Iran Official Claims Iraq Has Released All Of Its $10 Billion Debt

Mehdi Zare’, Professor of the International Research Institute of Seismology said: “There are about 12 million marginalized people in Iran, and almost 10 million of this population are directly facing problems caused by the water crisis.”

In an interview with Hamshahri online, he said water scarcity and the subsidence of the earth have deteriorated in Iran and according to geologists, seven provinces now face dire situations.

One of these provinces is Isfahan, where land subsidence has reached the residential areas. Tehran province is also not safe from subsidence and in recent months, many cases of land subsidence were witnessed on highways around the city.

Iran ranks fourth in land subsidence in the world and 30 provinces of the country are involved in it. It is said that the land subsidence in Iran is more than five times the world average.

The main reason for land subsidence in Iran is the draining of underground water and the digging of deep wells since the 1060s, Zare explained.

Last month, Iran International obtained documents revealing that Iranian officials are aware of dangerous land subsidence but are unwilling to share it with the public.

A confidential letter revealed that about 550 square kilometers of land in and around the capital Tehran (about the size of the UK city of Manchester or the US city of El Paso, Texas) is sinking an average of over 13 centimeters (about 5.12 inches) per year.

According to another document, 380 cities and towns and 9,200 villages are at risk of land subsidence.

Mohammad-Ali Mohseni-Bandpey, a member of the parliament's health committee warned in an interview with ILNA news website on Saturday that if a solution is not found, the issue may turn into a social, political, economic, and health crisis.

He said the government's huge debts to the social security organization and the organization's debts to hospitals, as well as the lack of sufficient drug production in the country are the most important factors contributing to the crisis.

During the past years, the authorities attributed medicine shortages in the country to the US sanctions, claiming that the sanctions targeted ordinary people. However, import of humanitarian items, including medicine, is exempt from US embargoes. In fact, Iran has been purchasing around two billion dollars' worth of medicines and raw materials annually for producing drugs from Europe and India.

The Foundation for the Defense of Democracies had previously written in a report that corruption, not sanctions, is causing medicine shortages in Iran.

While European countries had launched the INSTEX mechanism with the permission of the US to export humanitarian items to Iran, they discontinued it in March of last year because of Iran's unwillingness to use this mechanism.

In a joint statement in March, Germany and France said the Iranian leadership has chosen to act against the interests of its people by refusing to cooperate in the export of medicine and other life-saving goods.

Bandpey further noted that in a meeting held last week, the ministers of labor, health, intelligence and the representatives of the Central Bank, as well as the Revolutionary Guard acknowledged that if a solution is not found, this issue may turn into a big problem.

He also referred to the 180-million-dollar debt of the social security organization to hospitals and the government's “ten times larger” debt to this organization, saying that there is a shortage of medicine even in the emergency rooms of hospitals and people have to look for medicines outside the hospital, meaning in the black market.

He underlined that the country cannot produce enough drugs, because the cost of the medicines is more than government mandated prices. Iran's economy is mostly controlled by the government, especially imports of goods, which needs foreign currencies.

Earlier this year, Bandpey said the pharmaceutical companies are moving to other countries as there are "serious hurdles” to their activities.

In January an official of Iran’s drug importers union, Mojtaba Bourbour, challenged government officials’ claims about self-sufficiency in production of medicines and said not only up to 90 percent of raw material is imported from countries such as China and India, but also some medicines are imported from China but sold under Iranian labels.

Hadi Talebian Moqaddam, a trade official, told a news website in Tehran that soon Iran will invite Pakistan to hold talks about bartering commodities and goods, with an eye “on creating free trade.” He mentioned textiles as an area where Pakistan can supply Iran, although importing rice also has a long history.

US sanctions imposed since 2018 have seriously limited Iran’s oil exports and its revenues, which are vital for supplying hard currency to a government that controls the economy and is responsible for providing food and medicine to the population.

Although the oil exports have substantially increased in the past two years, the revenues have not been sufficient for all the needs of a population reaching 85 million and an inefficient economy mired with corruption and international isolation.

The US Energy Information Administration recently estimated that Iran’s total oil exports in 2023 will reach $46 billion, but it admitted that this a rough calculation based on global energy prices, not on actual amounts Iran charges its customers.

In fact, Iran and Russia, two sanctioned countries, offer large discounts to their buyers. The amount of the discounts remains secret, but some have said that Iran might be selling its oil in clandestine ways to small Chinese refineries for as low as $40 per barrel.

What is clear is that Iran must use middlemen who mix its oil shipments with cargoes from other countries, transfer the oil to other tankers somewhere in south-Asian waters and deliver it to China as Omani, Malaysian or Iraqi oil.

In addition, it is not easy to repatriate the money in hard currency since Iran is cut off from the international banking system mainly due to US sanctions. That too costs money. All these cuts into Iran’s oil revenues, which are probably half of what the US estimate shows.

Iran’s confrontational foreign policy and its controversial nuclear program have left it far behind other regional countries like Saudi Arabia that have huge oil revenues and invest it back into infrastructure. Saudi oil revenues in 2023 are expected to reach $223 billion – at least five times that of Iran.

The picture becomes clearer if per-capita oil revenues are considered. Saudi per capita income from oil in 2023 is estimated at $6,450 and Iraq’s $2,356, while Iran’s per capita revenue is a meager $516.

In this situation, the clerical regime in Tehran boasting of its revolutionary credentials has to turn to barter trade with Pakistan, a country facing its own serious financial crisis.

Current US sanctions are not the only external reason for Iran’s economic crisis. The first serious economic sanctions began appearing 15 years ago when the international community discovered a secret Iranian nuclear program, and the UN Security Council began imposing sanctions. Since then, Iran’s average rate of economic growth has been zero, although international sanctions were lifted when the JCPOA nuclear deal with world powers was signed in 2015. After a two-year reprieve, the United States pulled out of that accord and imposed its own unilateral sanctions.

In a recent article, a relatively independent website in Iran argued that the nuclear program has cost the country 4 trillion dollars in the past 15 years, in lost growth, inflationary damage, and lack of domestic and international investments. The issue, the article argued is not just lost oil revenues but its cumulative impact on the economy, including loss of business confidence.

While Iran sits on the world’s second largest natural gas reserves, its tiny Persian Gulf neighbor Qatar exports $120 billion of LNG annually. Iran cannot match that because no Western company is willing to provide capital and technology to expand Iran’s gas fields or tap into new ones. Iran's annual losses are estimated to be much more than what Qatar is exporting.

Robert Malley, who was appointed as Special US Envoy for Iran in early 2021 and conducted nuclear negotiations with Tehran has been suspended without pay, pending an investigation of his security clearance status.

“It is imperative that the Biden administration disclose how long it has withheld from Congress that consequential diplomatic engagements have been led by someone other than Mr. Malley and when the alleged mishandling of classified information took place, a statement issued Friday by UANI said.

Malley was apparently “on leave” at least since the beginning of May, but the administration never disclosed the real reason for his absence as it was holding indirect talks with Iran.

Malley was one of the architects of the controversial 2015 JCPOA nuclear deal with Iran and was also an advisor to President Barack Obama.

“Congress must investigate whether any misconduct colored Mr. Malley’s counsel to President Obama, President Biden, or both. Further, as a co-equal branch of government, Congress must insist that President Biden comply with federal law and afford it the opportunity to review and approve any agreement or so-called ‘understanding’ with the Islamic Republic over its nuclear program,” UANI added.

Many lawmakers in the US Senate and House of Representatives have voiced concern over reports about the Biden administration planning to make an interim and limited deal with Iran in unwritten form to avoid Congressional review.

The Iranian energy minister Ali-Akbar Mehrabian, who is accompanying President Ebrahim Raisi in his trip to the central province of Kerman, made the remarks as residents of a large number of cities in the province are procuring water via water tankers stationed around the towns while the weather temperature is over 40 degrees Celsius (104 in Fahrenheit scale). 

He claimed that the drinking water problem has been elevated in 3,000 villages and the issue will be resolved in the 10,000 remaining villages by the end of this Iranian year (March 19, 2024). 

Iran has huge numbers of villages in remote rural areas who depend on support for survival. Although on decline, the rural population is roughly about 21 million people, a little less than a fourth of the country's population.

During his trip to the province, Raisi also inaugurated several water projects, which he promised would solve the problem in Kerman. 

Water issues have been the main topic of Raisi’s visits to Iranian provinces in recent months, taking him to Sistan-Baluchestan and Khuzestan provinces that have very little clean water and temperature as high as 51 degrees (about 124 in Fahrenheit). 

Earlier in June, the water was also out in the capital Tehran for several days with tankers distributing water to residents.  

In January, CEO of Iran Water and Wastewater Company, Atabak Jafari, issued a warning saying that 270 cities and towns are suffering from acute water shortage as water levels at dams have dropped to critically low levels. 

As drought persists across Iran, more underground water is exploited for irrigation, depleting natural reservoirs formed during thousands of years. Old and unregulated irrigation methods, as well as an aging urban water distribution infrastructure compound the shortage. 

An inefficient agricultural sector, overgrazing of rangelands and forests, aggressive over-extraction of groundwater resources, and most importantly the regime’s mismanagement are among the main causes of water bankruptcy in Iran.