be done to create a prosperous economy....

Don't befriend an elephant keeper.....

2006-05-05T10:29:00.000-07:00

It seems to me that many in Iran have been convinced that the best way forward is to go for an all out free market economy. Some of the stories that have been told were truly “stories”, but, the important point is that they have been believed. That is fine with me, despite the fact that I do not share this view. What is disturbing, however, is the confusion that exists on the implementation of these policies. It seems to me that while policy makers have been convinced that this is the way forward, but, at the same time, they do not like some of its outcomes. Not long ago, there was a lot of debate on labour contract in Iran, and some claimed- not fully justified though- that labour laws in Iran were not “firm friendly” and gave workers “too many rights”! I must admit that I have never checked myself to see if that was true. But what I have noticed recently is a prominent clergy in Mashhad declared “temporary labour contracts” to be “illegal in Islam”. Again, I must make my position clear, that I can not confirm if that is the case. What I do know however, is the current confused situation in Iran has the faults of all systems and the benefits of none. To put it differently, my Dear Sirs: please make up your mind. If you want to go for a free market economy, at least, do it properly and don’t zigzag. On the other hand, if you really do not like these outcomes, then, devise appropriate policies to go with your expectations. We have a saying in Iran, which is appropriate here. Either don’t befriend an elephant keeper, or, if you do, build a house that could accommodate an elephant!

Why MNEs do not invest in Iran?

2006-05-04T08:03:00.000-07:00

In the past 13 years- since 1993- Iran received $11.2 billion foreign direct investment which gives an annual average of about $860 million. For an economy of the size of Iran, with more than 70 million people and all its fantastic potential, this is disgraceful. In trying to understand the root cause of this miserable achievement, we could, of course, continue blaming the “evil” forces! The US, the EU and what you like. But the fact of the matter is that in Iran, political risk is too high and from academic research, we know that multinational companies would not invest in a situation where this risk is seen to be too high. We need to improve the functioning of the state in Iran. We need to prepare proper legal framework for the protection of private property, for the enforcement of the law of contract. If we wish to impress others to invest their money in Iran, we need to convince them that we have a law governed political system. Life and property and individual rights are well defined and legally and forcefully protected. I am afraid we do not have such a system. Our own assessment of the situation does not really matter. We the Iranians may be used to seeing journalists are arrested, or university professors disappear upon their return to Iran. This type of events, which sadly continues to happen in Iran, gives the worst kind of signals to foreign investors. You can give them 100% ownership rights, you could also convince them that they could repatriate 100% of their profits from Iran, but before either of these two happening, you have to convince them that in the process of coming to Iran, and trying to make that profit- to be repatriated later- they are safe. Their workers and managers are safe and have well defined rights that are protected in the legal system of the country.
The question remains, have we done that?
No.
Small wonder that despite enormous economic opportunities that investing in Iran offers, foreign firms are ignoring Iran as if it is not there.

A look at outsourcing

2006-05-03T02:33:00.000-07:00

In my other blog, I wrote a short piece on the increasing dispaity of income in the West, and my colleague Ahmad, did a similar piece on the same issue. In this post, I wish to take this issue a little further.
It could be said that one source of increasing poverty in the rich economies is the way in which the labour market is being adjusted under global pressure. It is broadly argued that demand for skilled labour is rising leading to higher wages, whereas demand for unskilled, and semi-skilled workers is falling. The result of which is a fall in the real wages earned by these groups of workers.
However, it is this fall in demand for unskilled and semi-skilled labour which explains greater wage disparity. It is further asserted that the speed of technological change combined with reduced opportunity for retraining de-skills an increasingly larger segment of the labour force, especially at the lower end of the skill ladder. To put it differently, in relative term, the distribution of workers between these groups is changing too. Combining these two, we have the following situation.
In the first diagram above:
The initial situation is given by:
OS supply of skilled labour working at OE, its share of total value created is given by OebS
SO’ Supply of unskilled labour, working at O’w, its share is given by O’waS
Under pressure from globalisation: SS’ is de-skilled.
Demand for skilled labour increases from D to D1, but demand for unskilled workers fall to d1.
Under the new situation:
OS’ Skilled labour, working at Oh, its share OhcS’
Unskilled labour increased by SS’, demand fell to d1.
O’S’ Unskilled labour, working at O’q, its share S’vqO’
Here comes outsourcing.
Methaphorically speaking, O’q is too high, and at least, some of these jobs are outsourced. We would face the following situation [ in the second diagram].
In this situation, S’S’’ represents unemployment among the unskilled and semi-skilled. In the above, I am assuming the skilled labour will not be out-sourced.
The question is, outsourcing maintains production but reduces further the size of the market as those who replace these unskilled Western workers are paid a fraction of their wages. What would be the implications of this type of relocation in the global, should be the subject of another post.

The economics of idleness.

2006-05-01T09:30:00.000-07:00

The official spoke man of the IRI has said that following a decree by the President, various branches of the government are obliged to “saturate the market with articles of clothing which are consistent with Iranian culture”!! In another piece, the chief of the police stated that “13 large importing networks of inappropriate articles of clothing” have been smashed and added that in the next few days, further information would be made available about others.
We have a saying in Iran, that when barbers have no customers, to bear idleness, they start cutting one another’s hair. It seems that the President has completely mixed up issues with non-issues! It is a pity that a government that is at odds with the rest of the world, instead of focusing on issues of international significance, is wasting resources on issues that are not its damned business. The same people, who could develop nuclear technology, are mature enough to decide what to wear.
I believe that it is an insult to the people in Iran that their government thinks that it is fit to decided what cloth is appropriate for them and what is not.
What do you think?

A short true story!

2006-04-30T18:23:00.000-07:00

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!

2006-04-25T11:07:00.000-07:00

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?

2006-04-22T20:10:00.000-07:00

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?

2006-04-21T15:58:00.000-07:00

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!

2006-04-18T20:22:00.000-07:00

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?

2006-04-16T21:07:00.000-07:00

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!

2006-04-12T08:36:00.000-07:00

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!

2006-04-06T19:31:00.000-07:00

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!

Refrandum or no refrandum, this is the question:

2006-03-22T08:47:00.000-08:00

In a trip to Mashhad during the Iranian New Year, the supreme leader of the Islamic Republic of Iran, Ayatol-lah Khamenei, issued a challenge to the West. Replying to the claim that Iran is being isolated, he said, " let us have a refrandum in the world of Islam to see who is more popular? Mr Bush, or Mr Ahmadinejad?" and went on to say" if you are not afraid of its disgraceful result, let us have this refrandum".
I have no idea if anyone in the West would take this issue seriously enough even to reply. But, what I do know, however, is this. About 70% of Iran's population are under 30 years old and have had no say in deciding the shape of the Iranian state. As Mr Khamenei seems so keen about refrandum to settle disagreement, could I suggest Sir, if you yourself are not afraid of "its disgraceful resutl", why do you not issue a decree to have one in Iran! I promise and give you my words, that if 51% of those who participate support your style of government, I would become one of your " devotees"!!

Akbar Ganji

2006-03-19T16:46:00.000-08:00

This is Akbar Ganji, an Iranian political prisoner, just released from prison after six long years!
What did he do?
Did he rub any bank?
No.
Did he damage anyone's property?
No.
He had a pen and he wrote, and wrote, and wrote.
His story should be told and retold.
Some Iranians claim that Akbar " was" one of them! but, the fact of the matter is, if he remained one of them, he would not have been jailed for six long years! He would not have been tortured. By a good guess, he is about half his weight, a very long hunger strike while in prison, had almost killed him. But, it is good to see him alive, and it is good to see him free. It is encouraging that after all these years, to see him full of life. I wish you Mr Ganji all the best for the future and I wish you and your family, a very happy New Year! Welcome back, nice to see you Sir!

A disturbing picture:

2006-03-19T13:15:00.000-08:00

Baztab, a news site alleged to be close to Reza’ee the former chief of Pasdaran, and the current secretary to the Arbitration Council in a recent piece offered a disturbing picture of for the Islamic Republic of Iran.
According to Baztab, in a survey in 11 Iranian universities, 78% of the students believe that the national politicians are involved in economic activities for personal gains. 86% consider the Iranian political system deeply corrupt and 76% of the students believe that the system is biased in favour of the rich. Only 15% of the students agree that Majlis, the government, and Law enforcing agencies are truly fighting against rent seeking and financial corruption. Only 17% believe that the legal system in the country is just, and 76% asserted that members of parliaments do not protect national interests. 85% of the students believe that Iranian politicians are more concerned about their own luxurious life style than serving the people.

Iran & US to negotiate.

2006-03-16T05:39:00.000-08:00

If the news is reliable, the US has requested to negotiate with Iran on issues relating to Iraq and the Iranians have agreed to this request. It is good news for two reasons:
- The situation in Iraq is becoming a little too serious and the sooner a solution is found the better.
- Let us hope that this will not be the only issue that the two sides would start negotiating about. I hope that this experiment would lead to some confidence building on both sides and, they would start to negotiate on other issues of mutual concern too. To me as an Iranian, it looks silly that Iran does not have any diplomatic relationship with the US. At the same time, I think it is silly too that the US policy makers seem to think that they could have peace in the Middle East without effective participation of the Islamic Republic of Iran. The sooner both sides realise this simple fact and take a more pragmatic view of life, the better for both nations and for the rest of the Middle East.

All are equal, but, some are more equal...

2006-03-09T15:45:00.000-08:00

Let me start by saying that I am against all weapon systems. Let me also add that as an Iranian I felt ashamed when Iran's President expressed a desire to" wipe out" Israel. I am also ashamed that a peaceful demonstration on the occasion of 8th March in Tehran, was attacked by thugs supported by the state. But, having said all that, let me also tell you that Mr Bush and Mr Blair are not that different from those who rule over Iran.
Both, are not telling the truth to their people. Both have an agenda different from the one they claim to have.
Commonality between the two sides goes much further:
Bush received his "instruction" from God to destroy Iraq, and Blair calls himself a "Christian", standing to be judged by God! In Iran, there is a holy government too!I am not a religious person, nor do I know much about Christianity or any other religions, but can someone who lies so openly, be a Christian or for that matter, a Muslim? Furthermore, is double standard acceptabe in any religioun? I said that I am against all weapon systems, but, if an allegation that Iran is planning for the bomb, " is dangerous for the world peace", how come that the real and kicking nuclear bombs in Israel and Pakistan are not seen by these " peace loving" leaders! Do they not exist? Or, shut up... these people are our friend!!
Am I missing something here?

Two mad men....

2006-03-08T10:49:00.000-08:00

The stand off between Tehran and Washington is becoming increasingly more dangerous for the whole world. To me it does not matter, whether the American youth is killed in the battle ground, or whether it is Iranian wedding that would be bombed by the US plane- as they have bombed in Iraq and Afghanistan! I would mourn them both. To me, life is the most valuable possession of human being and no one, I repeat, no one, has the right to waste it in this way. Thinking about this, it reminds me of an Iranian saying that a mad man drops a stone into a well, and hundred wisemen could not take it out. What we have got here, is two mad men, one is in the White House and another, is in Tehran. The rest of us, have been caught up in cross fires between the two! While I am 100% against any weapon system, nuclear or conventional, but can not escape the fact that the mad man in Washington is using bullying tactics. At the same time, the mad man in Tehran, in my view, is focusing all his attention on nuclear power in order to divert attention from some serious problem that the Iranian economy is facing or soon would face. Had he had gone for solar energy- that is plentiful in Iran- it would be environment- friendly as well as not giving the mad man in Washington the excuse to bully.
What can I do here, except to write and nag!

Freedom in Iran!!

2006-03-03T07:24:00.000-08:00

Given what is going on in Iran, this statement by the Speaker of the Iranian Parliament- Haddad Aadel- is a little rich: “Those who wish to serve the people would never have any problem with the free flow of information. Only corrupt people would have anything against the Free press and free expression”. These are fine words, but, why a government of which Mr Aadel is one of its main politicians is curtailing freedom and free press!
This said, the question then is, why the Islamic Republic of Iran is spending a huge sum of money to filter the Internet, and why have they closed down more than 120 newspapers in the last 3 years! Why there is a large number of Iranians in prison for simply expressing their opinion?

What a naive logic!!

2006-02-25T08:19:00.000-08:00

Mr Mottaki, Iran’s foreign minister said: “time is running out for the West to build Iranian nation’s confidence”. You have not heard this Iranian short story perhaps, but, a person who was barred from entering into a village, kept asking about the headman’s home address, so that- if he entered- he could stay in! This logic, I think, is behind Mr Mottaki’s statement. With the exception of Syria, Cuba and Venezuela, no body else seems to have any confidence in Iran, hence Mr Mottaki pretends that the ball is in someone else’s court!

An open letter to Dr. Rice:

2006-02-22T09:30:00.000-08:00

Dear Dr Rice:
While watching the News tonight, I heard that you have asked for $75million to help “bring about democracy in Iran”. If you ask me, to be brutally frank with you, you would not be helping Iran, but would further subvert the cause of democracy in the Middle East. That is what it is Dear Dr Rice. Why do you want to do that? My immediate response to the news, as an Iranian, was that democracy is not a pair of jeans and it is not exportable. Furthermore, I say please hands off Iran. As someone who has lived most of his life in the UK, I wonder why American policy makers have lost their abilities to learn from their own mistakes. Why Dr Rice, you never learn! If your plan is agreed, this will be the best “gift” that you can offer to the Fundamentalists who rule over Iran. As soon as this budget is confirmed, the Islamic Republic of Iran would find an “excuse”- as if they needed one- to intensify suppression in Iran under the banner of the dissidents being under the payroll of the US administration. If they were to do this- I have no doubt that this will be the outcome of your policy- I am asking you - an expert in diplomacy- under international laws could anyone, blame them? For argument sake, suppose the Iranian government decided to finance Islamic religious groups in the USA, how would you react? Would you welcome it, or, would you try to stop it? Why do you think, other governments- just because you disagree with them- do not recognise their own interests and would fail to act accordingly? Furthermore, I say to you, for God’s sake do not listen to the “Iranian oppositions” abroad, especially those in the USA who are encouraging you even to invade Iran. These people are not your friends nor are they friends of Iran or the Iranians. Remember what happened to you when you listened too much to the oppositions to Saddam Hussein. Remember what they told you about the situation in Iraq. Now consider the mess that you are in there. Believe me you, Iran as a much more complicated place, much larger, more populous would be a far greater mess. You must know that the Islamic Republic, while not very popular, is not Saddam’s regime. If you have learnt nothing after having wasted hundreds of billion dollars and thousands of young and old American and Iraqi lives, then, there must be something seriously wrong with your rationality. As an Iranian who loves his country, I am begging you not to intervene in the internal affairs of Iran. What you plan to do is a clear violation of international law, and if you do it, how can you stop others from doing the same? If you really wish to help the cause of democracy in Iran, stop this disgraceful policy of allocating money to bring about regime change in another country, be it Iran or any other country. This policy has failed and would fail again. I am telling you, Dear Dr Rice, you would only be helping the regime, and nobody else. Is that what you want?
You must know by now that your disastrous policy in Iraq and Afghanistan had only one winner, and that winner, is the Islamic Republic of Iran. Can you not see this? Do not be fooled by oversimplified analysis of some of your advisors, including your ambassador in Iraq, who claimed tonight “a free and democratic Iraq would de-stabilise Iran” [Newsnight, 20th Feb 06]. No, it will not. Iran can only change by the efforts of its own people. If you cannot help, please do not make their struggle more difficult. That is what you would be doing if you continue with this policy of intervention. If you really want to help:
- Make sure that Google, Microsoft and other American big corporations would not help the regime in Tehran to filter the Internet.
- Make sure that sophisticated technology to control the Internet would not reach Iran.
- Not only in words, in your deeds too, respect human rights across the globe. Frankly, with all these revelations coming out every day, you are not helping the cause of democracy at all. This latest step, believe me you, is another step in the wrong direction.
Most respectfully

A puzzle: Is it a puzzle?

2006-02-21T08:56:00.000-08:00

Look at these facts and tell me what you think:
“ In Iranian Parliament, the minimum salary for those at work, and retired had been set at 200.000 tomans [ about $219]”
“ The head of Economic commission in the parliament, set the minimum wage for the workers in the coming year at 163000 tomans [ $178]”. But, the head of Islamic Trade Unions of Iran confirmed that the official poverty line in the country is defined at a monthly income of 300.000 tomans [$328] or below.
Hence, only god knows how many millions of Iranians live below the official poverty line?
And, yet, let us go on and spend and spend and spend to get a bomb!

Why this blog?

2006-02-21T04:21:00.000-08:00

For the past two years, I have been blogging on Iran in farsi. Coming across the idea put forward by a fellow blogger, i.e. to write bilingually, I decided to create this blog and to write about my beloved country, IRAN, in English. For abvious reasons, I am concerned about the future of my country and what might happen to it, if things get really out of control, and wish to make my tiny, and very small contribution to a better understanding of this lovely country and its lovely people. I know from experience that there is a lot to ignorance about my country and my people in the West, and recent events, particularly in Tehran, did not help the situation. I think, the time has come for Iranians like me to speak out.I would be delighted to read your comments, or answer any question that you might have about Iran and its culture. I do not promise that I can answer all questions, or can give you sufficient answers. I do promise though that I would do my best. I also promise to be honest and truthful with you as I honestly think that our time, seems to be suffering from a serious " honesty deficit" syndrom!!
Love and respect
Iraj Seyf