No. 150

FOR SOME SUPER-CORRUPTION – TRY IRAN

STONE the crows! You might have missed it, what with all the amusement at ICAC, but everything is really awful in Iran. It’s an excellent example of what occurs when political insiders use the state as their own source of fun and profit, (the Islamic Republic, not NSW that is).

There are all sorts of examples of the mess Iran is in. The economy contracted last year while inflation reached 25 per cent.[i] The official unemployment rate for the entire workforce was 12 per cent overall, close to 30 per cent for under 25s – but these numbers are seen as suspicious. The real rates are assumed to be twice these.[ii] While the regime blames Western sanctions imposed against its nuclear program, the root cause of the crisis is the way the economy is run for and by insiders intent on enriching themselves.

As the CIA puts it:

Iran’s economy is marked by statist policies and an inefficient state sector, which create major distortions throughout the system, and reliance on oil, which provides the majority of government revenues. Price controls, subsidies, and other rigidities weigh down the economy, undermining the potential for private-sector-led growth. Private sector activity is typically limited to small-scale workshops, farming, and services. Significant informal market activity flourishes and corruption is widespread.[iii]

Ah yes, oil. Sure the country is awash with the stuff, but its energy system is so inefficient it is only expected to reach gasoline self-sufficiency in 2015.[iv]

As for corruption, surely this is just evil American propaganda run by us capitalist roader crows? Umm, not really. Consider the opportunities for energetic officials in retail regulation:

We have lookouts to tell us when amaken (commercial inspectors) are coming, ’says one shopkeeper. ‘If they find un-Islamic products they put a seal on the door and close us down.[v]

As a measure of life for ordinary people, the fertility rate is hard to beat and in Iran women have given up on the idea of a future for families. On present trends the population will start to decline in 20 years and halve by 50 per cent by century’s end.[vi]

Corruption is less endemic than institutionalised, which is bad for all of the Iranian people, except those with their snouts at the trough. Like the leaders of the Revolutionary Guard, a private army with 125,000 troops which officially reports to the supreme leader Ayatollah Ali Khamenei but effectively answers to no one. The Guard also runs a one million strong paramilitary force that ostensibly maintains morals but basically ensures people do what they are told.[vii]

But, as well as power, the Guard commanders are (what a surprise) in it for the money, using their privileged position to take control of profitable parts of the economy:

It runs laser eye-surgery clinics, manufactures cars, builds roads and bridges, develops gas and oil fields and controls black-market smuggling. Members of the Guards and their families receive privileged status at every level, which benefits them in university admissions and in the distribution of subsidized commodities, experts say.[viii]

An efficient way to manage an economy it is not, but the Guard and their opponents inside the clerical-political power system are now fighting publicly over the diadems of decline, and jockeying for position in preparation for President Ahmadinejad’s June departure. He is banned by the constitution from running for a third term.[ix] A couple of weeks ago the president arrested the Labour minister, widely seen as a tilt against the speaker of parliament, who is an ally of Supreme Leader Ayatollah Ali Khamenei.[x] This was followed with the arrest of prosecutor Saeed Mortazvi, who organised the crackdown on protests over the president’s dodgy re-election in 2009.[xi]

This is an appalling way to run a country, at least for the 70 million or so people who are not in on the joke. It’s much the same as China, where the Party rather than the official state bureaucracy (in so far as the two are different) runs the country and the People’s Liberation Army is obedient to the CCP officials who command it.[xii]

Squabbling over power, generally as a proxy for money is what passes for politics anywhere the state is suborned by extra parliamentary power brokers and politicians’ first allegiances aren’t to the electorate.

The gulf between Australia’s political culture and Iran’s is light years wide and, the ACTU aside, there is no nation-wide alternative political power structure to that of the three main political parties.

And a good thing too. The politics of faction is always about patriarchy, pelf and personality, about enriching insiders at the public’s expense. As The Times reported on Iran in October:

A subsidised exchange rate, imposed by the government to protect imports of food and medicine from the collapse of its currency, has been exploited by companies linked to the Revolutionary Guard to bankroll the purchase of sports cars and other luxury items. At the same time, the powerful militia is steadily excluding the health ministry from access to cheap dollars to buy medicines and equipment. “This is all being controlled by the Revolutionary Guard. They have prioritised foods like meat, rice, flour and sugar, the things that might actually provoke riots if they run out,” said one Iranian source. “They have calculated that medicine is not a priority because the sick don’t riot.”[xiii]

Can’t happen here? Course it can’t, that is if you believe that everybody in Australian public life is as honourable as the Iranians are awful.

But if you don’t, there is always ICAC and its equivalents plus Senate estimates and journalists asking questions that powerful people don’t want to answer.

Long may they keep asking.

 

ENDNOTES


[i] Farnaz Fassihi and Jay Solomon, In Iran’s factories and shops, tighter sanctions exact toll, Wall Street Journal, January 3

[ii] Najmeh Bozorgmehr, “Iran warmed over mounting unemployment,” Financial Times, January 4 2012

[iii] CIA, The World Factbook: Iran, February 5 @ www.cia.gov/library/publications/the-world-factbook/geos/ir.html recovered on February 17

[iv] US Energy Administration, “Iran energy data,” November 2011 @ www.eia.gov/cabs/iran/Full.html recovered on February 17

[v] “Love struck in Iran,” The Economist, February 14

[vi] David Ignatius, “Muslim world faces fertility crisis,” The Australian, February 12

[vii] Greg Bruno and Jayshree Bajoria, “Iran’s Revolutionary Guards,” Council on Foreign Relations, October 21 2011 @

[viii] “Islamic Revolutionary Guards Corps,” New York Times, February 16

[ix] The Economist, November 13 2012

[x] Farnaz Fassihi, “Top Iranians trade barbs in rare public feud,” Wall Street Journal, February 4 www.cfr.org/iran/irans-revolutionary-guards/p14324 recovered on February 17

[xi] “Pro-Ahmadinejad former Iranian prosecutor arrested,” Reuters February 5

[xii] Rowan Callick, Party Time: who runs China and how, (Collingwood, 2013) 62

[xiii] “Medicines dry up in Iran but Porsches still roll in, The Australian, October 20 2012

'2012