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November 2015 1394 آبان
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Iran’s economy plagued by structural problems For nearly ten years Elham, who holds a bachelor’s degree in accounting, used to work full-time in a small private food distribution company, while also holding a part-time position in an insurance company. But a few months ago, she was laid off from her full-time job. “Two or three weeks after the nuclear deal my boss told me that they didn’t have enough budget and had to let me go,” she said. “So I had to concentrate on my part-time job, but that’s not enough. I have also applied for so many jobs and haven’t heard back.” According to the official Statistical Centre of Iran the unemployment rate was 10.4% in 2013 and 10.6% in 2014. In March 2015 Iranian economic analyst Majid Salimi Boroujeni estimated that in 2015 the unemployment rate would be “10 to 12%”. On 25 October, ISNA news agency reported that in the last Iranian month (ending 22 October) the month-on-month inflation rate had decreased by 0.3% to 13.3%, and the year-on-year rate had decreased by 0.7% to 10.9%. The economic situation has alarmed officials. On 3 October, four ministers - industry, economy, welfare and defence – made public a letter to Rouhani about an economic downturn they said “could turn into a crisis”. The letter added that although the nuclear deal had led to “plenty of” economic benefits, it had also “created some ambiguities in the market” that needed “to be quickly addressed”. Rouhani thinks otherwise, and has insisted there is no downturn. On 10 October, a week
after his four ministers made their letter public, he said “the situation is such that we might once again fall into a downturn. We need to be alert and try hard.” But Elham agrees with four ministers that the country is already experiencing a downturn: “This nuclear agreement had no positive effect on our lives. Our pockets are empty. Prices have not gone down but up. All people are postponing purchases, waiting for the situation to stabilise, therefore all the markets - car, real estate, stock are on hold. We are already in a crisis. I haven’t seen my kids since 6am when I left home, and I have to drive around until 10pm.”
Syria conflict:
If not Assad, then who? Lyse Doucet BBC Chief international correspondent The most concerted diplomatic push so far to end Syria’s punishing war has concentrated minds on all sides of a bitter divide. Conversations with Arab and Western sources make it clear there is a major unifying goal in these new discussions: to avoid the collapse of Syria’s security forces and its civilian institutions. That means all sides are now moving away from rigid positions taken when Syria’s uprising erupted more than four years ago. “[President Bashar al-] Assad leaving before the process starts doesn’t make sense any more,” a senior Arab diplomat in the region told me. “If he leaves suddenly, two-thirds of his commanders would go with him and Syria would collapse.” The steady rise of the so-called Islamic State, and mounting pressures on a stretched Syrian army has rung alarm bells over the threat of an ungoverned Syria falling into the hands of extremists. The risk posed by another fractured Middle East country is now too big to ignore. So is this summer’s tragic exodus of hundreds of thousands of Syrians desperate to reach Europe. Then, the startling September surprise of Russia’s air sorties into Syria set the stage for the most determined diplomacy of Syria’s crisis. Ideas emerging from Arab and Western
capitals include a ceasefire, an amnesty for forces on both sides, and a transitional government intended to ensure an orderly process that would lead to the drafting of a new constitution and elections. There’s talk of a transition that could last up to two years. Some of these ideas are also appearing in reports about proposals coming from Russia and Iran. Iran has had its own “four-point plan” for a few years, which was studied with interest by the UN. But it stayed on the shelf while Iran was kept out of talks.
Credible alternatives? Integrating an array of armed forces will be fraught with difficulties, if not dangers, but there is a hope that the reform of civilian structures is within easier reach. Sources speak of discussions concerning which senior members of President Assad’s team would be asked to leave - a figure of 10 -15 people was cited.
“I don’t want to say Rouhani has fooled us, but honestly over the past two years, nothing has changed,” said an owner of a small bakery in Tehran. “Since the nuclear deal my customers have shrank and as a result my income has dropped.” But he is hopeful. “I think that once our frozen assets are released and injected into the market, the situation will improve. Now foreign countries are also investing in Iran and in a year our market will flourish.” In late September Bloomberg quoted Iranian central bank vice governor for foreign exchange There’s also a hope that new, more credible, leaders will emerge from the opposition during this period to replace figures seen as lacking support inside Syria. “They’re nice people but they have no base,” is how one source backing the opposition put it. Having convincing alternatives to take charge is seen as crucial to reassure Russia and Iran, who back President Assad. I’m told that names of possible candidates are already being drawn up and shared. An official involved in recent talks with Russia quoted the Russians in this way: “Where is the opposition? If you can assure us it will work we are not wedded to Assad.” Iran and Russia recently stepped up their military support to bolster President Assad’s embattled position on many key fronts. But in private, officials have said for some time that their objective is to “save Syria, not Assad.” The biggest gap, however, is still over how long President Assad can remain part of the process. His opponents insist this process cannot start with him unless it is absolutely clear it will end without him.
Tough choices The press conference in Riyadh, which saw Saudi Arabia’s Foreign Minister Adel al-Jubeir and the visiting British Foreign Secretary Philip Hammond calling for a fixed departure provoked a sharp rebuke from Damascus. Syrian Information Minister Umran al-Zu’bi condemned those with “blood on their hands” who were “speaking about the internal affairs of a country that has always been and will remain free and owns its decisions.” In the end, it is Syrians themselves who will have to make the tough choices. Members of the Free Syrian Army, seen as moderate forces, have been visiting Moscow in a sign that there may be
affairs, Gholamali Kamyab, that Iran expects about $29bn of its more than $100bn frozen funds to be unfrozen and repatriated to the central bank by January 2016. Being stuck in an economic blockade for few years, Iran needs time to get back on its feet. But Mohsen Renani, an economist at Isfahan University, recently told Etemad newspaper there would be no economic improvement in the near future, given the Iranian economy has structural problems. “We had some immediate [economic] problems that were caused by the sanctions - now we are getting rid of them,” he said. “But we also have some deep and chronic structural problems [in our economy] that can lead us into another crisis. In fact, the government can’t deal with this crisis on its own… If we want to pass this crisis, the whole political system needs to get engaged.” Here’s what one of the journalists at the business newspaper Donya-e-Eqtesad, who favours a liberalised economy, has to say about public expectations of economic improvement: “Iran is like a thirsty person struck by drought who now thinks that he has reached a spring. He wants to quench his thirst. You can’t ask him to stay thirsty for another year. Not that he can’t. If there is no other choice than waiting, he will, by he won’t be happy with it. “Over the past four years, people had endured a lot of hardship. Mentally, they are ready to collapse - giving them an overview of the future and telling them things will get better won’t make them content. However, they have no other choice but to accept reality.” The Tehran Bureau is an independent media organization, hosted by the Guardian. Contact us @tehranbureau
room for discussion. But powerful groups linked to al-Qaeda, as well as Islamic State fighters, want nothing to do with this negotiated process. They’re on terrorist black lists so they aren’t invited anyway, but there is still a long hard campaign ahead to try to dislodge them. And there is still deep skepticism that gaps in the negotiating process can be closed, and still deep-seated suspicion and animosity between arch rivals Iran and Saud Arabia, along with some other Gulf States. Saudi King Salman received telephone calls from President Vladimir Putin and President Barack Obama in the past week, and visits from US Secretary of State John Kerry and Philip Hammond. The Saudi monarch is understood to have given his blessing to Iran’s inclusion in the process. Foreign Minister Al-Jubeir told me: “I wouldn’t call it a place at the negotiating table, it’s about being part of the conversation.” And if this fails, there is clearly a Plan B on all sides, for an accelerated military option. Military supplies are already being stepped up even as talks proceed. “It’s not going to be easy and the longer it takes, the more complicated it gets,” is how a senior Arab diplomat in the region put it. “That’s why an orderly process is better than a military one where institutions collapse.”