Helia Ighani's Blog

Talk of Tehran: The Tumbling Economy

October 31, 2012 | 12:14pm

Helia Ighani

Iran’s media is increasingly outspoken about the troubled economy, but newspapers are deeply divided over who is at fault. Editorials have become even sharper since new E.U. sanctions on Iran’s national oil, tanker, and gas companies were imposed in October.

Tehran now faces the worst financial crisis since the 1980-1988 Iran-Iraq War. In October 2012, the International Energy Agency reported that exports dropped significantly from 2.2 million barrels per day at the end of 2011 to 860,000 barrels per day in September 2012. Iran’s oil industry accounts for around 80 percent of its exports.

The national currency dropped 80 percent in value against the dollar in 2012, with a 40 percent plunge in September alone. Iranian financial analysts criticized the Central Bank’s handling of the country’s soaring inflation rate. Official statements pegged September’s inflation rate at 24 percent, but foreign analysts said the October’s inflation rate could be as high as 50 percent to 70 percent. Tehran’s Grand Bazaar shut down temporarily in early October 2012 after public demonstrations over risings costs.

Both liberal and centrist media criticized the government’s failure to provide tangible solutions to the growing economic crisis. On October 17, conservative parliamentarian Kazem Jalali even suggested that the government should “not write off internal mismanagement as the cause of sanctions.”

Media Faults Government

Kaleme (or “Word,” a reformist newspaper)

“The drop in the national currency’s value could undoubtedly lead to the collapse of the economy. If this problem is not solved, the situation could get out of control.” October 10

“A lack of government preparation to deal with sanctions is increasingly evident.” October 8

“The most severe new sanctions on Iran are the same kind that destroyed Iraq’s economy…The present economic crisis is intolerable and could get worse.” October 15

Mardom Salari (or “Democracy,” a centrist newspaper)

“During the Iran-Iraq War, the government was able to provide basic necessities. Our country is now at the height of political and economic power in the region, yet the government is unable to provide basic necessities due to economic mismanagement.” October 23

Media Faults the U.N. and the West

Khorasan News (region in northeastern Iran, a conservative newspaper)

“The enemies of this nation impose harsh conditions and continue to implement tougher sanctions! The bullying by Iran’s enemies is despicable. They still believe political pressure and economic sanctions will cripple the nation and bring it to its knees.” October 23

Jomhouri Eslami (or “Islamic Republic,” a conservative newspaper)

“Western sanctions against Iran are based on unsubstantiated claims about the peaceful nature of its nuclear program. Regarding oil, the international trade embargo is having an impact on the rest of the world too.” October 18

Resalat (or “Prophecy,” a conservative newspaper)

“Despite more E.U. sanctions, the Islamic Republic of Iran has found alternative sources of trade to keep the economy active…The West wants to tempt us with materialism, and it downplays Iran’s economic strength. October 16

Key to Iranian newspapers

Jomhouri Eslami or “Islamic Republic”: conservative

Kaleme or “Word”: reformist

Khorasan News, a region in northeastern Iran: conservative

Mardom Salari or “Democracy”: centrist

Resalat or “Prophecy”: conservative

Click here to read September 2012’s Talk of Tehran.

Helia Ighani is a researcher in the Middle East program at the Woodrow Wilson International Center for Scholars.

Blame Game on Currency Crisis

October 9, 2012 | 5:00pm

Helia Ighani

Iran’s currency crisis has sparked deep divisions inside the regime. Top officials have blamed others in the Tehran government for mismanagement and irresponsible fiscal policies. The regime has countered by citing international sanctions for a role in the biggest economic crisis since the 1979 revolution.

On October 5, Tehran’s legendary bazaar closed temporarily after the rial plummeted by 40 percent in a week. Iran’s currency had already halved in value over the previous year. The panic sparked public protests near the bazaar. The EU will also consider additional sanctions on Iran at an October 15 meeting.

The following are excerpts of the rival groups’ responses to the mounting economic crisis.

Blaming the West

President Mahmoud Ahmadinejad

“Right now in terms of the budget we are under pressure…in many places the budget has become zero or has been cut by 25 percent.” October 9
“They lie when they say sanctions are pressure on the government…sanctions are always a pressure on nations… It's a rock that the enemy has thrown. So what we should do? We should pick up the rock and throw it at them.” October 3

“We are not people to retreat on the nuclear issue. If somebody thinks they can pressure Iran, they are certainly wrong and they must correct their behavior.” October 2

Supreme Leader Ayatollah Ali Khamenei

“The thought that the cause of the arrogant front’s enmity towards Iran is adopting certain stances or making certain decisions is wrong…The cause of all these pressures is the Iranian nation’s independent position and not bowing to the hegemonic system…despite international sanctions, the Islamic Republic has become stronger…
“During the last 33 years, the Islamic Republic of Iran has been faced with a wide range of different political, security, military and economic pressure and sanctions, but the Iranian nation has defused these pressures and even grown more powerful through its resistance… The Iranian nation has and will never surrender to pressures and this has made the enemy furious.” October 3

Foreign Minister Ali Akbar Salehi

“It’s not a big deal. The sanctions create inconveniences. For over 30 years now, we have been living with boycott measures that ultimately make us independent and strong… The Iranian society is used to living with hardships – perhaps more so than people in Spain and Greece. We can count on the patience of our people. What about you in Europe?” October 8, in an interview with a German newspaper, Der Spiegel

Ayatollah Ahmad Khatami, a member of the Assembly of Experts

“The pressure today imposed on us by the world arrogance [the United States] is full-fledged economic war… This pressure will not last. Our people have been tested and they will not be worn down. Our people will ensure they [the enemies] are the ones worn down...
“If the enemy acts stupidly and starts another war in the Persian Gulf, our response to the stupidity of the enemy and its allies will be so decisive that they will not have the chance to regret it... We do not want [to see] a flood of thousands of American soldiers going home from the Persian Gulf in coffins.” October 5, in a speech at the weekly Muslim prayers in Tehran

Blaming the Regime

Speaker of Parliament Ali Larijani
“80 percent of our economy’s issues and problems relate to management and incidentally the error imagined by Westerners is that because of sanctions they can provoke turbulence in our economy.” October 2

Ayatollah Ahmad Khatami, a member of the Assembly of Experts

“Some of the pressure we see emanates from sanctions... mismanagement should not go unnoticed… The only path to solve these problems is cooperation between officials and the people…” October 5, in a speech at the weekly Muslim prayers in Tehran

Minister of Industries and Business Mehdi Ghazanfari

“We have greater expectations that the security services will control the branches and sources of disruption in the exchange market. Brokers in the market are also pursuing the increase in price, because for them it will be profitable, and there is nobody to control them.” October 2, as reported by Fars News Agency

Ayatollah Seyed Yousef Tabatabai Nejad, the Supreme Leader’s representative in Isfahan
“In my view only a small percentage of the economic problems and inflation is related to the enemy sanctions and the main reason is the erroneous economic policies…” October 5

Ayatollah Ahmad al Hoda, member of the Assembly of Experts from Mashhad

“The day you took the votes.... did you know this country and its people are revolutionary? If you knew that you can't confront these problems and crises but told people you can, you have undoubtedly betrayed their rights.” October 5

Ezzatollah Yousefian, an Iranian legislator

“The first approach today is that authorities accept their mistakes and failures, second, that they not blame their mistakes on others, and third, that they invite all the pundits and experts to find a way to solve the problems of the economy.” September 29

Helia Ighani is a researcher in the Middle East program at the Woodrow Wilson International Center for Scholars.

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Tags: Currency, Economy, Iran, Iran Politics, Rial, Sanctions

Talk of Tehran: Squabbling over the Economy

September 24, 2012 | 1:46pm

Helia Ighani

The hottest topic in Tehran’s media—and society generally—is the Islamic Republic’s deeply troubled economy. Over the past 12 months, the national currency has lost half of its value. Despite Iran’s vast oil and gas reserves, youth unemployment has hit 28.6 percent. Officially, inflation is up from 22.5 percent in 2011 to 25 percent in 2012, although experts contend it may be twice as high, according to the Financial Times. Many Iranian men hold down two jobs, and women increasingly work too.

With no relief in sight, the blame game is now playing out in the opinion pages of major newspapers, especially over responsibility for the plunging value of the Iranian rial on exchange markets. Some media blame the government for mismanagement, corruption and unrealistic practices. “It is a blunder on the part of the government if it believes that it can do whatever it likes,” scolded Mardom Salari, a centrist newspaper.

But the regime and its media allies blame the outside world, especially punitive sanctions, for crippling the economy. On August 23, Supreme Leader Ayatollah Ali Khamenei called for a “resistance economy” to counter sanctions that have cut off access to international banking, decreased oil sales to 1 million barrels per day, and complicated importing raw materials needed for industry.

“The arrogant powers are pulling their weight to force Iran to back down, and the government should invalidate these illusions by using the nation's full potentials,” Khamenei said. “In this kind of economy, the nation's progress is preserved and vulnerability of the economy against the enemies’ plots is decreased.”

In the first of a regular series, Helia Ighani explores the wide diversity of opinion in Iran’s media about economic conditions and Iranian policies.

Blaming the Iranian government

Shargh (or “East,” a reformist newspaper)

"Suppose you are invited to an orchestra and each musician is good but only concentrating on playing his own instrument. So instead of the smooth sound of music, you hear the sound of screaming. Perhaps this is the best way to describe the current state of the exchange market. It seems that the economic authorities in the exchange market are trying to make their own instruments." September 24

Mardom Salari (or "Democracy,” a centrist newspaper)

"For the eighth time Ahmadinejad and his aides will visit New York and the United Nations to preach about world management. Before leaving the country, it would be good for the president to tell us whether he really knows anything about the surge in the exchange rate of the U.S. dollar." September 19

Tehran Emrooz (or “Tehran Today,” a centrist conservative newspaper)

"Economic officials are apparently reluctant to talk about the reasons for problems with the foreign exchange market …If we had the opposite situation, meaning we were undergoing real progress in the financial market, the Minister of the Economy and the government economic spokesman would probably have reacted differently—and would have responded to parliamentary concerns. But now the situation is such that almost no authorities are willing to accept responsibility." September 20

Mardom Salari (or “Democracy,” a centrist newspaper)

"Some government officials try to make up excuses to avoid being accountable for the country’s situation…Government should pay attention to reality and refrain from making vague statements that the public does not believe. It is a blunder on the part of the government if it believes that it can do whatever it likes." September 5

Shargh (or “East,” a reformist newspaper)

"In the past few years, economic decisions have been based on short-term solutions… Despite dramatic changes that altered the economic system, the Central Bank has not yet been able to understand the economic situation…These systems and work methods need to keep up with the changing times before it is too late." September 18

Blaming the Outside World

Quds (or “Jerusalem,” a hardline conservative newspaper)

"Although the economic trends are deteriorating short-term, the government’s new economic policies will lead to long-term economic growth over time and with the ability to adapt to the present situation." September 23

Kayhan (or “Universe,” a hardline conservative newspaper)

"Iran continues to find ways to escape the oil embargo…The president has recently announced that Iran constantly finds new ways to circumvent sanctions. He says that we have oil, and the countries of the world need it." September 23

Iran (a centrist conservative newspaper)

"Our economic problems create empathy, cooperation and coordination between various government branches that are trying to remedy the country’s current economic challenges. Although the sanctions cause problems, the opportunity to develop relationships in international banking and investment…can be a substantial part of neutralizing problems from sanctions." September 23

Key to Iranian newspapers

Iran: conservative centrist, one of Iran’s most widely-circulated newspapers.

Kayhan or "Universe": hardline conservative, one of Iran’s oldest newspapers.

Mardom Salari or "Democracy": centrist.

Quds or "Jerusalem": hardline conservative.

Shargh or "East": reformist.

Tehran Emrooz or "Today’s Tehran": conservative centrist, originally run through the Islamic Propagation Organization.

Helia Ighani is a researcher in the Middle East program at the Woodrow Wilson International Center for Scholars.

Tags: Economy, Iran, Media, Newspapers, Talk of Tehran

Iran Leaders Openly Bemoan Economic Pain

July 25, 2012 | 3:14pm

Helia Ighani

Throughout July, a broad range of top political leaders, lawmakers and even military generals have publicly conceded that Iran faces growing economic hardships—with increasingly dangerous consequences. They have blamed both tightening international sanctions and years of government mismanagement. In an unusual move, Iran’s Supreme Leader intervened on July 24 to try to end the wave of criticism.

In a major speech, Ayatollah Ali Khamenei called for an end to public disputes over the financial crisis. He also addressed new U.S. and European sanctions that went into effect in June and July. The following are recent comments from two recent Khamenei speeches as well as remarks from 10 other senior officials that reflect the mounting criticism.

Supreme Leader Ayatollah Ali Khamenei, July 24

“The reality is that there are problems. However, you must not blame them on this or that [Iranian political] party...Instead you must solve those problems with unity. You should avoid useless disputes and airing these disputes to help preserve the nation's unity...And officials should know these actions will not bring them any honor or prestige among the people.”

"The country will pass over the current economic pressures against the Islamic system, for their continuation is not to the benefit of Western nations…They explicitly say they should intensify pressure and sanctions to force the Iranian authorities to reconsider their calculations…When we look at the reality, we have to conclude that not only will we not revise our calculations, but we will continue on our path with greater confidence.”

“Although there are challenges in the path of the Iranian nation, there is no dead-end.”

“Iran retreating (from its policies) regardless of justifications or excuses, or showing flexibility, will only embolden the enemy.”

Khamenei, June 11

"These days Westerners are being sensational about sanctions but they don't understand that they themselves vaccinated Iran through their sanctions imposed over the last 30 years."

Brig. Yadollah Javani, head of the IRGC political bureau, July 23

"The economic sanctions of the West against the Islamic Republic of Iran have reached their peak and have entered a new phase which one can call ‘economic warfare'...The final goal of this war is not to stop Iran's nuclear activities, but to stop the fast spinning wheel of Islamic Iran in all fields.

"By stopping the wheel of progress of the Iranian nation, the enemies want to avoid Islamic Republic becoming a role model for other nations, in particular Muslim nations in the region. Therefore, the West has intensified the economic warfare so that in the end the Iranian people will rise against the regime of the Islamic Republic.

"Although the sanctions have produced the opposite result and in some instances accelerated self-sufficiency, the question now is how to prevail in this economic warfare, now that the enemies have intensified the sanctions and the pressure on the people's economy has also intensified.

"We must consider the imposed economic warfare as a reality...Everyone must act according to his or her duties in this war conditions...Everyone must help the government of the Islamic Republic to break and bypass the sanctions...One must deal with the profiteers like the fifth columnists of the enemy...All the capabilities of the state must be in the hands of those who have a spirit of economic Jihad...One must ask for divine assistance in this economic warfare.”

Ali Larijani, speaker of Iran’s parliament, July 17

“The country’s economic problems are only 20 percent due to the sanctions. Unfortunately, the main origin of the inflation comes from the maladroit application of the plan to suppress subsidies…If a sound plan existed, the situation of our economy would be different, considering the resources in our country.”

Mehdi Ghazanfari, Minister of Industries and Business, July 17

“The enemy has put his fingers on the main arteries of the country’s economy and is now implementing comprehensive sanctions.”

“There is no precedence in the world for a central bank to be sanctioned. But they have done this and they may even expand the sanctions further to include logistics issues. Today we are in a serious and dangerous confrontation. We must realize that confronting the enemy requires serious thought and intelligence.”

“The Iranian economy is dynamic, which will not be influenced by sanctions…The roots of the price hikes contain peculiar complexities, but we cannot announce all of their aspects through the media."

Shamseddin Hosseini, Minister of the Economic Affairs and Finance, July 25

“The conclusion of today's meeting between the economic officials of the government and lawmakers is to minimize the effects of sanctions…We agreed to cut budget spending...and focus on domestic production.”

Mahmoud Bahmani, Governor of Iran’s Central Bank, July 1

“We are implementing programs to counter sanctions and we will confront these malicious policies.”

Rostam Qasemi, Minister of Petroleum, July 1

“All possible options have been planned in government to counter sanctions.”

“While we collectively exported 18 percent of our oil to them before, it is not difficult to substitute customers for this much oil in the world.”

Qasemi, July 14

“These sanctions are more economic in nature to transfer the pressure to the people and the enemy has certainly reached the conclusion that physical confrontation with the Islamic Republic will have no result.”

Ali Saeedi, Ayatollah Khamenei’s representative to the IRGC, undated in mid-July

“The government’s efforts to confront the price hikes have been insufficient.”

Ayatollah Ahmad Khatami, Assembly of Experts and adviser to Ayatollah Khamenei, July 1

“(The price hikes are) a matter of pain…If you say ouch, the arrogant ones will say they have achieved their goal. So be patient, and make them regret it."

Mohammad Reza Rahimi, First Vice President of Iran, July 1

“Today, we are facing the heaviest of sanctions, and we ask people to help officials in this battle."

Seyyed Mohammad Hosseini, Minister of Culture and Islamic Guidance, July 11

“Our country is not in a position to allow the media to publish (any) news or analysis which is not compatible with the regime's and national interests…The situation regarding sanctions and other pressures, especially in economy...requires more cooperation by the media so the country is not hurt.”

Helia Ighani is a researcher at USIP in the Center for Conflict Management.

Tags: Economy, Iran, Khamenei, Larijani, Sanctions, Supreme Leader

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