NCRI – At a time when French, German and Italian companies are rushing to expand their trade with Iran, four key ministers in the cabinet of the Iranian regime’s President Hassan Rouhani have complained to him in a surprising letter about the bankrupt economy, especially in the months following the July 14 nuclear agreement with the P5+1 countries.
The ministers of economic affairs Ali Tayebnia, labor Ali Rabei, industries Mohammadreza Nematzadeh, and defense and armed forces Hossein Dehghan have signed the letter. Their letter was published on Sunday, October 4, by the state news agency Mehr. The Defense Minister signed on to this letter due to his ministry’s dominion over a large section of Iran’s economy.
The ministers stated that the market has plunged 42% in the past 19 months with the market for copper and steel each experiencing a reduction of 53% and 31% respectively. The profit for banks has dwindled to an extent that there is no promising prospect for them in the next five years and the automotive industry is on the verge of shutting down as the number of vehicles in their inventories has surpassed 100,000.
Their letter contains annexes with tables that detail these reductions.
Experts on Iran believe that this “open letter” reflects a political crisis in Iran and that economic problems have deepened contrary to the expectations of many western analysts.
Among other things, Rouhani’s ministers have criticized “incoherent policies within the systems inside the country”. This refers to the unrivaled hegemony of Ali Khamenei’s Office and the Revolutionary Guards (IRGC) over a large segment of the Iranian economy that has rendered Rouhani’s government inconsequential in economic affairs.
Concurrent with the publication of this letter, Mohsen Ranani, an economics professor supportive of the regime told state media: “Iran’s economy is like a patient suffering from various poisons caused by the economic policies that has lost its incentive and trust in his physician which is the ruling system.”
The four ministers expressed their concern about foreign companies entering Iran’s market and considered it to the detriment of domestic producers. They wrote: “Not only will foreign investment not remedy the situation, but it will aggravate the crisis.”
On Monday, October 5, Vice President Mohammad Bagher Nobakht refused to comment on the letter and deferred it to after he consults with Rouhani.
The ministers warned that although the July 14 nuclear accord is “excellent,” but it will reduce consumption in the market in anticipation of a reduction in prices. They warned that Tehran’s stock market will lose anywhere from 1000 to 1500 points in the near future.
|
Industry (Jan 2013 to Sep 2015) |
Drop in market value (in millions of tomans) |
|
Petrochemicals |
42.530 |
|
Basic metals (steel, lead, zinc, copper, aluminum) |
34.760 |
|
Petroleum products (refinery products, lubricants) |
30.120 |
|
Mining of metals (iron, lead, zinc) |
22.390 |
|
Banks and loan institutions |
15.174 |
|
Multi-product companies (Ghadir, Omid, Pension Fund, National Advancement Group) |
13.407 |
|
Communications (communications and cell phones) |
5.950 |
|
Cement, lime, plaster |
5.551 |
|
Technical and engineering services (including Mapna,…) |
4.756 |
|
Other industries |
4.792 |
|
Sum of reduction in value of market |
179.429 |
|
Description of good |
Unit |
Jan 2014 |
Mar 2015 |
Sept 2015 |
Reduction in price in Sep 2015 to prices in Jan 2014 (%) |
|
Oil |
$ per barrel |
106 |
50 |
42 |
60% |
|
Steel |
$ per ton |
300 |
290 |
140 |
53% |
|
Copper |
$ per ton |
7400 |
5900 |
5100 |
31% |
|
Aluminum |
$ per ton |
1750 |
1750 |
1500 |
14% |
