Business Leader Says China Pays For Iran’s Oil With Goods

Technicians, plumbers, cooks, electricians and experts in various fields are trying to find jobs abroad. Those who cannot emigrate to Europe and the Americas, due to financial or visa limitations, choose Turkey or the United Arab Emirates as their favorite destination.

Millions of mostly educated and professional Iranians have left the country for good since the 1979 revolution and the trend has continued for the past four decades, but a new economic crisis and uncertainty since 2018 has encouraged more people to leave.

Hamid Hosseini, a member of Iran’s chamber of commerce, told Khabar Online website on Monday that he believes all kinds of professionals are migrating, essentially because they have little hope of a better life in the future.

Hosseini, who is a top business operative in the petrochemicals sector, said what he hears from emigration agencies is that the number of people seeking services has multiplied in recent months. While in the past mostly top professionals were looking to find jobs and residence permits abroad, now tradesmen and ordinary professionals are seeking to emigrate.

“Most of these people say they will have higher incomes

abroad and a more comfortable life,” Hosseini said. He emphasized that the phrase “a comfortable life” is an important window into the thinking of prospective emigrants. It shows, he said, that people are apprehensive about the future of the country. “They are tired and concerned,” he argued.

Wages and incomes have precipitously dropped in Iran since 2018 when the United States withdrew from the 2015 nuclear agreement and imposed sanctions, prompting high, double-digit inflation.

But the economic crisis, although important, is not the only factor in nurturing pessimism. The clerical political system has become less tolerant and more erratic and unpredictable in recent years as it has faced more opposition. Younger people are tired of waiting for a bit of loosening of religious restrictions and getting a fair deal in state-run economy controlled by insiders.

Hosseini argued that neighboring countries such as Turkey and the United Arab Emirates have plans to attract qualified professionals.

Tens of thousands of high middle-class Iranians have easily bought homes in Turkey, received residence permits and moved part of their capital to the neighboring country. Iranians are at the top of foreign real estate buyers in Turkey.

But Hosseini singled out the UAE as a new attractive destination for private Iranian companies because its government has a serious plan to attract industrial manufacturers. He pointed out that the UAE is establishing an industrial zone, where investors get free land and attractive bank loans to set up business.

Hosseini was referring to an ambitious plan UAE announced in March 2021 to expand its manufacturing sector, as diversification of its economy from an energy exporter and a commercial hub also to a regional magnet for industry. The plan is to triple annual manufacturing output from around $30 billion to more than $80 billion by 2031.

A new factor encouraging companies to leave is a plan by the parliament to impose taxes on firms operating in Iran's free economic zones. Saeed Mohammad, the president's coordinator for free zones, warned Tuesday that this would be devastating for the economy as many companies would choose incentives offered by neighboring countries.

Hosseini warned that Iran can lose a lot of talent, knowhow and capital to the UAE. Asked if a nuclear agreement and lifting of US sanctions can help the situation, he said “society needs peace and tranquility” not constant interference by the government. He singled out internet restrictions in Iran and erratic laws that are often contradictory and make life for the ordinary citizen unpredictable.

He added, “Problems will be solved when we adopt moderation…which will gradually strengthen hope for the future.”

Gholam Ali Rajaei, also an academic at the University of Tehran, has charged in a February 12 interview published by Rouydad24 website that some of Raisi's aides and cabinet ministers lack executive experience even at middle-management level to occupy posts in any government.

Rajaei said that Iranians are now disillusioned and desperate and have lost their confidence in the government as Iran’s economic crisis gas seriously lowered their living standards.

Similar warnings have multiplied since late 2021 as Iran’s annual inflation hovers around 40 percent and the middle class becomes impoverished.

Meanwhile, Rajai suggested that Raisi should fire his ministers of economy, labor, and industry at once as they are responsible for the administration's most significant weaknesses.

Zaynab Ghabishawi, one of the website's editors added that economic problems, lack of a roadmap, and the performance of incapable managers are to be blamed for the government's inefficiency. Rajaei added to the journalist's comment that most of Raisi's aides and cabinet ministers have never worked even at the level of director generals before being appointed as ministers. He also noted that Raisi himself has spent his entire career in the Judiciary and has no executive experience.

The academic added that although some of Iran's problems have their root in the performance of the previous government, not only the current administration has not been able to improve the situation in the past six months, but it has become worse. "When is the Raisi administration going to launch the plans he was talking about during his election campaign?" Rajai asked.

Rajaei's opinion is corroborated with criticisms made by other observers. The head of Iran's Consumer Support Organization, a price watchdog based in Tehran, told Aftab News website on Sunday that prices of 84 thousand goods in the Iranian market have risen by 120 percent during the past months.

Even some of Raisi's ministers are unhappy about rising prices. Interior Minister Ahmad Vahidi told state television on Saturday that "rising prices in Iran follow no particular logic. Price rises are normally an outcome of scarcity, but prices in Iran rise while there are plenty of goods in the markets."

Vahidi seemed to ignore the rising cost of production as a result of sanctions and other economic factors. He also ignored the fact that the rise in commodity prices inevitably lead to inflation for a range of goods.

The government's solution for the problem is returning to the 1990s punitive regulations that call for the punishment of traders and businesses rather than addressing the root cause of the problem.

Iranian lawmakers have repeatedly called for the impeachment of the same economic ministers Rajaei has mentioned in his interview but knowing that it does not have a true plan to address the problem even if ministers are replaced, the government has been exerting pressure on the parliament to shelve the petitions for impeachment.

Referring to Raisi's much-criticized habit of issuing orders without following them up, Rajaei warned him that "It is time for action, not to issue orders!"

On the sidelines of an exhibition titled Achievements and Capabilities of the Jihadi Management on Sunday, Mohsen Rezaei told reporters that the biggest obstacles the economy faces are not imposed from the outside but stem from the internal problems, which he called “domestic sanctions.”

Rezaei described cumbersome and bureaucratic regulations, contradictory and inefficient laws and corruption in the country’s administrative system as the domestic sanctions that are “10 times more detrimental” to Iran’s businesses and industries.

He noted that economic reforms are the only way to get past these hindrances, adding that the current administration has started with trade reforms and then will pursue monetary reforms.

Rezaei added that the people should not feel the pressures of government’s budget deficit while they are also suffering from high tax rates as well as inflation.

The long process to get government permits to do business, lack of a good legal framework in the country, and unfair taxation are the main elements leading to unfavorable conditions in the country’s production sector.

Iran faces serious problems in three major indicators: Economic growth, the rate of inflation and the unemployment rate.

Jala Malaki, spokesperson of the department told local media that the fire started in one of the older parts of the sprawling bazaar when all shops were still closed. Around 30 retail businesses were completely engulfed by the fire and some walls have collapsed, he said.

Authorities had not announced the extent of monetary damage and losses as of noon local time, and there was no word about possible casualties. There is also no information about the possible causes of the incident.

Fire crews from at least six stations were battling the blaze almost five hours after it started.

Real estate prices have increased sevenfold since 2018, which has put pressure on rents, experts say. Although home prices have not risen much in recent months, rents keep climbing because there is a time lag between purchase price increase and rents.

In some instances, rents equal the total income of a wage earner who is paid about $150 a month in a fulltime job. Meanwhile, food prices rose by 60 percent in 2021 compared with the previous year.

Home prices rose in local currency because real estate is a major asset protecting savings in a country like Iran where the national currency has lost value almost eightfold since 2017. In countries without an internationally accepted currency, wealth can disappear with devaluation and people rush to protect their capital.

Calculated in US dollars, real estate prices have stayed the same in four years.

Rising home prices in local currency pushe the middle class out of the market and increases demand for rentals.

Pundits and politicians in recent weeks have been warning of a social explosion in the country if the economy does not improve soon. Iran is negotiating with the United States over its nuclear program. An agreement can lift US sanctions and provide much-needed revenues.