The Battle Against Corruption in Iran
Nikolai BOBKIN | 21.08.2016 | WORLD / Middle East

The Battle Against Corruption in Iran

Iran is accustomed to eking out an existence under the paralyzing pressure of economic sanctions. Despite many years of discrimination against the Iranian economy by the US and its allies, Iran is nevertheless today one of the most developed countries in Muslim world. Early in 2016 the process of lifting the sanctions against Iran began, but as it turned out, working in the new environment was no easier than it had been with all the restrictions in place. Now the situation is complicated not only by external pressures, but also by internal obstacles.

One of those is corruption. Confidence in President Rouhani’s government is sliding. And although criticism is coming from all sides, the same complaints are being heard: Rouhani’s team was not prepared to jump on the opportunities that opened up for the country in this post-sanctions era. Mohammad Nahavandian, the Iranian president’s chief of staff, claims that the president’s rivals blame him for the gap between the high expectations of this new life without sanctions vs. the reality on the ground in Iran, stating that «the decision to sign and implement the agreement was made at the highest level».

When it comes to politics, the highest level in Iran means the spiritual leader of the Islamic Revolution and the head of state, Ayatollah Ali Khamenei. Naturally he was in favor of the nuclear agreement since that decision was one element of the Iranian leadership’s strategy. Ayatollah Khamenei thinks that it makes sense for the Islamic Republic to change its tactics, given the changing international landscape, but that the fundamental principles of the 1979 revolution must remain sacrosanct. This is the stance adopted by Iran’s leaders. Tehran will not back down a single inch in its Middle East policy under pressure from Washington. The military and political cooperation with Moscow in support of Syrian President Bashar al-Assad is confirmation of this.

Washington continues to impose sanctions against Iran for reasons no longer related to nuclear research, specifically because of Tehran’s pursuit of its missile program. This could hamper the implementation of the Joint Comprehensive Plan of Action (JCPOA), which allows the UN to resurrect all the «nuclear» sanctions should Iran violate the agreement. Iran, in turn, has proclaimed its grievances against the US and UN pertaining to the partial lifting of sanctions. Ayatollah Ali Khamenei has threatened to set a match to the nuclear agreement if the next US president violates it. The US-Iranian relationship remains tense.

Ayatollah Khamenei emphasizes that American scheming has gradually become more brazen, but that the US administration is still seeking to undermine Iran’s political system.

However, US strategy toward Iran is changing – today Washington relies on «soft power» that could potentially drive a wedge into Iranian society. But that is something the US has not managed to do, despite its rhetoric about human-rights violations coupled with its support for a small number of Iranian dissidents. For the US to gain the upper hand over the Islamic Republic’s internal operations would require massive public discontent. American intelligence services believe that the fastest way to do that is to take advantage of the country’s economic difficulties as well as the social stratification of the population. And due to President Rouhani’s liberal attitude toward those he has placed in leadership positions, those calculations have begun to bear fruit.

That is what the leader of the Islamic Republic of Iran said at a meeting with the president and members of the government. Ayatollah Khamenei had harsh words for anyone «greedily using a high-level government title to obtain wealth or specific advantages». Officials guilty of this do not belong in Iran’s government agencies. Iran’s leader has also spoken out against the local oligarchs. Their «dizzying incomes ... are an affront to the values of Iranian society». Iran has few oligarchs, but Ayatollah Khamenei has stressed that «even this small handful of people has a very negative impact, and it is absolutely necessary to take action against them».

The government had no choice but to respond. President Rouhani decided to dismiss the heads of Iran’s four largest state-owned banks (Refah, Mehr, Iran Saderat, and Mellat). Those men were receiving salaries ten times higher than that of the average Iranian. What’s more, they were also regularly given large bonuses, no-interest loans, and tax breaks. The head of Central Insurance of Iran – a state-owned company where many directors were enjoying paychecks of as much as $28,000 per month – had already been let go.

These steps had two meanings. On one hand, they helped enhance Rouhani’s reputation as an uncompromising advocate of the battle against corruption. And on the other, they prompted demands that the government take similar measures against many other civil servants. It turns out that corruption in Iran is far more widespread, and success in getting a preliminary contract with a foreign company once sanctions are lifted is often contingent upon an uptick in palm-greasing.

In other words, there have been plans to entice Iranian civil servants into illegal business relationships with representatives of foreign firms. The IRGC intelligence services are already busy investigating the possibility that civil servants may have been accepting bribes and have been tasked with looking into the most high-profile cases. Ayatollah Khamenei has stated that the stability of the Islamic system depends on resolving the problem of corruption.

In recent weeks Iran’s media have been flooded with negative information about Rouhani and his administration. The imams who lead the traditional Friday prayers, which are held across the nation, have also begun to criticize the president. The main gripe against the current chief executive is that «the nuclear agreement hasn’t done Iran any good». And it’s true, the public has seen no significant benefits from the revoked sanctions and canceled oil embargo. There was initially a surge of euphoria over the agreements with the US regarding Iran’s nuclear program, but that has passed, and the expectations of rapid change for the better have not been rewarded.

Dissatisfaction with the country’s stagnant economy is growing. And so, speaking at a joint meeting between Iran’s Cabinet of Ministers and the governors of the country’s provinces, President Rouhani asked that the public’s most urgent social and economic problems be immediately addressed. «One of the primary responsibilities of the governors, as well as the government agencies», he declared«is to encourage optimism and harmony in society... Our enemies are trying to sow despair in our society, and we must always be on the lookout to respond to their actions».

Tags: Iran  Khamenei  Rouhani