A year on, Iran’s Raisi faces economy in trouble

Iran's Supreme Leader Ayatollah Ali Khamenei (R) hands over documents during Ebrahim Raisi's inauguration as president of Iran on August 3, 2021 in Tehran. (AFP)
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Updated 02 August 2022

A year on, Iran’s Raisi faces economy in trouble

  • Raisi was elected in June last year with less than half of voters turning up after his major rivals had been disqualified by electoral bodies
  • His record is more mixed as Iran remains hit by biting sanctions that keep it isolated from global financial systems.

TEHRAN: A year after Iran’s President Ebrahim Raisi took power, his government has curbed the Covid pandemic but faces a sharp downturn of the sanctions-hit economy as nuclear talks remain stalled.
Having pledged to help especially the poor, the ultraconservative cleric now faces runaway consumer prices that have sparked protests.
Raisi was elected in June last year in a ballot for which less than half of voters turned up, after his major rivals had been disqualified by electoral bodies.
He was inaugurated on August 3 by the supreme leader, Ali Khamenei, and sworn in two days later as head of government in the Islamic republic.
When he formed his cabinet, Raisi named his two top priorities: controlling the region’s worst Covid outbreak, and turning around the battered economy.
Iran’s vaccination campaign, long hampered by US sanctions, was massively stepped up using Chinese and Russian drugs.
For Hamidreza Taraqi, a top official in the Islamic Coalition Party, part of the conservative alliance backing the Raisi, the government has “succeeded in curbing the coronavirus and in eliminating its effects.”
The UN World Health Organization says more than 58 million Iranians, or some 70 percent of the population, have now been fully vaccinated.
“Raisi’s government did oversee widespread coronavirus vaccinations after the state reversed course and approved foreign vaccine imports,” said Henry Rome of the US-based consultancy Eurasia Group.
But on the economic front, Raisi’s record is more mixed as Iran remains hit by biting sanctions that keep it isolated from global financial systems.

Iran had hoped for greater prosperity after its 2015 landmark nuclear deal with major powers gave it sanctions relief in exchange for curbs on its atomic program.
But former US president Donald Trump in 2018 unilaterally withdrew Washington from the agreement and reimposed a punishing sanctions regime.
The economic pain has deepened popular distrust in Iran toward the government, both under the previous president, the moderate Hassan Rouhani, and under Raisi.
The darker mood, say analysts, was reflected in the record abstention rate at last year’s election, which came after the repression of protest movements, especially from December 2017 and again in November 2019.
Iran had returned to economic growth under Rouhani after the 2018-2019 recession.
But, hit by Trump’s sanctions which dramatically curbed crucial oil exports, Iran’s GDP per capita is now not expected to recover to its pre-crisis level until next year, according to the International Monetary Fund.

In April 2021, with President Joe Biden in the White House, talks on rescuing the nuclear accord began in Vienna.
The negotiations resumed in November 2021 after a pause around Iran’s presidential polls but have yet to produce a breakthrough, while the Raisi government faces a budget deficit that economists consider abysmal.
Inflation, which has been eroding household purchasing power for years, in June reached 54 percent from a year earlier, according to the latest official data.
And the rial currency, which had recovered somewhat early this year on hopes of a deal in the nuclear talks, has since resumed its rapid descent, and reached a new low in June against the dollar.
Then in May, the government started to lift state subsidies on flour and to raise prices on food staples such as oil and dairy products — measures that especially penalized the poor whom Raisi had championed.
“The country’s economic horizon is far from clear... and economists predict we will face more rising prices,” Mehdi Rahmanian, editor of the reformist newspaper Shargh, told AFP.
The rising cost of living has driven protests in several Iranian cities in recent months.
Much now depends on how the nuclear talks go, said Rome.
“If the nuclear negotiations collapse, as appears likely,” he said, “Iran will likely face more significant economic and social turmoil.”
 

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Palestinian PM blasts ‘racism’ of Israeli minister

Updated 7 min 15 sec ago

Palestinian PM blasts ‘racism’ of Israeli minister

  • Israeli finance minister Bezalel Smotrich: ‘There are no Palestinians, because there are no Palestinian people’

RAMALLAH, Palestinian Territories: Palestinian prime minister Mohammad Shtayyeh on Monday blasted as “inflammatory” remarks made by far-right Israeli Finance Minister Bezalel Smotrich that Palestinians do not exist.
“There are no Palestinians, because there are no Palestinian people,” Smotrich said Sunday, quoting French-Israeli Zionist activist Jacques Kupfer, speaking at an event in Paris according to a video circulating on social media.
“After 2,000 years of exile, the prophecies of Jeremiah, Ezekiel and Isaiah are beginning to come true and God is gathering his people, the people of Israel are returning home,” Smotrich said.
“There are Arabs around who don’t like it, so what do they do? They invent a fictitious people and claim fictitious rights to the land of Israel, only to fight the Zionist movement,” he added.
Smotrich last year became a minister in the cabinet of Israel’s veteran leader Benjamin Netanyahu, which analysts have called the most right-wing government in the country’s history.
“It is the historical truth, it is the biblical truth... the Arabs in Israel must hear it, as well as certain Jews who are confused in Israel, this truth must be heard here at the Elysee Palace (in Paris), and at the White House in Washington, and everyone must hear this truth,” Smotrich continued.
Shtayyeh, speaking before a cabinet meeting of the Palestinian Authority on Monday, said the “inflammatory statements are consistent with the first Zionist sayings of ‘a land without a people for a people without a land’.”
He said the comments were “conclusive evidence of the extremist, racist Zionist ideology... of the current Israeli government.”
Smotrich and his Religious Zionism group have a history of making incendiary remarks about Palestinians.
In February, Smotrich called for the Palestinian town of Hawara in the occupied West Bank to be “wiped out” after two Israelis were shot dead by an alleged Hamas militant.
Hundreds of rampaging Israeli settlers later torched Palestinian homes and cars in the West Bank town.

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Iraq to hold provincial elections on November 6

Updated 20 March 2023

Iraq to hold provincial elections on November 6

  • Elections for the councils, the first in a decade, will take place in 15 of 18 Iraqi provinces

BAGHDAD: Iraq’s parliament has set November 6 as the date for elections for provincial councils, powerful bodies that were dissolved amid anti-government protests in 2019.
“Provincial elections will take place on November 6, 2023,” a statement from parliament said Monday, after lawmakers agreed on the date overnight.
The elections for the councils, the first in a decade, will take place in 15 of 18 Iraqi provinces, excluding the three provinces in the autonomous Kurdistan region of northern Iraq.
The provincial councils, created by the 2005 constitution following the fall of Saddam Hussein’s regime, carry relatively significant power in federal Iraq, including allocating the budgets for health, transport and education.
The last provincial elections took place in 2013, when loyalists of then prime minister Nuri Al-Maliki came out on top.
The next provincial elections should have taken place in 2018, but were postponed.
A year later, amid vast anti-government rallies, protesters demanded and obtained the dissolution of the provincial councils, in part because critics accused them of being rife with corruption.
Alaa Al-Rikabi, an independent MP who emerged in the aftermath of the October 2019 protest movement, condemned the return of the councils.
“We refuse to allow them to be reinstated,” he said, adding that they “open the door wide to corruption.”


Iraq PM to hold Turkiye talks on water, Kurdish rebels

Updated 20 March 2023

Iraq PM to hold Turkiye talks on water, Kurdish rebels

  • Shia Al-Sudani to meet Turkiye’s president Recep Tayyip Erdogan on his first visit to Iraq’s northern neighbor since he came to power in October
BAGHDAD: Iraqi Prime Minister Mohamed Shia Al-Sudani will visit Turkiye on Tuesday for talks including on scarce water resources and the rebel Kurdistan Workers’ Party (PKK), a government source said.
Sudani is set to meet Turkiye’s President Recep Tayyip Erdogan on his first visit to Iraq’s northern neighbor since he came to power in October, an adviser to the head of the Iraqi government said, speaking anonymously.
“The two main issues are water and the presence of the PKK in northern Iraq,” he added, referring to the rebel group that has been fighting the Turkish army for decades.
War-scarred Iraq is now digging ever deeper for water as a frenzy of dam-building, mainly in Turkiye, sucks water out of the region’s two great rivers, the Tigris and Euphrates.
The Tigris and the Euphrates both have their sources in Turkiye, and Baghdad has long accused Ankara of withholding water in dams that choke the rivers, dramatically reducing flows into Iraq.
According to official Iraqi statistics from last year, the level of the Tigris entering Iraq has dropped to just 35 percent of its average over the past century.
Declining river flows have been made worse by a dire lack of rainfall in recent years, coupled with poor irrigation practices in Iraq that see excessive exploitation of water from the rivers.
Amid criticism, Turkiye’s ambassador to Iraq, Ali Riza Guney, ruffled feathers last July when he said, “water is largely wasted in Iraq” and called on people to “use the available water more efficiently.”
Sudani will also discuss with Erdogan the presence of rear bases of Kurdish fighters from the Turkish PKK rebels in northern Iraq, which Ankara has repeatedly sought to root out in air and ground operations.
The rebels have kept up a deadly insurgency for Kurdish self-rule in southeastern Turkiye since 1984.
Turkiye has dozens of military facilities in northern Iraq for use in its war against the PKK, which Ankara and its Western allies blacklist as a “terrorist” group.
In July 2022, Iraq blamed Turkiye for artillery strikes on a park in Iraqi Kurdistan that killed nine civilians, including women and children.
Turkiye denied its troops were responsible and accused the PKK.

Sudan factions agree to form transitional government April 11: Spokesperson

A man waves a Sudanese national flag while taking part in a protest march. (File/AFP)
Updated 20 March 2023

Sudan factions agree to form transitional government April 11: Spokesperson

  • The parties have agreed on a committee for drafting a new constitution that will include 9 members of the civilian groups, one from army and another from RSF

CAIRO: Sudan’s political factions have agreed to form a new transitional government on April 11, Khalid Omar Yousif, the spokesperson for the signatories to the political settlement, said on Sunday.
Sudan’s military leaders who took over in a coup in late 2021 have been negotiating a deal with the civilian political parties previously in power aimed at restoring a civilian government.
The parties have agreed on a committee for drafting a new constitution that will include nine members of the civilian groups, one from the army and another from the powerful paramilitary Rapid Support Forces, Yousif said.
They will sign the transitional framework for the agreement early next month and a constitutional declaration on April 6.
The formation of a new government following the October 2021 coup is a result of Western, Gulf, and UN-sponsored talks, and it could revive flows of badly needed economic assistance to Sudan.

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As economy worsens, Lebanese juggle dizzying rates for devalued pound

Updated 19 March 2023

As economy worsens, Lebanese juggle dizzying rates for devalued pound

  • Country moving toward a cash-based, dollarized economy given spiralling inflation and restrictions by banks on transactions

BEIRUT: When Caroline Sadaka buys groceries in the Lebanese capital Beirut, she keeps her phone in hand – not to check her shopping list but to calculate the spiralling costs of goods now priced at volatile exchange rates that vary by store and sector.
As Lebanon’s economy continues to collapse, an array of exchange rates for the local pound has emerged, complicating personal accounting and dimming hopes of fulfilling a reform requirement set out by the International Monetary Fund.
The government’s official exchange rate was set at 15,000 pounds to the US dollar in February, a nearly 90 percent devaluation from the longtime peg of 1507.5.
But the Central Bank is selling dollars at a rate of 79,000 to the greenback while the finance minister intends to calculate tariffs for imported goods at 45,000 pounds.
The parallel market rate is meanwhile hovering around 107,000 pounds and changing daily. Supermarkets and fuel stations are required to post signs with the value they’ve adopted for the day, but the rate is changing so fast that many are pricing in the relatively stable USdollar instead.
Examining a can of tuna, Sadaka illustrated the daily quandary faced by shoppers. “This doesn’t have a (logical) price. If you look, it’s in Lebanese pounds, so is this the price? Or is this an old price, and there’s now a price in dollars?,” she wondered.
She quit her job as a school teacher which paid her in local currency, the value of which has decreased by more than 98 percent against the dollar on the parallel market since 2019.
That’s when the economy began unraveling after decades of unsound financial policies and alleged corruption.
To solve the exchange rate confusion, the government needs to implement one unified rate. This is among pre-conditions set by the International Monetary Fund nearly a year ago for Lebanon to get a $3 billion bailout.
But the lender of last resort says reforms have been too slow. They have met resistance from politicians who are shielding vested interests and dodging accountability.
In the meantime, the country has been moving toward a cash-based and dollarized economy given spiralling inflation and restrictions by banks on transactions.
Shop owner Mahmoud Chaar told Reuters the exchange rate was changing so fast that his business was losing money overnight.
Like many business owners, Chaar has to pay in US dollars to import goods but sells in Lebanese pounds. One day, he had sold all his goods based on one rate but woke up the next to find it had jumped nearly 10,000 pounds per US dollar.
“Basically, we lost in the exchange rate difference what we had made in profit,” Chaar told Reuters.
Economist Samir Nasr said the varying rates across sectors were making personal accounting “messy” for Lebanese and unifying them was more urgent than ever.
“What is required is a full group of reforms and steps that will allow for the economic situation to stabilize in general — and would then allow the exchange rate to be unified,” he said.