Baseball91's Weblog

May 3, 2012

The Hunger Games in Iran

In the most extensive economic reform since the government implemented gasoline rationing in 2007, President President Mahmud Ahmadinejad’s Targeted Subsidies Law (TSL) legislature to reduce state subsidies on food and energy passed in December 2010. Over a five-year period, this policy allegedly will phase out previous subsidies costing $60 billion to $100 billion annually which had benefited Iran’s upper and middle classes most. And this program was before the critical issue of grain has caught the daily attention of Iranian citizens.

Price controls, subsidies, and other rigidities weigh down the economy, undermining the potential for private-sector-led growth. Iran’s economy is marked by a private sector with activity typically limited to small-scale workshops, farming, and services. Significant informal market activity flourishes, with widespread corruption.

With a fertility rate of 1.87 children born per woman (2012 estimate), the behavior of the young does not reflect the philosophy of its aged supreme leader. Iran continues to suffer from double-digit unemployment and underemployment among Iran’s educated youth, resulting in many seeking jobs overseas. The overall economy is marked by inefficiency in the state sector, statist policies which create major distortions throughout the system, and reliance on the oil sector which provides the majority of government revenues. The continued rise in world oil prices in the last calendar year ending in December 2010 increased Iran’s oil export revenue by roughly $28 billion, easing some of the financial impact of international sanctions. President Mahmud Ahmadinejad’s government faces a depreciating currency fueling inflation, stagnant growth GNP, with an expansionary fiscal and monetary policy on top of economic sanctions.

With 60 million people between the age of 15 and 65, 26.37 million out of a total population of 78.68 million are employed. Twenty percent of the population lives below the poverty line, with n estimated unemployment rate of over fifteen percent. The economic outlook based upon the economies of its trading partners is poor for 2012. Those export partners are in 2010, Spain 4.7%, Italy 6.2%, South Korea 6.7%, Turkey 8% (prior to unrest in neighboring Syria, sponsored by Iran), Japan 11.6%, India 14.8%, and China 19%.

Those with financial resource benefit from currency arbitrage. Iran was still trying to recover from the Post Traumatic Stress to a generation of young men, as well as from the financial cost of the Iran-Iraq War. Is it a wonder that there is epidemic drug addiction of 1.2 million drug-dependent users out of the 3 million users in a nation of 78 million? As Iran was ramping up its executions of drug offenders, the UN drug agency was offering bon mots, without regard to the evidence requirements in a court system run by the Islamic clerics.

So was the madness of the leadership of Iran based upon impending hunger? And until the leadership was toppled, the world would look on as it did in North Korea, letting a government do anything it desired to its own people? What was the motive to get atomic weapons in these two countries when sanctions were in place, starving populations.

Using food as weapons. Under Western sanctions aimed at Iran’s disputed nuclear program, financial measures have frozen Iranian firms out of much of the global banking system which has ended up hindering grain buying. It is quite a system of capitalism which has been in place since September 2008 when it come to morality. So this was economic justice in free markets which place economic sanctions that end up starving the masses? India’s Hinduja Group which owns a Swiss bank has said that it would continue food trade finance with Iran no matter the sanctions. Who better than the Indians to know firsthand the effects of hunger.

It was reported in January 2012 that major European Union banks have pulled back from financing grain shipments destined for Iran. These are calculated policies by people who think they have power. Nobly, U.S. agribusiness giant Cargill announced in February that it planned to continue grain shipments to Iran. Iranian farmers do face a shortage of feed for their huge livestock flocks as private-sector grain importers are unable to arrange payments, traders said. Though food shipments are not targeted.

The Iranian government, playing Russian roulette in its nuclear programs, bought wheat on international markets at a frantic pace in March, buying 2.5 to 3 million ton of bread wheat at a premium to global prices as private Iranian flour mills found they could not purchase in the face of toughened western sanctions. There were Australian exports of 91.5 million megatons of wheat to Iran in the January-February period, according to official data. With a marketing year beginning October 1st for wheat imports from Australia, Iran even made rare purchases from the U.S., in a sign of building strategic stockpiles of grain, anticipating harsher sanctions if not a military conflict over its nuclear program. Australian exports, per the Australian Bureau of Agricultural Resource Economics and Sciences show exports to Iran almost 50 percent higher than the entire 61.4 KMT shipped to Iran the prior year, with no shipments in 2010-11.

Grain traders are no longer booking cargoes on Iranian ships to transport grain exports from Ukraine because of difficulties with payments following European Union sanctions on Iran. Poised to make substantial feed grain deals, local Iranian grain traders reported that Iran bought more than 2 million ton of bread-making wheat recently. The cash-rich Iranian government has its representatives carrying large sums of cash to arrange payments for its wheat via a series of routes, including Turkey. How much security was provided to these representatives they traveled to places like Ukraine (the leading provider of grain to Iran), Australia, Kazakhstan, and Turkey? And was the euro the currency of choice for these transactions?

The Iranian government seems to have only solved its bread wheat problem, without addressing how to feed its animals. A poor harvest in Iran at a time of political tension means Iran still has unresolved feed grain import requirements as the private-sector feed buyers have the same problems in payments as the flour mills, one grain trader said. Iranian grain buyers now face further difficulties in arranging shipments, with an ability to only buy with delivery to Ukrainian ports. An Ukrainian grain trader said because banks refuse to transfer money to Iranian companies due to the embargo, “Traders cannot book Iranian vessels. This has nothing to do with the government of Ukraine.”

Ukraine exported about 445,000 tons of grain in the first half of the 2011-12 to Iran, which included 92,000 tons of feed barley and 357,600 tons of feed corn, per data compiled by the UkrAgroConsult consul. Yerkin Delmanov, deputy chairman of the Ak Bidai grain terminal in the Caspian Sea port of Aktau, said 30,000 tons of barley and wheat had been loaded for Iran since March 16. Kazakhstan expects to ship at least 500,000 tons of grain to Iran this season, Deputy Agriculture Minister Muslim Umiryayev has said, matching last season’s shipments to Iran which was the biggest taker of Kazakh grain in the 2009-10 marketing year, before volumes dropped off last year.

The conflict in the story of hunger is the invisible issue of pride. When, since Adam and Eve, pride has always been an invisible sin. Those western sanctions include language in the measure passed by Congress of the United States that Iran must release “all political prisoners and detainees; cease its…violence and abuse of Iranian citizens engaging in peaceful political activity; investigate the killings and abuse of peaceful political activists…and prosecute those responsible; and make progress toward establishing an independent judiciary.” In other words, the European Union as well as the government of the United States are trying to steal the national sovereignty of the Iranian people, directing a government in ways that governments in India or China would never allow. In exporting democracy to all the corners of the earth, the western powers, ignoring the pride of the local people, still act as if the days of empire have never ended. Though the Islamic Republic in Iran never yet has started to respect the sovereignty of any nation — per the history in the link below — nor the people who live within its own borders.

https://baseball91.wordpress.com/2012/02/15/swift-movement-against-iran/

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1 Comment »

  1. November 7, 2013 New York… Iranian 2003 Nobel Peace laureate Shirin Ebadi strongly criticized the human rights record of President Hassan Rouhani, accusing his government of lying about the release of political prisoners, citing a dramatic increase in executions since he took office this year. Ebadi, a U.S.-based human rights lawyer who has lived outside Iran in self-exilesince 2009, in an interview Tuesday with The Associated Press, pointed to a spreading support for a hunger strike by human rights lawyer Abdolfattah Soltani and three others in a Tehran prison protesting inadequate medical care, which on Monday was joined by about 80 more prisoners at another prison. She said in the interview that though Rouhani may have the reputation as a moderate reformer, so far his new government, when it comes to human rights, has given “bad signals.”

    With the limitations of the power of the Iran’s presidency, Shirin Ebadi pointed in The Associated Press interview to the control of judiciary affairs as well as security under Ayatollah Ali Khamenei and the ruling Islamic clerics, along with the Revolutionary Guard. The editor of the reformist newspaper Bahar was released on “hefty” bail after two days following his publishing an article lat week on Shiite Islam which, she said, was deemed to be offensive by authorities in the Islamic Republic, a predominantly Shiite nation. This newspaper remains closed, Ebadi told the The Associated Press, and since Rouhani was inaugurated in August, executions has doubled compared to one year ago; 40 people have been executed in the last 10 days, including some political prisoners.

    Comment by baseball91 — May 3, 2012 @ 1:49 PM | Reply


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