What’s Going On In Iran's Presidential Sci-Tech Office?
Iran's government has established an office to boost science and technology companies, while it has been disrupting access to the Internet, harming the sector.
Iran's government has established an office to boost science and technology companies, while it has been disrupting access to the Internet, harming the sector.
An article published by Aftab News in Tehran on December 10 shed some light on some of the activities of the center, which received a handsome budget by Iranian standards after Supreme Leader Ali Khamenei last year called on officials to promote science-based companies.
Usually, Khamenei hears something from his advisors and issues some general and vague instructions to the country’s authorities to strengthen an industry or a certain sector of the economy. Such remarks are then interpreted as unquestionable orders and officials or factions start competing for a piece of the budget. Promoting knowledge-based firms and start-ups is among these contentious issues.
While the achievements of traditional government departments are more measurable, knowledge-based outfits have no touchstone to be measured against because such activities are new for the bureaucracy and authorities do not clearly know what to expect from them.
The actions of the Presidential Office of Science and Technology with a budget of nearly 30,000 billion rials (about $7.5 million in today’s exchange rates - much more last year) and numerous credit lines, is not out in the open and subject to scrutiny for the public, unlike for instance the ministries of energy, health or education. Therefore, few people are aware of how such an astronomical budget in rials is spent.
Since Khamenei included the adjective “knowledge-based” in the motto of the current Iranian year (which started March 21), the most important thing that occurred is that many companies redesigned or reintroduced themselves as such to take advantage of loans and incentives available from the government.
According to a UNESCO report, by 2020, 49 innovation accelerators had been established in Iran with private equity and 113 innovation centers had been set up in partnership with science parks and major universities.
According to Aftab News, Vice President for Science and Technology Rouhollah Dehghani Firouzabadi has recently toured Sharif Science and Technology Park, where it is supposed to be housing nearly 600 companies, 19 accelerators, 15 investment funds, and 10 innovation centers. But the situation is not like the start-up atmosphere at all. Instead, there are a lot of empty halls with many computers and no operators. The hub, which was boastfully presented as the beating heart of Tehran in the field of technology and innovation ecosystem, looks like an abandoned and bankrupt business center.
Firouzabadi, appointed in September, said the country’s problems will be resolved if decision-makers are chosen from among the scientific elite, adding that “I believe I need to delegate powers to managers because a specialized manager will be more knowledgeable about his field than I am.”
Currently, more than 7,900 knowledge-based companies are registered but, according to people in the sector, most of them are not active or are doing something different from what they were supposed to do.
The presidential outfit, which has recently rebranded itself with a longer title to include science-based economy, has even outsourced its most important job to companies from the private sector. Its most important task used to be identifying whether a company is science-based or not, and now this task is carried out by contractors.
Companies that seek to apply to be registered as knowledge-based – to be able to use its advantages -- should be evaluated in terms of product and corporate frameworks. Now, there are a large number of evaluators and brokers from the private sector. It is not clear how such contractors are selected or if they are connected to government insiders. Such a system is prone to nepotism and corruption and there is no supervision over it.
One of the noteworthy activities of the center is organizing the so-called science and technology tours to countries like Turkey and France. While many start-ups and tech companies as well as people active in such fields are emigrating in the last 18 months due to inflationary stagnation and widespread poverty in Iran, such luxurious tours aimed at “connecting the researchers of the Islamic world" seem suspicious, says Aftab News.
Another way that the center is spending its extravagant budget is holding online workshops and seminars, which are usually held with only a handful of participants because the instructors are chosen based on their close connections to the authorities and not based on their expertise.
There is also an inherent contradiction in promoting new technologies, while at the same time restricting internet access to the public to control the flow of information about the current wave of antigovernment protests.
On Monday, Mojtaba Tavangar, the chairman of the Digital Economy Committee of the parliament, wrote to Raisi asking him to restore access to the Internet and to establish a fund to compensate for the damage caused to businesses. New figures show that due to extensive internet and social network restrictions, 20 percent of people in Iran have lost their online jobs in the past four months.
While the US dollar was trading for over 410,000 rial threshold on Thursday, President Ebrahim Raisi’s administration has not finalized the country's budget for the next Iranian year starting March 21, and the fate of the country’s Seventh Five-year National Development Plan (2022-2026) is still in limbo.
Following weeks of buck passing between the administration and the parliament, in which lawmakers insisted that without a final new five-year plan the budget cannot be considered, the government is still dragging its feet. Some hardliner supporters of President Ebrahim Raisi argued Tuesday that both plans may be discussed simultaneously at the parliament, but Speaker Mohammad Bagher Ghalibaf opposes any change of procedures.
The law says that when a five-year plan comes to an end, the government should submit a new one, based on which the legislature can debate a new budget. But amid lack of economic and financial clarity due to sanctions and international isolation, the government has not finalized the next five-year plan, while the deadline to submit a budget passed in December 6.
Since 1989, the Islamic Republic has been devising five-year development plans. A lot of organizations and institutions are involved in designing and actualizing these plans, which mostly remain on paper, because they are full of general statements without planning for the needed monetary resources.
According to parliament rules, if the administration misses the December 6 budget deadline, it must attach an addendum to the budget bill that will earmark spending for quarterly portions of the year. This means demanding extra work from an administration that has already failed to perform its ordinary procedural duty. Quarterly allocations mean parliament will approve only three-month budgets, which will tremendously complicate operations not just for government departments, but all the businesses owned or controlled by the state, which constitute up to 80 percent of the economy.
Considering the steep fall of the rial and growing sanctions pressure, the administration cannot have a reasonable estimate of the dollar exchange rate and the amount of revenues from oil exports for the coming year to be able to finalize the details of the budget. On the other hand, the government is selling oil under the market price to small Chinese refineries and through illegal ship-to-ship transfers to circumvent sanctions. Now that Russia is also competing with Iran in sales to China, the government is not certain how much crude Tehran would be able to sell and at what price.
In July, the Supreme Accounting Office released a report covering the period March 21- May 20 showing that except tax revenues, all other major sources of income grossly underperformed, which local media said was a serious warning for the government and the economy. The government’s revenues from taxes, oil exports, customs duties, etc. totaled 880 trillion rials or about $3.5 billion (average free market exchange rate at the time) in the 60-day period. This was just 37 percent of the projected budget revenues. It is important to note that only 15 percent of the projected oil income was collected.
All this chaos is happening on the backdrop of over 115 days of antigovernment protests, that have accelerated capital flight. Confirming the massive outflow of capital from the country, head of Tehran Chamber of Commerce, Industries, Mines and Agriculture, Masoud Khansari, said earlier in the month that the annual outflow of capital has reached about $10 billion.
Opponents of the Islamic Republic have also urged people to withdraw their deposits from government banks to put further pressure on the government, which has been printing more money in recent years. The money supply has grown at an unprecedented pace since September.
Banks have raised interest rates to attract deposits. In the past few days the Central Bank has given the go-ahead for up to 20-percent interest rates for banks to pay. Although the Central Bank says any rate more than 20 is a violation of the law and can lead to the firing of a bank manager, a many banks – especially semi-private institutions are giving 23 to 25 percent interest under the table.
Talks to revive the JCPOA and lift most of the US sanctions have stalled since September when the last attempt by the European Union to broker a deal fell apart.
In its latest Global Economic Prospects report released on Tuesday, the World Bank also said that global growth is slowing sharply in the face of elevated inflation, higher interest rates, reduced investment, and disruptions caused by Russia’s invasion of Ukraine.
It said it expected global GDP growth of 1.7% in 2023, one of the slowest paces since 1993 except for the 2009 and 2020 recessions. In its previous Global Economic Prospects report in June 2022, the bank had forecast 2023 global growth at 3.0%. The global economy is projected to grow by 2.7% in 2024.
The outlook for Iran’s GDP is reported as 2.9% in 2022, but it will decrease to 2.2% in 2023, and 1.9% in 2024. The figures pertaining to Iran seem too optimistic given the current 50-percent annual inflation rate and a currency that has dropped by 30 percent just since September.
For example, unlike Iran, most of the countries in the category of Emerging Market and Developing Economies, including Brazil, Mexico, Argentina, Saudi Arabia, India, Pakistan and South Africa, reported negative GDPs in 2020, posing a question about the validity of the figures about Iran, whose currency has fallen more than 10-fold since 2018 and tens of million of middle-class citizens are now considered poor.
The outlook for 2024 for Saudi Arabia, whose consumer prices rose by 2.9 percent on a year-on year basis in November, is projected to be 2.3 percent, while Iran with 40-50-percent inflation in the past 24 months and food inflation recorded at above 70 percent in 12 provinces, is projected to have a 1.9-percent GDP growth. The answer most likely lies in lack of transparency and probably data fabrication by the regime’s authorities.
In recent years, the Islamic Republic has officially stopped providing raw data to the public. Every now and then, officials announce some figures that often do not add up with the available facts or contradict each other. Moreover, the country is so isolated in the international community that the World Bank has to primarily rely on government data for its estimates.
Iran’s government having lost most of its vital oil income due to US sanctions has resorted to printing money, with liquidity and the money supply increasing exponentially, which in turn pushes inflation higher and the national currency’s exchange rate lower. Even pro-government Iranian politicians and lawmakers say that the economic situation is dire and no growth is expected.
According to the World Bank, the bleak outlook will be especially hard on emerging markets and developing economies as they struggle with heavy debt burdens, weak currencies and income growth, and slowing business investment that is now forecast at a 3.5% annual growth rate over the next two years -- less than half the pace of the past two decades.
World Bank Group President David Malpass said, “The crisis facing development is intensifying as the global growth outlook deteriorates,” adding “Emerging and developing countries are facing a multi-year period of slow growth driven by heavy debt burdens and weak investment as global capital is absorbed by advanced economies faced with extremely high government debt levels and rising interest rates.”
"Given fragile economic conditions, any new adverse development -- such as higher-than-expected inflation, abrupt rises in interest rates to contain it, a resurgence of the COVID-19 pandemic or escalating geopolitical tensions -- could push the global economy into recession," the bank said in a statement accompanying the report.
In a video message he released on social media Wednesday, Peyman Jebelli said he had seen his brother’s interview, adding that such incidents were not unprecedented.
The chief of the IRIB, the key state propaganda machine, also tried to raise suspicion over his brother’s remarks in the interview suggesting that Meysam (Maysam) may have been under some kind of pressure, purportedly by a foreign government or group. “I’m not sure he made these comments knowingly and of his own volition.”
The interview followed the Time’s disclosure Tuesday that one of the IRIB chief’s brothers, Meysam had defected in early 2020 along with another brother, Meghdad, and that they had sought asylum after their nephew Mohammad-Amin’s tragic death in IRGC's downing of a Ukrainian airliner on January 8, 2020.
The report and subsequent information did not indicate where the brothers asked for asylum. The United States and Canada are the two most likely countries.
The IRGC fired two missiles at Flight PS752 only minutes after it took off from Tehran’s Imam Khomeini Airport amid heightened tensions between Iran and the United States after firing dozens of ballistic missiles at a US military base in Iraq in retaliation of the targeted killing of Qods force commander Qassem Soleimani.
Supreme Leader Ali Khamenei appointed Peyman Jebelli, a close associate of his son Mojtaba, as the head of the IRIB, in September 2021. Jebelli was designated by the United States in November and by Canada in October for his role in the regimes violations of human rights including airing of confessions extracted under torture.
Jebelli’s nephew, the 29-year-old Mohammad-Amin who was among the 176 passengers of the flight, had been pursuing a Master of Health Science at the University of Toronto since 2018. Not only his uncle but his own father, Mohammad Jebelli, also chose to take the regime’s side over the incident.
The tragic death, however, did not shake the loyalty of Mohammad-Amin’s father and his uncle, Peyman Jebelli, to the regime and they chose to remain silent about the IRGC’s responsibility in the incident, Meysam told Iran International. “He stepped in his own son’s blood,” Meysam says.
When Meysam tried to convince his brother Peyman that the plane had been struck by missiles as video footage that emerged on social media indicated, the IRIB chief denied the authenticity of the footage and claimed it showed Israeli air defense exercises.
When the truth came out three days later and Meysam confronted him again, the IRIB chief only said “Good for you that you realized that [before its public announcement]!”
Meysam says he was not pro-regime like his other brothers but after the downing of the plane, which he calls “murder by the Islamic Republic”, he decided to openly denounce the regime. “It was time to take sides.”
In a tweet after Meysam’s disclosure of his and his brothers’ disputes over the incident, Canada-based activist Hamed Esmaeilion, whose daughter and wife were killed in the crash, revealed that the two Jebelli brothers who have defected have been members of an association seeking justice for the victims of Flight PS752 for a long while.
“What matters about the Jebelli brothers, Meysam and Meghdad, … is not defection but their choosing the right side of the history. They did not remain silent,” Esmaeilion wrote.