Inflation down... but so are prospects

I was perusing the International Monetary Fund's World Economic Outlook, released in April 2010, when a statistic jumped out at me. The rate of inflation in the Islamic Republic had fallen to 10.3% in 2009, from 25.4% the previous year.

What was going on? Had the Ahmadinejad administration shown more economic know-how than has been generally recognized? Most economists have faulted the government for runaway expenditure, low currency reserves, a moribund manufacturing base, a skewed balance of trade (especially if oil exports are taken out of the equation), rising unemployment...

I sought the opinion of two Iranian economists who wish to remain anonymous. They had, of course, already seen the figures and were not particularly surprised.

Falling inflation in a booming environment is a sign of good stewardship, but it can also be the by-product of an economic slowdown. In other words, less activity translates into less purchasing power which puts pressure on the prices of goods. In the case of the Islamic Republic, the rate of inflation is also subject to the massive import of cheap goods (a policy of the Ahmadinejad government, by the way), especially from China. While the price of meat may have risen drastically to 12,000 to 13,000 toumans a kilo, milk to 350 toumans a liter, potatoes to 1,000 toumans a kilo (and the list goes on), the basket of goods and services which is used to calculate the rate of inflation also includes cheaper shoes, cheaper cars, cheaper textiles, cheaper television sets, and so on, from China. This may push down the rate of inflation, but it also has a devastating effect on the manufacturing sector, which will lead to a greater economic downturn in the future. The appearance of imported fruit and vegetables in Iranian markets also paints a gloomy forecast for the country's agriculture.

Emerging countries in the region saw a similar fall in average inflation -- 13.5% to 6.6% -- in 2008 and 2009. However, the Islamic Republic's rate -- 25.4% down to 10.3% -- was still much higher than the average, while some countries even showed deflationary tendencies. The price of a basket of some 350 goods and services had actually fallen (a negative rate of inflation) by 2.8% in Iraq and 4.9% in Qatar over the same period.

A look at the growth of gross domestic product (GDP) in the Islamic Republic provides part of the explanation. In 2008, the economy grew an unimpressive 2.3%, which is still better than last year's disastrous 1.8%. In comparison, the average growth for the region's emerging countries during those two years was 5.1% and 2.4%. Iraq's growth rate was 9.5% and 4.2%, while Qatar's economy surged 15.8% and 9% in the same period. Kuwait had a 6.4% increase in GDP in 2008, but its economy actually contracted by -2.7% last year. However, no one is exactly weeping for Kuwait because it is one of the richest countries in the world when it comes to GDP per capita (estimated by the IMF at over $31,482  per Kuwaiti citizen last year. The Islamic Republic's GDP per capita is estimated to have been $4,460 last year).

Economic growth also has an effect on employment, or to be more precise unemployment in the case of the Islamic Republic. 800,000 new workers enter the country's labor force every year, which means that more than 800,000 jobs must be created annually to chip away at the unemployment rate. This rate is pretty much a mystery. The Islamic Republic has repeatedly advanced a figure of about 11%, whether economic growth has been high or low, which suggests some creative accounting. Most economists estimate the rate is closer to 25% of the labor force, and as high as 34% when it comes to young people. Reza Rahimi Nassab, Majlis representative and member of the legislature's social committee, recently said that the unemployment rate in Lorestan province had reached 40%.

The government's optimistic 4th economic plan called for the creation of 1.2 million jobs last year and it is highly unlikely that figure has been reached. The same plan was supposed to bring about an 8% rise in GDP (actual figure: 1.8%) and reduce unemployment to 8%. The Majlis is currently debating whether the 4th economic plan should continue to be implemented, or whether the country should embark on the 5th economic plan in the middle of this Iranian calendar year.

Economists believe that the Islamic Republic must maintain economic growth of 7% to 8% in order to stabilize the unemployment rate, and that its GDP must increase by 9% to 10% to begin to put a significant dent in the unemployment figures. Unfortunately for the legions of young people entering the market, the IMF predicts that the Islamic Republic's economy will grow by no more than 3% annually over the next three years.

As a futile exercise in going down memory lane, I took a look at GDP per capita in Iran and several other countries in 1978, at the time of the revolution, and 30 years later. I present the stark figures below (These are World Bank statistics, not adjusted for inflation, and converted to US dollars applying market exchange rates, which explains the difference with the IMF's numbers). Conclude what you will...

Iran          $1,997                 $4,027 (2007)
Malaysia   $1,238                 $8,209
Hungary   $1,552                 $15,408
Mexico      $1,595                 $10,231
Oman        $2,566                 $15,272 (2007)
France      $9,193                 $44,507
UK            $5,785                 $43,541
Saudi Arabia $9,373            $19,021
Spain         $4,239                $35,214

Ahmadinejad the veteran?

My previous post concerning a photo of Mahmoud Ahmadinejad and Mojtaba Samareh Hashemi in the early 1980s provoked an exchange in the comments section between Mark Pyruz, who has a much better knowledge of Islamic Republic military issues than I, and a reader who remained anonymous:

Mark Pyruz: homy, have you seen this photo purportedly of Mahmoud Ahmadinejad as a soldier during Jange Tahmili (the Imposed War)?
http://img194.imageshack.us/img194/7725/208901210017l600.jpg
It would be interesting to know the dates of your student Ahmadinejad and this soldier Ahmadinejad, for purposes of authentication. (He's definitely older in the later.)

Anonymous: To Mark Pyruz,
It is not A.N. on that picture taken during the war. The man standing on the right side of the picture is colonel Sayyad Shirazi, perhaps the most famous army commander during the Iran Iraq war.

I won't get into Ali Sayyad Shirazi's military career, which did indeed include senior commands during the Iran-Iraq War. He was assassinated outside his Tehran home in 1999 by members of the MKO who had disguised themselves as garbage collectors. He was at that time a brigadier general, I believe. (If I'm mistaken, I'm sure I will be corrected on this by Mark or another reader). Leader Ali Khamenei and President Mohammad Khatami attended his funeral.

The issue of Ahmadinejad's military career is a much murkier affair. The official web site of the presidency states, 'During the war imposed on Iran, Dr. Ahmadi Nejad was actively present as a member of the volunteer forces (Basij) in different parts and divisions of the battlefronts particularly in the war engineering division until the end of the war.' Rumors have circulated for years that Ahmadinejad has exaggerated his war record, but the dissenting voices have grown louder since the disputed election of June 12.

Towards the end of July 2009, conservative Tehran Mayor (and Ahmadinejad rival) Mohammad Bagher Ghalibaf uttered some extremely harsh words about Ahmadinejad's management and policies: 'I don't consider Ahmadinejad a revolutionary or a member of the party of God or a follower of the Leader or a manager or honest. Mr. Ahmadinejad, with all his being, fools himself and then fools everyone else.' But more relevant to the issue of Ahmadinejad's military career, Ghalibaf, who fought in the Iran-Iraq War from an early age and was the commander of the Panj Nasr division by the time he was 22, said, 'Ahmadinejad does not have even one day's experience prior to the revolution, he did not receive even one slap for the cause of the revolution. If he did something, he should come and tell us where. Ahmadinejad did not see the war or the front. If he had been on the front for only one day, he would have boasted about it for a thousand days.'

More recently, on February 28, 2009, Mehdi Khazali, a medical doctor who owns a publishing house, wrote a scathing piece on his blog entitled 'Ahmadinejad's mischief in his biography.' Before getting to the blog post, a few words on Khazali and, perhaps more importantly, his father.

Mehdi Khazali is the son of Ayatollah Abolghassem Khazali, member of the Assembly of Experts since its inception, one of the authors of the final draft of the Islamic Republic's constitution (he claims that Ayatollah Ruhollah Khomeini did not want women to become president, which could be true), the head of the Ghadir Foundation (he famously called for the Muslim celebration of Ghadir to replace Now Rouz as the Iranian new year's day) and one of the most mealy-mouthed, blubbering, and Messianic supporters of Ahmadinejad to roam the land of Iran. Sorry to have lost my journalistic objectivity there for a second, but Ayatollah Khazali actually said that Ahmadinejad's election to his first term was supported by the Hidden Imam, or Messiah, of Shiites. In short, not exactly an unbiased observer when it comes to Ahmadinejad. The ayatollah's son, however, begs to differ.

Mehdi Khazali has been such a regular critic of the government that the Guardian Council disqualified him from running in the last legislative elections and he was prevented from being a candidate in the national medical organization's board elections. On June 29, 2009, Mehdi was arrested for participating in street protests and for slandering the president by claiming on his blog that Ahmadinejad has Jewish roots and that he was compensating by being zealously Muslim and anti-Israel. Mehdi was inexplicably tried by the Special Court of the Clergy and was released on bail a month later. In the mean time, his father had disowned him in a highly publicized statement.

Mehdi Khazali's short prison stay did not calm his ardor and he has been writing on his blog on an almost daily basis. Which brings us to his February 28 post.

'In the half-finished biography on his personal web site, Ahmadinejad has craftily mixed himself up with the warriors [of the Iran-Iraq War],' Mehdi Khazali began. 'I knew he had never been to the front, but out of caution, I asked the commander of the Revolutionary Guards during the Imposed War, brother Mohsen Rezai (NB One of the four presidential candidates on June 12 and not a great admirer of Ahmadinejad). He also confirmed the absence of the aforementioned on the battlefronts. Of course, the heads of the other two branches of government (NB Speaker Ali Larijani and his brother judiciary chief Sadegh Larijani) never saw the front either, but at least they do not make any pretenses about war and being warriors.'

He continued in his post, 'I remember the good old days, when I told my interrogator that the heads of the three branches had never been to the front, and that when we were fighting in the war, many others were jockeying for appointments and consolidating their positions. The interrogator responded, That's not a criteria! I told him, If the Iraqis had made it to Tehran and your honor had been in their hands, you would have understood whether its a criteria or not.'

Khazali later quoted from Ahmadinejad's personal web site, 'Read this paragraph from the biography of Mr. Ahmadinejad: At the beginning of the war, I was 25 years old. My mother and my wife, and all the mothers and wives whose children and husbands were defending their country on the fronts, were patiently raising a resistant, brave, and pious generation.' Khazali accuses Ahmadinejad of equivocation in this sentence in order to pretend that he was also fighting on the front.

Khazali then wrote in his deliciously irreverent style, 'Dear Haj Mahmoud, stop grandstanding. When were you on the front? Which division, which battalion, which area, which operation? No dear one, in those days you were again behind the lines, jockeying for position. Even afterwards, you ran Hashemi Rafsanjani's campaign in your neighborhood so you could get a job in Hashemi's government. You kissed the hands of the gentlemen so they would pat you on the back and... Come on, be yourself. Don't run after halos and battlefronts (NB The halo refers to Ahmadinejad's claim that a halo formed around his head as he was addressing the UN General Assembly in 2005.'

I've posted the photo purportedly showing Ahlmadinejad during the Iran-Iraq War and referred to by Mark Pyruz below. It should be pointed out that even if the person in the photo is Ahmadinejad, it does not clarify the question of whether he ever saw any combat or whether he spent the war years behind the lines:

Here are several shots of Ali Sayyad Shirazi, which my anonymous reader says is the person in the photograph above:

I'd be interested to know what the readers think and invite you contribute any additional information you may have on this issue.

The way they were: Ahmadinejad and Samareh Hashemi in the early 1980s

The following photo shows a group of university students in their mid-twenties relaxing in a dormitory room at Tehran's Elm-o-Sanat (Science and Technology) University, circa early 1980s.

On the extreme left of the photo you can see Mahmoud Ahmadinejad, an engineering student, leaning back with a smirk on his face and sporting a chin-curtain beard. Fifth from the left is the bearded Mojtaba Samareh Hashemi, currently his senior adviser and a key figure in his political life.

It is hard not to think of what was going through those young minds back then. Could the young Ahmadinejad imagine that such university dorm rooms would be devastated by armed goons and security forces, the students beaten to a pulp, a few decades later during his presidency?

Samareh Hashemi is considered to be a very influential political figure in the Islamic Republic due to the patronage of arch-conservative cleric Ayatollah Mesbah Yazdi, his ties to the Basij and the Islamic Revolutionary Guards Corps, his family affiliations (he is the nephew of the late Prime Minister Mohammad Javad Bahonar and the current Deputy Speaker Mohammad Reza Bahonar) and his symbiotic relationship with his childhood friend Mahmoud Ahmadinejad. Newsweek called him an Iranian Karl Rove in its May 23, 2009 issue, referring to the architect of George Bush's ascension to the presidency. Last year, he resigned from his post as senior presidential adviser to become the head of Ahmadinejad's re-election campaign. He is believed to have been behind Ahmadinejad's letters to President George Bush and Chancellor Angela Merkel. Ahmadinejad's recent letter to President Barack Obama coincidentally was sent after Samareh Hashemi's reinstatement within the president's inner circle a few months ago.

Here is a more recent photo of Samareh Hashemi and Ahmadinejad.

And to complete this walk down memory lane, here's the reaction of students at Ahmadinejad and Samareh Hashemi's alma mater, Tehran's Elm-o-Sanat University which has become a hotbed of dissent, on April 13, 2010, when Samareh Hashemi tried to give a speech on the nuclear issue. The students walked out and began singing the protest anthem 'Yareh Dabestaniyeh Man':


---

As an addendum to this post and to continue the debate launched in the comments below, I'm posting the photo referred to by Mark Pyruz, purportedly of Ahmadinejad during the Iran-Iraq War, and some photos of Ali Sayyad Shirazi in a separate post, which you can go to by clicking here.

Three death sentences in Kahrizak trial: Justice served?

Mohsen Rouholamini

The trail of murder and torture is long, but the quest for justice will seemingly end behind the closed doors of a military courthouse with death sentences against three unnamed defendants. 

In an exclusive report published on April 21, 2010, a conservative news site claimed that three death sentences will be delivered in the case involving the torture and murder of at least three protesters held in the Kahrizak detention center south of Tehran.

The trial, presided by Judge Mohammad Mossadegh, is widely considered to be a gesture on the part of the regime to placate public opinion and put an end to the uproar caused by the murder, torture, and abuse of dozens of post-election protesters by punishing a small number of relatively junior officers for a tiny fraction of the crimes committed by the Islamic Republic's security forces. The judiciary has not announced any plans to prosecute anyone for the murders of dozens of other protesters, the documented cases of torture, or prison rape.

Farda News, not to be confused with Radio Free Europe/Radio Liberty's Radio Farda, wrote today, 'Based on what Farda has heard, the court trying the defendants in the Kahrizak case is ready to issue its verdicts and apparently death sentences have been issued for three of them.'

Farda did not explain why it would be privy to court verdicts which have yet to be announced publicly.

It is also unclear whether the secretive trial held behind closed doors will lead to justice or will ease concerns about human rights abuses in the Islamic Republic. The Armed Forces Judiciary Organization announced the start of the court hearings in a carefully worded and customarily uninformative statement released on March 9. The names of the 12 alleged defendants were withheld, but it was stated that the session was held in the presence of the 'next of kin, other plaintiffs, and their lawyers.'

Judge Mossadegh announced on the same day, 'Given that a portion of the case file contains information and topics whose publication would be detrimental to public order and discipline in the country, it is forbidden for those present in this court to publish information about the trial.'

Since the Armed Forces Judiciary Organization was trying the case, it was assumed at the time that the defendants were solely members of the Islamic Republic's security forces. The Farda News report however alleges, 'Two of the individuals sentenced to death are police officers and the other person is one of the louts and thugs who had been in Kahrizak from before.'

'Louts and thugs' -- arazel va obash -- is an unsavory term often used by the Islamic Republic when it is engaged in 'cleaning up' crime-ridden neighborhoods. The lack of information concerning this individual is particularly worrisome since he could be a common criminal set up as a scapegoat in this case. There are also reports that the judiciary is hiding the actual number of political prisoners by charging such individuals with common crimes.

Amir Javadifar

Thousands of protesters in the post-election unrest of the summer were arrested by security forces and hundreds were held at the Kahrizak detention center, a fancy name for the collection of dark, stiflinng and unhygienic silos and partially buried structures, in conditions considered so inhumane that Leader Ali Khamanei was compelled to order it shut in late July. The conservative Farda News proudly proclaims this fact in its short report.

After months of denial and a less-than-convincing investigation into the abuse of prisoners and protesters by a special committee of the legislature, the Islamic Republic finally admitted that three individuals had been tortured to death at the facility, largely because one of the victims was Mohsen Rouholamini, 25, son of regime insider Abdolhossein Rouholamini. The other two victims finally recognized by the regime are Amir Javadifar, 25, and Mohammad Kamrani, 18. Farda News writes in a factually-challenged segment of its report, 'The representatives of the Majlis and officials of the judiciary have repeatedly stressed the importance of pursuing this case with determination and strongly punishing the transgressors.'

Mohammad Kamrani

Rouholamini's head had been battered by a blunt instrument and his jaw was shattered. Then Health Minister Kamran Lankarani said that he had died from meningitis, a claim that Dr. Ramin Pourandarjani, a young conscript who visited Kahrizak once a week as a part of his military service, refused to second.

Pourandarjani later died in suspicious circumstances at the dormitory of the military medical services building. Officials initially said that this key witness of the abuses at Kahrizak had committed suicide. The report of the Majlis's special investigative committee does not even mention Pourandarjani and the case is in legal limbo.

Javadifar, a student at Ghazvin University, died while he was being transferred from Kahrizak to Evin Prison. A friend who saw his body at the morgue told RFE/RL's Radio Farda, 'He had a fractured skull, one of his eyes was almost crushed, all the nails on his toes had been extracted, and all of his body was bruised.' Kamrani was arrested in Tehran's Vali Asr Square on July 9. He was tortured at Kahrizak and died of his injuries in Mehr Hospital.

The special investigative committee's report also fails to mention a number of other alleged deaths at Kahrizak, notably that of Ramin Aghazadeh Ghahremani, who died of his injuries after he was released. Aghazadeh Ghahremani was mentioned by Mohsen Rouholamini's father in a subsequent complaint about the special investigation's lack of zeal.

Saeed Mortazavi

But the greatest shortcoming of what appears to be a sham trial is the absence of at least two senior officials in the defendants' box: Then Tehran Revolutionary Prosecutor Saeed Mortazavi and National Police Commander Esmail Ahmadi Moghaddam.

Mortazavi said that he was on vacation when the events occurred, a dog-ate-my-homework excuse (incidentally untrue) which has apparently convinced the judiciary of his innocence. Mortazavi was promoted to the post of deputy prosecutor general, then promoted again to head the national agency which fights financial corruption and smuggling.

Ahmadi Moghaddam announced that the atrocities were limited to the Kahrizak detention center and that they had been carried out by rogue elements.

His plea of innocence has also been accepted.

Former President Khatami prevented from traveling to Japan, say opposition legislators

Former reformist President Mohammad Khatami was prevented from traveling to a nuclear disarmament conference in Hiroshima, Japan, on Thursday, April 15, 2010, according to Parleman News, the news site of the Imam Line Faction of the Majlis.

Parleman News cited an 'informed source' as saying, 'This evening (Thursday), Seyed Mohammad Khatami was supposed to travel to Hiroshima, Japan, to attend the annual conference on nuclear disarmament.' But, according to the source, Khatami was banned from traveling abroad.

It is unclear from this article whether the alleged measure against the former president was taken at Tehran's Imam Khomeini Airport as he was preparing to leave the country or whether Khatami was informed of the travel ban before embarking on the visit. But Serajeddin Mirdamadi, a reformist journalist who is generally considered reliable, told Radio Farda today that according to information he had managed to obtain, the Islamic Republic's Foreign Ministry informed Khatami of the ban before the trip and that Khatami's office had been unable to get an explanation despite repeated requests to the ministry.

Ghodratollah Alikhani, an outspoken reformist member of the Majlis, said on Friday, April 16, that Khatami was not under any travel restrictions, but that 'because of some interests which have been determined in some circles, Mr. Khatami was respectfully asked not to participate in this conference.'

Neither Khatami's personal site, nor those of his two foundations, the Baran Foundation and the International Institute for Dialogue Among Cultures and Civilizations, commented on the news related by Parleman News. (Khatami's personal site does however deny another report in regime-affiliated outlets, according to which he recently met Ayatollah Hashemi Rafsanjani and discussed opposition leader Mir Hossein Mousavi's shortcomings.)

The news about the travel ban could have been planted by one of the Islamic Republic's intelligence services which regularly employ disinformation as a tool of psychological warfare. Khatami, who along with Mousavi and Mehdi Karroubi is considered one of the leaders of the opposition, could be the target of a campaign to belittle and insult him.

In early March, the semi-official Fars News Agency, close to the Islamic Revolutionary Guards Corps, reported that a travel ban had been imposed on Khatami. The report was subsequently denied by Khatami's lawyer, Mahmoud Alizadeh Tabatabie. (For the March report on this blog, please click here) The next day, on March 10, Javan newspaper, close to the regime, accused Khatami of wearing a suit instead of clerical garb in his new passport photograph. (For this blog's report, please click here).

But media outlets close to the regime are also good barometers of things to come. Analysts read newspapers like Keyhan, run by Leader Ali Khamanei's representative Hossein Shariatmadari, on a daily basis to glean not only what is happening in the backrooms of power, but also to determine the marching orders of the regime's various bodies.

Fars news and other news sources close to the government have been strangely silent about this alleged development. It would have been expected that they would at least gloat. Consequently the silence appears orchestrated. Khabar online, purported by some to be close to Majlis Speaker and Ahmadinejad rival Ali Larijani, posted a piece on the alleged travel ban without citing Parleman News.

Were the March stories simply attempts to humiliate Khatami and take away some of his presidential aura or were they trial balloons, hoisted to see the reaction of the body politic and also to herald things to come?

Alireza Nourizadeh, director of the Center for Arab and Iranian Studies, in London, told the Voice of America that he believed Khatami was already under a travel ban at the time of the Fars report, but that he had denied the news to save face and not rock the boat. This time, however, Nourizadeh said, Khatami was officially invited to the conference in Japan and was unable to issue a credible denial.

The veracity of the Parleman News report cannot be confirmed.

This blog was unable to find a nuclear disarmament conference taking place in Hiroshima until reader Wiitekr pointed out that the InterAction Council will be holding its 28th annual meeting in that city from April 18 to 20. (For the press release, please click here)

Whatever the truth -- the Khatami camp will have to issue a denial or confirmation in time -- this is the first instance that a news source which is not close to the regime has reported that such an unprecedented step has been taken against the popular former president.