Tehran Makes Dubious Claims About Economic Prospects

 

The report was quickly disputed by the United States, according to Radio Free Europe / Radio Liberty. State Department spokesperson Jeff Rathke reiterated points made by several officials last week, emphasizing that Iran is not yet open for business and that a deal trading sanctions relief for nuclear restrictions is not yet secured.

Rathke also pointed out that the specific claims made by Mehr News Agency were difficult to verify because “not a single individual or company is identified.” In so doing, Rathke seems to have raised the possibility that the report is false and is simply intended to portray the Iranian economy as being closer to recovery than it is in fact.

Such claims can possibly be expected to calm some of the concerns of the Iranian people, which have become particularly pronounced in recent days as Iranian social media has come to focus not only on the sanctions-crippled economy and general government mismanagement, but also on how those things have contributed to increasingly vast disparities between rich and poor.

On Monday, Business Insider pointed out that this trend has been spurred on by the spread of images of a Porsche sports car that was crashed by 20 year-woman with the 21 year-old grandson of a high-ranking religious cleric in the passenger seat. Luxury vehicles are symbols of excess in the Islamic Republic not only because they are unobtainable to the vast majority of Iranians but also because poor relations with countries that export those cars have driven up their local prices to as much as 360,000 dollars.

As the wealth of a small elite in Iran has kept up with these price tags, the overall population has suffered the opposite trend. Business Insider points out that while 22 percent of Iranians lived below the poverty line in 2005, in 2013 the figure was reported to be 40 percent. On the occasion of International Workers Day, the National Council of Resistance of Iran pointed out that among Iran’s working class the poverty rate is as high as 90 percent.

Meanwhile, the leaders of the country seem more concerned with the social effects of this situation than with actually addressing the disparities. Business Insider reports that in the midst of the controversy inspired by the Porsche crash, the nation’s supreme leader was compelled to respond. But far from saying that the excessive wealth of children of Revolutionary Guards and other well-connected individuals is wrong, Khamenei simply declared that it is wrong for such people to show off their wealth because doing so “creates psychological insecurity in the society.”

The oil ministry’s claims about a forthcoming US delegation may reflect a similar preoccupation with economic propaganda, over and above economic reform. Indeed, UPI reported on Monday that another effort by the Iranian regime to present itself as an economic powerhouse may have led to its burning bridges of possible future economic cooperation in Asia.

The report indicates that Iran has cancelled a gas field development deal with India, citing objections to ongoing delays in the project, many of them related to economic sanctions.

Iranian officials have lashed out at various efforts by foreign countries to either enforce or remain in compliance with current economic sanctions. Last week, in a speech at New York University, Iranian Foreign Minister Mohammad Javad Zarif asserted that the US was not taking appropriate measures to advance a nuclear deal because it had announced new charges against individuals and businesses accused of selling banned items to Iran.

Many critics of current US policy toward Iran and its nuclear program have expressed fears that improved relations with the Islamic Republic would undermine international support for economic sanctions. If true, the oil ministry’s claims about interested Western parties would seemingly justify those fears.

On the other hand, the regime’s frustrated response to compliance by India and others suggests that the sanctions remain firmly in place at least for now. India is Iran’s second largest Asian oil buyer, but in March it purchased no oil from the Islamic Republic in order to remain within defined limits for the year.