Economic pressure on the Iranian regime has been increased since the start of the economic sanctions imposed by the administration of former US President Donald Trump back in 2018, causing more damage to the Iranian economy than any other US action, the one came into effect included most of the export sectors, as well as the Central Bank of Iran.
The Coronavirus outbreak and handling in Iran, in addition to the economic disasters, made Iran look for ways to dodge the sanctions.
US Sanctions Harmed Iranian Economy
Weeks ago, the official page of the US State Department published a statement by former US Secretary of State Mike Pompeo, confirming the effects of sanctions on the Iranian economy, saying, “today the Iranian economy is facing a collapse in the price of the national currency, an increase in public debt and high economic inflation,” affirming that Iran was exporting About 2.5 million barrels of oil a day. It is now struggling to export a quarter of that.
The US minister also indicated in his statement at the time that since May 2018, the Iranian regime has been prevented from access to more than $ 70 billion in oil revenues, and the value of the Iranian riyal has decreased to a fifth of the value against the US dollar since the beginning of the sanctions, while the GPD has shrunk about 6% for three consecutive years.
Economic reports revealed that Iran’s GDP is $ 440 billion for the year 2019/20 with a 4.99% loss, with a population of 82.8 million, and the Iranian economy is relatively diversified for an oil-exporting country, but theeconomic activity And government revenues are still depending on oil revenues.
The US EIA said that Iran’s net exports of oil and oil products during the first nine months of 2020 was worth only $ 11 billion, while it reached about $ 30 billion in 2019 and $ 67 billion in 2018.
Oil companies and international organizations, including the International Energy Agency, issued statistics indicating that Iran’s exports of oil and condensed gas plunged to 300,000 barrels a day, whereas before the US sanctions, the number was 2.5 million barrels.
The OPEC also released its 2020 report, which states that Iran’s oil production has fallen to less than two million barrels a day this year and the price of Iranian oil exports has decreased by more than 30%.
Corona Increases The Damage
The Coronavirus has spread in Iran at a time when the country is going through a stifling economic crisis. President Hassan Rouhani described it in December 2019 as the most difficult in the 40 years of the Islamic Republic. With the announcement of infections in Iran, the Financial Action Task Force blacklisted Tehran, in February 2020, economic pressures on the Iranian regime intensified after the crisis of the virus’s spread, and its impact on the purchasing process at home, the borders with neighboring countries were closed. Economy expertAmer Al-Mashhadani points out that Iran initially resisted imposing strict closures, as this would mean preventing people from working and consequently providing them with alternative financial support.
Al-Mashhadani adds: “Iran announced additional spending, most of which was to finance cheap loans, accounting for about 7% of GDP, and it also allowed citizens to delay paying taxes, for fear of protests and losing control of the pandemic.”
According to Al-Mashhadani, the pandemic had greatest impact on the non-oil sectors, agriculture, industry, and services, which formed a large part of the economy, after the US sanctions reduced Iranian oil exports, as more than 1.5 million people lost their jobs by the middle of 2020, confirming that unemployment rates in the country have increased many times what they were two years ago.
Official statistics indicate that the unemployment rate exceeded 11.18% of the total workforce, with the weakened value of riyal, consumer prices continued to rise, and the monthly inflation rate reached 7% in October 2020, the highest level in two years.
In September 2020, the Iranian riyal suffered a steep dive in value against the dollar, as its price deteriorated to 273,000 riyals per dollar in the black market. Al-Mashhadani expects the Iranian economic crisis to continue during the next months and possibly the next year, in light of the continued sanctions, the blacklisting of Iran, and the impact of the Corona pandemic. This means the continued contraction of the economy, high rates of inflation, unemployment, the budget deficit, the loss of hundreds of thousands of jobs, delayed payment of salaries, and a high rate of poverty, which may lead to social unrest, as he put it. The economy expert mentions several indicators of the continued economic crisis during 2021, the most important of which is the constant decline in oil exports to record low as a result of US sanctions, the inability to transfer funds through the international network of banks, the low volume of foreign currencies in the Iranian economy, and the increase in capital loss, which means growing confidence crisis in the economic system and that this situation will persist for years, in addition to the contraction ofIranian foreign trade by 41%, steady rise in prices, and then the decrease in the purchasing power, the increase in poverty levels, and inflation rates are reached about 30 percent, which will push the Iranians to find other assets to invest their money, such as real estate, gold, stocks or foreign currencies, which in turn led to higher prices in those sectors
Twisted tactics to dodge US sanctions
After the US withdrawal from the nuclear agreement in 2018 and the increasing sanctions imposed on Iran, Tehran resorted to roundabout methods to export its oil, as the American Oil Price website revealed that Tehran is using other agents to hide its oil movements, ship-to-ship transfers, and the incorporation of Iranian oil into Iraqi export pipelines.
The activist Milad Al-Janabi indicates that Iran is seeking to operate the local “Ghora-Jask” pipeline which is 110 km long to transport oil to the new port located on the Gulf of Oman.
Al-Janabi expects the project to be completed by March 2021, explaining that Tehran will then be able to export oil through JASK, which is the port that saves Iranian oil shipments from passing through the Strait of Hormuz.
After completing the infrastructure for the first stage, it will change the situation according to the expert, who confirms that Iran will transport 350 thousand barrels a day, then the number will be increased to 460 thousand barrels of heavy crude oil and 254 thousand barrels per day of light crude oil to export terminals, The second phase will help transport more than a million barrels of crude oil to export terminals.
The new port will facilitate the transfer of Iranian oil abroad without passing through the Strait of Hormuz, which takes longer to cross due to the narrow maritime space
Domination of the Iraqi markets
The development of economic relations with Iraq was and still is one of the priorities of the Iranian regime, which exploited the influential Shiite political forces in Iraq that are close to Tehran after 2003, to strengthen Iranian control over the Iraqi market.
Those Iraqi political forces hindered the openness towards the Arab region, and opened the doors of Iraq to Iranian trade, to import all kinds of goods and services, even bad and corrupt ones, according to journalist Adnan Al-Omari.
According to Al-Omari, Iraq has become the number one importer of Iranian goods and services, bringing Iran an annual volume of about $20 billion. Iranian officials’ efforts to link Iraq’s economy with Iran have not stopped, so Iran ranks first in the countries from which Iraq imports everything. Indeed, the post-2003 governments deliberately opened up and provided the imposition of maximum economic benefit to Iran in Iraq, even if it was at the expense of the country’s interest.
According to Al-Omari, the Iraqi governments insisted on wasting huge quantities of Iraqi gas and refused offers to invest it, instead they import it from Iran. The Baghdad government also rejected offers to benefit from cheap electricity from the Arab Gulf states or Egypt and preferred to import electricity from Iran, despite the risks of getting into US sanctions for violating international sanctions on Tehran, and importing weapons from Iran, not any other country.
The process of exporting Iranian gas to Iraq began on June 21, 2017, at a rate of 7 million cubic meters per day, and by the end of that year, it had reached 14 million cubic meters per day. Iran’s exports of electricity to Iraq have been on the agenda of the Energy Ministry in recent years as well.
Iranian electricity exports to Iraq began in 2010 at about 5,000 megawatts. A total of 2,800 megawatts of Iraqi electricity is provided by imported Iranian gas, and 1,200 megawatts of electricity are exported directly to Iraq. Of course, this number is dedicated to the summer season, when the demand for electricity increases in Iraq. Therefore, Iraq provides between 4,000 and 4,200 megawatts of electricity through Iran. Besides, electrical interconnection operations between the Iranian electricity grid and the Iraqi electricity grid have recently started
Experts estimate that the average annual Iraqi imports amount to 60 billion dollars, and in 2013 it reached 80 billion dollars, amid deliberate negligence by the government to develop agriculture and local industry because import also serves the interests of corrupt mafias and parties that achieve profits estimated of 15 billion dollars annually from imports.
Economic statistics show that Iranian exports to Iraq have increased continuously over the past ten years, as Iran’s non-oil exports to Iraq in 2008 amounted to about 7/2 billion dollars, and in 2019 they reached about 9 billion dollars. While Iranian exports to Iraq in terms of value in 2008 reached about 15% of Iran’s total exports, which amounted to about 22% of total Iranian exports during the past year.
Iraq has one of the longest common borders with Iran, amounting to 1458 km, and the presence of 10 border crossings between the two countries made it easy for Tehran to invade the Iraqi markets with Iranian products, in addition to the exploitation of the crossings in the transfer and smuggling of weapons, hashish, and drugs to the neighboring countries, Syria and Lebanon.
Most of the goods that Iran exports to Iraq at present are food products such as tomato paste, sweets, chocolate, pistachio, dairy products, agricultural products, plastic products, steel, and construction, as well as healthcare products.
Drugs Are A Gold Mine
Observers indicate that Tehran’s constant quest to break the US blockade can be seen in smuggling, selling oil to Iraq, and controlling the Iraqi market; in addition to drug trafficking returns that can compensate for the damage inflicted by the US sanctions and help facing its crises.
Earlier press investigations published by “Politico” magazine revealed that the Obama administration abandoned its intention to launch an ambitious campaign within the “Cassandra” project to enforce a law targeting drug smuggling by “Hezbollah” militias. “Backed by Iran, despite the evidence revealed that the party was involved in smuggling cocaine into the United States. The Obama administration did all that to reach an agreement with Iran over its nuclear file.
In 2008, the “Cassandra” project collected evidence that “Hezbollah” had transformed itself from a military and political organization in the Middle East into a mafia active in the field of international crime, where some investigators believe that it collects a billion dollars every year from drug trafficking, arms trafficking, and money laundering, and other criminal activities.
Political analyst Abdullah Hashemi points out that although many countries are present in Afghanistan and work in combating drugs in the country, drug production has doubled fifty times since 2001, and the production of Iranian drug projects in Afghanistan during the last two years has reached about 14 thousand tons. Hashemi asserts that in 2017, drug production in Afghanistan reached 10 thousand tons, of which a large portion was smuggled to countries of the world, including Iran, through militias loyal to Tehran and working for it. Hashemi indicates that transporting drugs through Iran was and is still safe for smugglers, as it is controlled by the authorities, and despite the laws and legislation against drugs and drugs trafficking, the police and judiciary do not work seriously with these drug dealers because of the material gains that the Iranian regime receives.
Drug trafficking and availability in Iran which form along with Afghanistan and Pakistan drug trafficking golden trio has helped it in recent years to make billions of dollars that helped Iran strengthens its arsenal. Saudi writer Maher Muhammad Bawardi tweeted:” Iran is the largest drugs manufacturer and distributor in the Middle East with the annual revenues of over 20 billion dollars under the supervision of Iran’s revolutionary guards”
This statement may be an intelligence report that Iran is using its influence in Iraq to export drugs to neighboring countries, especially the Arab Gulf states, Lebanon, Syria, and the rest of the world.
Analysts indicate that this situation made Iran the capital of drugs smuggling in the world, as it connects production farms in Afghanistan with consumption markets in other countries, and located on the main smuggling route of weed, which extends from Afghanistan to Western Europe, as well as 95 percent of Heroin comes from Azerbaijan.
A clear proof that Tehran is dealing with drugs is that the Romanian authorities announced a few weeks ago that they had seized a shipment that included 1.5 tons of hashish and about 750 kilograms of “Captagon” pills coming from the port of Latakia in Syria, which is under the control of Bashar al-Assad’s forces and the Iranian militias that support Damascus.
Last July, the Italian police confiscated a shipment of drugs containing 84 million “amphetamine” tablets, comingfrom the Assad regime’s controlled areas. A “Der Spiegel” investigation confirmed that the Lebanese “Hezbollah” is contributing to the revitalization of this trade, especially since Iran is the one who rents the port ofLatakia.
In the middle of last November, the General Administration of Customs in Kuwait announced that it had found quantities of “alshbo”, stuffed in a shipment of fish coming from Iran to the country.
Economy Cracks The Structure Of Society:
In October last year, Iran officially stated that the country’s poverty rates have reached unprecedented levels, at the same time when the regime is suffering from US sanctions and inflation is rising and the collapsing of the local currency.
The Iranian Statistics Center revealed in an official report that the percentage of Iranians living below the poverty line has reached 55 percent, which was always confirmed by economic reports and denied by Iran over the past ten years.
According to these reports, at present, with acute decline in the value of the national currency, and the persistence of high inflation rates, at least 50 percent of Iran’s population lives below the poverty line, while according to official statistics, in 2011 it was about 18 percent of the population lives below the poverty line, and this rate increased in 2018 to about 24 percent, and in 2019 it reached 35 percent.
The official report devoted to family expenditures and income revealed the low standard of living for Iranians at a time when the currency witnessed an unprecedented decline.
The inflation rates for some food products threaten to remove dairy products and legumes from the tables of Iranian families, and the Iranian consumption of most food products has significantly decreased due to low income.
US sanctions mainly affected Iranian oil exports, among other fields of the economy, which prompted Tehran to rely on non-oil exports, witnessing a decline in the past months due to the restrictions of “Covid-19” and the closure of the borders.
The economy condition caused protests across Iran, so in November 2019, protests erupted after the authorities suddenly raised the price of petrol to 200 percent, and the Iranian regime responded with extreme violence against the protesters and jailed many of them
Government Encourages Childbearing
Iran’s Supreme Leader Ali Khamenei warned in June of last year against the aging population. A few days later, the Iranian Minister of Internal affairs, Abd al-Reda Rahmani Fazli, announced the formation of a committee to address these concerns.
In recent years, the supreme leader has frequently pointed to the need to increase Iran’s population to 150 million, more than twice the population of Iran, which is currently around 83 million. As Iran got into a hard crisis of poverty, unemployment, and population.
Underage victims of society
An extremist religious regime has controlled Iran for the past 41 years. It encourages the marriage of minor girls. At the end of last year, Masoumeh Ebtekar, Iranian President Hassan Rouhani’s assistant, revealed alarming figures related to underage marriages inside the country. Ibtikar indicated that the legal loopholes are what allow marriage with minors to take place inside Iran.
The Iranian president assistant considered that the increase in marriage loans granted by her country to those wishing to formally engage could be a back door to marrying minors. Notably, the number of underage marriages has increased significantly during the years 2019 and 2020. The Judicial Committee in the Iranian Parliament always rejected a bill to ban the marriage of minors. Unofficial figures indicate that there are tens of thousands of divorced teenage girls in Iran. International human rights reports warned of an increase in marriages with underage girls in Iran, calling on the Iranian authorities to make legal amendments, as they considered that this marriage constitutes a case of “sexual abuse” of children.
Last December, the Iranian Statistics Center revealed large numbers of Iranian minors who married and gave birth to thousands of children within 3 months.
Reports revealed that as many as 7,323 girls under the age of 14 were married in Iran between March and May 2020.
This comes even though Iran ratified the Convention on Child Rights last year, which stipulates that the age of 18 is the legal age for marriage in the country. However, Iranian sources revealed that the way of life in Iranian society under the “religious” regime continues to dominate customs and traditions, especially concerning women’s rights.
Last year in November, Iranian researcher Claudia Yaqoubi shed light on the phenomenon of temporary marriage in Iran, and how the regime uses this phenomenon to strengthen its position on the political and social levels, in light of the decline in freedoms in the country, especially among women.
She added in an interview that “literary works of short stories and films before and after the Iranian revolution confirm that temporary marriage in Iran is a tool of political control and imposing power on Iranian women.”
The numbers circulating on prostitution in Iran are inaccurate, as they are all based on the efforts of the Ministry of Health and some social centers, and journalists, or filmmakers, and they reveal a massive spread of prostitutes. Informal studies have shown that nearly 40 percent of female prostitution workers are married, and tens of thousands work in Iranian cities.
Our sources revealed that any woman in Tehran can stand on the road and wait for passing cars, to receive various sexual relation offers for an agreed price.She added that despite the spread of several sites on Telegram to facilitate prostitution, many women prefer the street, as it is closer to the customer, and no one can take advantage of digital recordings of them, in a society that offers no sympathy for women, who are exposed to excessive domestic violence.
Violence Against Women
In a case that attracted national attention, on May 21st, 2020 a father beheaded his 14 years old daughter “Romina Ashrafi”, after she ran away with a young man to marry him, the reduced sentence on the father sparked anger in Iran and revived the debate over the Iranian penal code, as the Iranian judiciary sentenced the father to nine years and the young man with whom the girl escaped to two years in prison.
Tara Sepehri Far, a researcher with the New York-based Human Rights Watch organization said, “The bill is still below international standards and never dealt with all aspects of domestic violence against women and she explained that it did not address child marriage. And marital rape, in addition to adequately defining domestic violence.
However, many Iranian human rights activists and lawyers see the bill as a step forward and reflect the changing dynamics of Iranian society, which they describe as a step ahead of the government in cases of violence against women.
It is worth mentioning, the full draft of the bill has not yet been announced, but the summary published on the government’s website states “any act that causes physical or emotional harm or reputation damage to a woman or leads to restricting her freedom or social rights is considered a crime.
The draft law also deals with sexual harassment and forcing women to perform sexual acts without intercourse. Sending an unwanted sexual message, text, or picture to a woman to demand sexual relations or forcing her to have sex may result in prison sentences ranging from six months to two years and up to 99 lashes, in addition to monetary fines.
The summary of the bill indicates that the judiciary is required to establish and maintain centers that provide support for victims of violence. The security forces are also obligated to establish a special police unit to protect women.
However, according to analysts, the bill will face a major test in Parliament, which includes a conservative majority that often stands at odds with the government that favor centrist.