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Proposed Law Gives Clerics Control Over Iran’s Central Bank

Maryam Sinaiee
Maryam Sinaiee

Iran International

Aug 18, 2022, 08:40 GMT+1Updated: 17:20 GMT+1
Iran's central bank headquarters in Tehran
Iran's central bank headquarters in Tehran

Former officials of the Central Bank of Iran (CBI) have opposed a law that would give a clerical council control over the bank’s monetary and economic policies.

In a letter addressed to the speaker of the parliament, Mohammad-Bagher Ghalibaf, former officials pointed out that Supreme Leader Ali Khamenei has twice before “directly or indirectly” stopped the proposed legislation and asked Ghalibaf to remove it from the parliament’s agenda.

The signatories of the letter protested that a provision in the law would set up a clerical council within the central bank that would supersede all other decision-making mechanisms and in fact would set monetary policy. This they argued, would strip the bank of its ability to professionally execute its duties as the guardian of the national currency and protector of the country’s monetary stability.

The letter which was released to the media this week argued that the proposed legislation focuses on transformation of the central bank's structure and monetary policies and fails to offer any new solutions or initiatives that could satisfy high-ranking religious authorities’ and the people’s demand for the elimination of interest and resolving the problem of riba.

Riba, a concept meaning usury or charging unreasonably high-interest rates, is prohibited under Sharia law. Lending money, according to Sharia, should be a charitable act with no interest involved, rather than making profit for the bank that could lead to exploitation and loansharking.

However, this religious concept is incompatible with modern economic realities and bank interests are not only common in Iran but sometimes quite high.

“The purpose of [establishing] clerical councils in [banks in] all Islamic countries is supervising the execution of Islamic-type contracts and elimination of interest from financial and credit facilities, not setting monetary, financial, and economic policies and [dealing with the issues] of inflation and liquidity,” the letter to the parliament speaker said.

The letter was signed by over 130 former officials including former central bank governors Akbar Komijani, Mahmoud Bahmani, Valiollah Seif, Tahmasb Mazaheri, and Mohammad Hossein Adeli, spanning three decades, as well as former bank board members and executives of other state and private banks.

The former banking officials also suggested that the central bank be given 18 months to come up with its own solutions and propose any required legislation through the government.

In recent years the CBI has lost its professional independence, being forced by government to print money and create a huge money supply that has led to 54-percent inflation rate.

After the Islamic Revolution of 1979, the Iranian banking system was altered to accommodate Islamic laws, particularly the ban on interest. Since then, authorities have resorted to various solutions to justify paying and charging interest without being accused of riba.

One of the solutions that banking authorities and high-ranking clerics agreed on was to redefine the contract between the bank and the individual or company taking a loan to conform with the Islamic notion of Murabahah which means cost-plus financing as well as other similar contracts.

In Murabahah contracts, the two sides agree to the cost and markup of the loan, which in essence is interest coated with religious jargon.

Besides banks and finance and credit institutions, there are also Islamic non-profit granting funds in Iran called Gharzolhasaneh (no-interest charity) funds.

All Iranian banks charge interest that is approved by the Central Bank at least once a year in proportion to the inflation rate and demand high value collateral items such as real estate.

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Iran Pressuring Filmmakers To Withdraw Anti-Crackdown Statement

Aug 17, 2022, 18:59 GMT+1

The Islamic Republic’s security apparatus is increasing pressure on the signatories of a statement against Iran’s crackdown on popular protests to rescind their signatures. 

Informed sources told Iran International Wednesday that the Intelligence Ministry as well as the security division of the country’s Ministry of Culture and Islamic Guidance have threatened more than 100 film industry figures to withdraw their signatures from a May statement titled “Lay down the gun”. They have been threatened to be banned from working in the film industry and leaving Iran unless they withdraw their signatures. 

The statement called on military and security forces who “have become tools for cracking down on the people,” not to suppress protesters during popular demonstrations in May.

The artists and moviemakers have been asked to announce that the signing of this statement was done under pressure by Mostafa Alehahmad and Mohammad Rasoulof, two filmmakers who were arrested July 8 as part of the crackdown on the signatories. 

According to reports, under the threat of security forces, about 15 people have so far withdrawn their signatures from the statement.

Iran International’s sources also said that 10 documentary makers have been informed that they are banned from leaving the country and that a list of artists who are banned from working will be announced next week.

In July, Iran’s judiciary said award-winning film director Jafar Panahi has been sent to Evin prison to serve his six-year sentence, after he was arrested as he was protesting the detention of Rasoulof and Alehahmad at the prosecutor’s office of the Evin prison.


Iranian Scientist To Lead UN University’s Think Tank On Water

Aug 17, 2022, 18:40 GMT+1

The United Nations University, the organization’s academic and research arm, has appointed prominent Iranian scientist Kaveh Madani as the next Director of the Institute for Water, Environment and Health. 

The UNU announced on Wednesday that the globally recognized environmental scientist, educator, and activist will take up the post of UNU-INWEH Director as of February 2023.

Madani came to UNU from Yale University in 2021, and has been working as Head of the Nexus Research Program at the Dresden-based UNU Institute for Integrated Management of Material Fluxes and of Resources (UNU-FLORES). He also serves as a Research Professor at the City University of New York Remote Sensing Earth System Institute. Madani used to be a tenured faculty member of the Centre for Environmental Policy at Imperial College London.

“I’m delighted that Prof. Madani will lead UNU-INWEH, after having focused on the nexus between water, waste, and soil at UNU-FLORES. His impressive experience in both academia and public service will help UNU-INWEH bridge the gap between water resources research and the practical needs of decision makers in the Global South”, said UNU Rector David Malone.

“Professor Madani has an impressive range of experience on water issues, both in the research and policy worlds, and at the national and international level,” said Michael Small, the chair of the UNU-INWEH International Advisory Committee. 

Madani served as the deputy head of Iran’s Environment Organization for nearly one year after returning to the country upon an invitation by individuals close to former president Hassan Rouhani. He resigned and left the country after the Revolutionary Guard arrested several of his colleagues, mainly former expats on espionage charges.

Iran’s Currency Rises Over Prospects Of Reviving Nuclear Deal

Aug 17, 2022, 12:44 GMT+1

Iran’s currency rose on Wednesday, going below the important threshold of 300,000 rials to one US dollar as optimism increased about the prospects of a nuclear deal.

The rial was trading just below 300,000 in Tehran’s unofficial exchange market for the first time since mid-May. The rial had fallen to as low as 330,000 a few weeks ago as hopes for a nuclear agreement with the United States were fading.

Iran responded to a European Union proposal to resolve the nuclear issue on Monday, in what seemed to offer the best chance since March to reach an agreement.

Iran’s currency began falling in early 2018 when signs emerged that former President Donald Trump was planning to withdraw from the 2015 nuclear agreement and possibly impose sanctions on Iran.

Once the US announced its withdrawal and imposed crippling oil export and banking sanctions, the currency gradually fell ninefold by 2021.

The rial has fallen 4,500-fold since the 1979 revolution that toppled the monarch. The currency was trading at 70 against the dollar in 1978 compared with 3,300 in 2017 and around 300,000 now.

Economists in Tehran have said in recent days that even if a nuclear deal is reached, the rial will not recoup most of its losses and will probably trade at around 240,000 to the dollar, because of serious structural economic issues.

Exiled Queen Says Ready To Return Home After Iran Is Free

Aug 17, 2022, 11:54 GMT+1

Iran’s exiled queen Farah Pahlavi says the people of Iran "want the return" of the Pahlavi monarchy, and that she is ready to go back home.

The former queen made the remarks in an interview with the Italian newspaper Libero during a recent trip to Egypt to participate in the ceremonies on the death anniversary of her husband, Mohammad Reza Shah Pahlavi, the last king of Iran. 

She referred to popular protests in recent years in which Iranians chanted slogans in support and appreciation of Reza Shah Pahlavi – the founder of the dynasty and father of Mohammad Reza Shah, saying that "It is shocking for me” that after all these years and all the Islamic Republic propaganda against the Pahlavi rule, people and politicians have noticed the Shah's services to the country.”

Reza Shah introduced many social, economic, and political reforms during his reign, ultimately laying the foundation of the modern Iranian state. Therefore, he is regarded as the founder of modern Iran.

Expressing hope that she will return to Iran, Farah Pahlavi added, "The most important issue is freedom of Iran and the freedom of Iranians. If one day I can return to my country, it will be a great joy for me."

Referring to the "severe poverty of the majority of Iranian people", the "mistreatment" of women and the protests by workers and teachers, she said that "most Iranians do not want this theocratic government and many young people are in favor of the monarchy."

Nearly Half Of Young People Want To Leave Iran - Poll

Aug 17, 2022, 11:50 GMT+1
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Iran International Newsroom

Almost half of Iranian youth want to leave the country amid pessimism about their future, a recent opinion survey conducted from abroad shows.

Asked if they would go and live in a foreign country given the chance; 49 percent of people aged 18-29 said yes. The percentage among the general population was fully one-third.

Statis Consulting, a US based opinion research outfit focusing on Iran, conducted the poll among 1,246 Iranian residents aged 18 and older in July.

“Based on the sample, there is a 95 percent confidence that the margin of sampling error is within ± 2.7 percentage points,” Stasis said.

Iran’s economic situation has drastically deteriorated since former President Donald Trump abandoned the 2015 nuclear agreement with Iran (JCPOA) and imposed crippling sanctions. But since the election of ultra-conservative Ebrahim Raisi as president in 2021, lifestyle pressures have also increased, with harsher enforcement of Islamic rules.

Seventy-seven percent of those surveyed responded affirmatively when asked if“Iranian youth do not see prosperity in their future.” Only 20 percent disagreed with the statement.

Fifty-three percent of respondents said that “government officials restrict the liberties of Iranian youth by interfering in their lifestyle. This number is even worse among young people aged 18 to 29; sixty-four percent believe this statement to be true.”

Public defiance of forced hijab began in December 201, with a woman standing on a main street in Tehran and removing her headscarf
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Public defiance of forced hijab began in December 201, with a woman standing on a main street in Tehran and removing her headscarf

Since early June, the government has been cracking down on forced hijab violators, with enforcing tougher restrictions. Thousands have been stopped on the streets by ‘morality police’ and many have been detained and fined. Security forces arrested many women who took part in an anti-hijab civil disobedience action on July 12, when many women came to the streets with no headscarves.

Among the reasons why Iranians have left the country in recent years, the overall state of the economy is the main factor, according to the survey. The economy “was mentioned by fifty-seven percent of respondents, followed by political or religious freedom (twenty-six percent), and hope for a better life (twenty-five percent). Only five percent mentioned looking for higher education is the main reason for Iranians leaving the country.”

Fifty-five percent of respondents did not show confidence in President Raisi regarding issues that matter to young people. Only 35 percent believe that problems facing the youth are among Raisi’s priorities.

“Among young people aged 18 to 29, sixty-five percent say issues concerning young people are not Raisi’s priority. Only twenty-seven percent completely or somewhat agree. Moreover, most Iranians do not believe that President’s Raisi can boost economic opportunities for Iranian youth (fifty-nine percent),” Stasis reported.

The government and parliament dominated by hardliners loyal to Supreme Leader Ali Khamenei have dragged out negotiation with the United States to revive the nuclear agreement for more than a year. Sanctions have stayed in place and the economic crisis has deepened.

Overall inflation stands at 54 percent and food prices have risen by more than 100 percent since Raisi took office last August, according to official figures.

Statis also concluded that “those who reside in urban centers and who hold a college degree are more likely to say that they would prefer to leave Iran than Iranians who live in rural communities and who do not hold college degrees. Forty-three percent of Iranians who have a college degree say they would prefer to live in a foreign country.”

Interestingly, Germany is the top choice (16%) for those who want to leave, followed closely by Canada (15%) and the United States (14%).