Iran Lawmaker Says Rouhani's Central Bank Chief Sold 62 Tons Of Gold
A lawmaker in Iran has alleged that during former president Hassan Rouhani’s administration the central bank chief engaged in corruption and mismanagement.
A lawmaker in Iran has alleged that during former president Hassan Rouhani’s administration the central bank chief engaged in corruption and mismanagement.
Ali Akbar Karimi, a trained economist and an occasional critic of corruption, told the conservative Mehr news agency on Tuesday that former central bank chief Valiollah Seif “auctioned off the country’s wealth” and no one has looked into this case.
He said that the central bank sold 62 tons of gold as government-issued gold coins, but he did not say how this was related to corruption. Seif headed the institution from 2013-2018, and Iran was under international sanctions during the first three years and short of cash.
He insisted that Seif inflicted “huge damage” during his tenure at the bank. Iran’s Judiciary has announced that Seif has been convicted in another case related to corruption and sentenced to 10 years in prison.
Iranian hardline conservatives have long been pursuing corruption and mismanagement in Rouhani’s government to show that shortcomings are the result of bad actors rather than the political system.
Similar cases have been common in other Iranian presidential administrations, and it is hard to prove that Rouhani’s government was worse than its predecessors.
Javad Owji told a budget planning meeting on Sunday that because of lack of investments in the past, the country is now faced with a stark choice – invest $160 billion in its oil and gas sector or face declining output and eventually imports of fossil fuels.
Iran’s government is in the process of drafting the budget for the next Iranian year that starts on March 21, 2022, amid a serious shortfall of revenues. In the current year the budget had a 50-percent deficit or the approximate equivalent of one year's full oil export revenues. But because of US sanctions, Iran sells much less oil and has little cash income for what it can ship in illicit ways.
The oil minster cannot hope to receive any major financing from the government given the dire financial and economic conditions. In fact, Iran failed to make the needed investments to modernize exploration and production even during the years of very high oil prices from 2005-2014, when it is estimated the country netted more than $700 billion dollars in oil revenues.
The main reason for Iran falling behind is its closed political and economic system, which is not conducive to foreign investments, cooperation and technology transfers. Iran’s constant confrontation with the West and disputes over its nuclear program that had secret elements prompting alarm, left the oil industry in isolation.
The clerical regime, increasingly dependent on the will of its Supreme Leader Ali Khamenei also has a strong inward-looking and anti-Western ideology.
Mohsen Khojastepur, general director of the Iranian national oil company said last week that if investments in the gas industry are not secured Iran will become a net importer in the coming years.
Iranian officials have been warning of inadequate natural gas production that cannot keep pace with consumption this winter and have warned people of widespread blackouts.
Fararu news website in Tehran has confirmed that the natural gas crisis is the result of insufficient investments and lack of technology that only a handful of Western energy giants can provide. Just to maintain current production, Iran needs to invest up to $50 billion in its gas fields, especially in the Persian Gulf offshore South Pars reserves shared with Qatar.
It will not be easy for Iran to make up for the lost time. Even if there is an agreement in nuclear talks, US sanctions are lifted and Iran’s oil exports reach 2.5 million barrels a day, with current prices it can hope to have gross export revenues of around $65 billion annually. But lack of efficient planning and management in addition to years of sanctions have left a very big economic hole in the country, which would takes years to fill.
One more factor can also contribute to Iran becoming a net energy importer – rampant consumption because of huge energy subsidies the government provides, estimated to be around $45 billion a year. Both electricity and fossil fuels are heavily subsidized, which encourage wasteful consumption. Gasoline is now sold at around 20-40 US cents a gallon, to give an example.
This has gone on for decades and it is a risky political proposition for the government to eliminate the subsidies. When it raised prices to the current level from even a lower price two years ago, nationwide unrest broke out and security forces using military ammunition killed hundreds of protesters, destroying the last vestiges of the regime’s legitimacy.
Conservatives and hardliners, including members of parliament, give any credit for the accelerating vaccinations to the new president, Ebrahim Raisi (Raeesi), who took office in August. With the program speeding up, 40 percent of the population is now fully vaccinated.
While critics accuse Rouhani, who chaired the National Covid Combat Taskforce, of mismanagement, supporters of the previous president say that vaccines imported since Raisi took office were procured by the Rouhani administrationin the last weeks of his presidency.
The Rouhani administration did try to procure Covid vaccines earlier when they became available in late 2020. But soon Supreme Leader Ali Khamenei ruled out importing United States- and British-made Covid-19 vaccines on the grounds that western drug companies had a track record of testing products in developing countries and that it was “not unlikely they would want to contaminate other nations.”
At the time, the US-German Pfizer, US-made Moderna and the British-made AstraZeneca were the leading vaccines internationally. In fact, American vaccines were also being produced in European plants, but Khamenei’s ban remained in effect.
In early July, a severe fifth pandemic wave hit Iran and because of slow vaccination infections soared killing around 40,000 more people in three months. The public began openly accusing Khamenei of being responsible for the disaster with his ban on Western vaccines.
When Raisi took office on August 6, Iran had administered 14.7 million doses of the Covid vaccine, with nearly 3 million people fully vaccinated. The figure has now risen to 86 million doses, with 33.6 million people fully vaccinated.
In August, just as Rouhani was preparing to hand over the presidency to Raisi, the daily Covid death toll was around 700.It has now dropped to around 130.
For months, hardliners in parliament have been calling for Rouhani's prosecution on various grounds. A parliamentary committee on October 12 submitted a formal lawsuit against the former president to the judiciary urging Rouhani's prosecution for misconduct and failure to carry out his duties during his two terms of presidency.
Critics of Rouhani argued his presidential strategy based on a nuclear deal with world powers and increasing trade with Europe and with international energy majors floundered when former United States Donald Trump left the 2015 nuclear deal in 2018 and imposed ‘maximum pressure’ sanctions. They charge his economic policies did little to help poorer Iranians.
Rouhani and his administration were widely criticized for mismanaging the Covid crisis in not enforcing a lockdown soon enough after the pandemic hit Iran in February 2020, did not provide sufficient support to less well-off Iranians, and did not take a firm stand against a religious establishment that resisted social distancing and closure of religious venues.
Despite the text of Khamenei's public speech in which he emphasized that procuring vaccines from the US and Europeans countries was ruled out, in recent months his supporters have claimed that he had not banned foreign vaccines and only ordered them to be imported from "safe and secure sources."
Grand Ayatollah Lotfollah Safi Golpayegai, a respected 104-year-old senior cleric, came under fire by an ultraconservative website for warning the parliament speaker that Iran must end its international isolation.
An Iranian analyst, Mehdi Mahdavi-Azad told Iran International that as Iranians get poorer many ordinary religious people fall below the poverty line and senior clerics feel the danger of their anger.
Judiciary Chief Gholamhossein Mohseni Ejei warned on Thursday, that low employment and decline in production is likely to lead to “social abnormalities.” Without elaborating further, Ejei warned that part of Iran's political, social and cultural problems is the result of economic retrenchment. However, he did not mention US sanctions, which are the immediate cause of the crisis.
Ejei is the quintessential insider, loyal to Supreme Leader Ali Khamenei and presiding over one of the regime’s most hardliner and repressive machines.
Tehran has so far resisted reaching a quick deal over its nuclear program with the United States, which would lift the crippling sanctions. The resulting impasse has led to Iran's most serious economic crisis since the 1950s. Some economists have even warned that Iran might end up in a famine, like the one it experienced in early 20th century, if it fails to begin negotiations with the West.
Another high-ranking cleric, Expediency Council Chairman Sadegh Amoli Larijani said on Thursday that it is regrettable that many Iranians cannot afford to provide meat and fruit for their families."This is painful," conservative website Alef quoted him as saying.
Speaking about rising prices and other economic problems that have made life difficult for Iranians, Larijani said: "The pressure being exerted on the people, particularly the underprivileged strata as a result of high inflation is a major source for concern."
Many foodstuffs are scarce, and their prices are constantly rising, and we should be thinking of a quick solution for families that cannot afford to buy meat or fruit, said Larijani, while calling on the government to make the necessary decisions to bring about a breakthrough. However, he also stopped short of advising the government to solve its disputes with the West.
Earlier this week, during a meeting with Majles Speaker Mohammad Bagher Ghalibaf in Qom, Grand Ayatollah Safi Golpayegai, a former Guardian Council member got closer to the essence of the problem and demanded an end to Iran's international isolation. But possibly fearing repercussions in case his words were taken as opposition to Khamenei's policies, he did not mention the sanctions and the need for negotiations with the West.
Golpayegani told Qalibaf: "I am seriously concerned about the country's economic situation and the people's problems." The Grand Ayatollah added: "We should maintain relations with all of the countries of the world. It is not good to be sulking with many other countries. In order to restore the rights of the people and put an end to the current situation which the Iranians do not deserve, we should maintain relations with the world."
Subsequently, hardline news website Raja News, which is close to the ultraconservative party Paydari, harshly criticized Golpayegani and accused him of repeating former President Hassan Rouhani's "wrong arguments."
On Thursday, The Qom Seminary Teachers Association and Ayatollah Alavi Boroujerdi, a high ranking seminarian criticized Raja News and ruled out its argument as "rude," however, the website carried another article with the same tone repeating the same allegations.
Raja News is one of the main opponents of negotiations with the United States and other Western countries and has said in numerous articles during the past year that Iran should leave the nuclear deal (JCPOA).
The calls made by top clerics to solve economic problems could be their way of persuading Khamenei to agree to restart negotiations with the West without preconditions.