Iran Affairs

Iran: economics and the Tyranny of Numbers

I wanted to recommend the blog by Djavad Salehi-Isfahani at Brookings Institute called the Tyranny of Numbers which set the record straight on several economic statistics that are often thrown about in the media without concern for their accuracy, especially Iran’s employment, education, poverty, and income distribution. These figures are usually used to portray Iran on the verge of economic collapse, largely due to wishful thinking and also as psychological warfare, but these figures don't stand up to scrutiny.

For example, on the oft-quoted claim that inflation rates in Iran are supposedly twice the official figures, Salehi-Isfahani writes:

Every time a reporter mentions Iran’s inflation or unemployment data, they feel obliged to assert, sometimes quoting unnamed experts, that actual numbers are probably twice the official rates.  But most people who work with numbers know well that officials can manipulate one year’s inflation rate or two, but if the rates are misreported for a number of years, the mere effect of compounding will soon reveal their hand. If you take an inflation rate twice the reported rate for the last 15 years, the price level in 2008 would be about 130 times higher than it was in 1993, nearly ten times higher than the official rates indicate. It is easy to show that under reporting inflation by 50% each year for 15 years produces some very absurd results.

I've mentioned before how Djavad Salehi-Isfahani set the record straight on Iran's poverty rates, and how Kelly Campbell of the U.S. Institute of Peace exploded the myth that Iran is wallowing in an economic crisis:

The belief that Iran suffers from dire economic conditions is one of four myths circulating about Iran's macroeconomic performance. Iran's economy has actually performed well in aggregate terms, with a moderate rate of growth in the last ten to fifteen years, including healthy GDP and per capita growth in investment. In the last three years, Iran's actual growth rate has averaged 5.8 percent. 

Nor do economic indicators support assertions by some observers that inflation is much higher than the rate stated by the Iranian government. In the last fifteen years, the consumer price index (CPI) has increased by a factor of forty-two; if the inflation rate were actually twice the reported rate, the CPI would have increased by a factor of 950. Prices have increased by a factor of five in the last ten years, not twenty, as some claim. While this rate of inflation is cause for concern, it is in line with the depreciation of the exchange rate.

The third myth is that Iran suffers from widespread poverty and rising inequality. The poverty rate actually declined throughout the 1990s and continues to fall, and is low by international standards—especially when compared to that of other developing countries. Government public service and social assistance programs have helped to reduce poverty, particularly in rural areas. In addition, economic inequality throughout Iran has remained fairly stable and does not appear to be increasing.

The final myth is that unemployment in Iran is twice the official rate. Although the unemployment rate is high, it has declined since 2000 and reached 11.2 percent in 2004.2 While official statistics match World Bank estimates, the current government has failed to generate sufficient job growth to meet the needs of Iran's young, educated population. For these youth, unemployment often lasts two to three years, which has resulted in more young Iranians living with their parents well into their twenties...

The ease with which certain false economic statistic are repeated and take on a life of their own despite their falsity was made clear to me several years ago when I inquired on Gulf2000 about the source of the oft-repeated (in those days) claim that Iran had the highest brain-drain rates in the world. This was falsely attributed to the IMF by an RFE/RL Radio Farda report. It turned out that there was no such IMF report as the AIC later confirmed:

Report on IMF Study Regarding Iranian "Brain Drain" Unsubstantiated

Perhaps in response to some queries by AIC last week, RFE/RL today published a clarification of their story in the March 15th edition of the Iran Report. The story in question referred to an alleged recent IMF report determining that Iran suffers from the “world’s highest rate of brain drain.” We believe it is important for readers to be aware that this IMF report does not appear to exist.  2004-04-12

The only IMF report that did exist was published in 1998, and had relied on figures from 1990 -- and still did not support the spin put on it by RFE/RL.

Saberi imprisoned in Iran - my thoughts

Two people I know somewhat distantly are currently imprisoned in Iran. One is Saberi, the other Derakhshan. I had met both of them briefly. I wasn't necessarily a big fan of all of Saberi's reports. For example, I disagreed with her view in one article in which she attributed the popularity of the nuclear program to regime propaganda rather than genuine nationalistic feelings amongst the people. However I never thought either of them were "spies" and still am not convinced. Most certainly, I don't want to see either of them...or anyone else...imprisoned. Not only is that just plain wrong, it does nothing to help Iran or Iranians either.

But in any case my point is more about how Saberi's case has become a tool in the hands of the Iran-bashers. I wish to remind everyone about how human rights is subject to manipulation by people who have an agenda:

Everyone knows Saberi…but no one knows about Ogulsapar Muradova, the Radio Free Eurpe/Radio Liberty correspondent who was killed in prison in Turkmenistan. Why do you suppose that is?

Compare the coverage provided by the NY Times or other media outlets to Saberi versus Muradova. Note the significant difference. A search of the NY Times brings up just three "hits" for Ogulsapar Muradova, and more than 3000 hits for Roxanna Saberi.

Could it be, because Turkmenistan is a US-allied tyranny? So we’re willing to give them a pass when they murder reporters?

Gee -- ya think?

Goldschmidt is wrong about the IAEA

Pierre Goldschmidt, formerly a high official of the IAEA, has criticized the organization for supposedly acting weak -- specifically, by not using the power of ordering "special inspections" in Iran and Syria.

Goldschmidt said the IAEA should reassert a right to impose mandatory "special inspections" in countries refusing to grant broad access to inspectors to resolve intelligence reports of stealthy work to weaponize nuclear materials.

What Goldschmidt apparently failed to mention is that had the US presented any actual evidence to the IAEA Board of Governors that Iran or Syria were engaged in clandestine nuclear activities at a particular site, then the IAEA would have had the legal right to demand such special inspections. But that didn't happen -- not because of Syrian or Iranian intransigence as the article claims, but because the US has never bothered to actually present the evidence to the IAEA Board in the first place.

In the case of Syria, the Israelis bombed the alleged "nuclear site" without giving the IAEA any information on the site, thus preventing the IAEA from ordering a special inspection and finding the actual evidence. ELBaradei specifically criticized Israel and the US for this.

The failures of cooperation are from the US not from Syria or Iran. In the case of Iran, the US is even now refusing to provide the IAEA with full access to the so-called "Laptop of Death" that the US says is proof positive of Iranian nuclear weapons research. Iran opened up non-nuclear sites such as Parchin to international inspections after David Albright at ISIS made a hue and cry about the site based on nothing more than innuendo and speculation -- and nothing was found there.  IAEA officials complained publicly that none of the "secret" information provided by the US on Iran had panned out.

In fact, this whole criticism by Goldschmidt is way off the mark for another simple reason: The US accuses Iran not of having an existing secret nuclear weapons program, but instead of having the "intent to acquire the capability" to make the bomb at some indefinite point in the future -- which is something no amount of inspections can prove or disprove anyway since it is three degrees removed from an actual, existing, observable program. 

So why this criticism of the IAEA? Because the IAEA has resisted going along with the US claims about Iraq, and now Iran - that's why.

Torture used to connect Iraq to 9-11

Frank Rich in today's New York Times says it best:

Five years after the Abu Ghraib revelations, we must acknowledge that our government methodically authorized torture and lied about it. But we also must contemplate the possibility that it did so not just out of a sincere, if criminally misguided, desire to “protect” us but also to promote an unnecessary and catastrophic war. Instead of saving us from “another 9/11,” torture was a tool in the campaign to falsify and exploit 9/11 so that fearful Americans would be bamboozled into a mission that had nothing to do with Al Qaeda. The lying about Iraq remains the original sin from which flows much of the Bush White House’s illegality.

...though I doubt anything will come of this.

Tehran's health patrol

Did anyone else see this TIME article about the state of healthcare in Tehran? Complete with an interesting photo essay.

Women play a critical role in the health care of the citizens of Iran's largest city, where population has rocketed to 8 million people in the past 50 years...

For a city its size, Tehran offers exemplary primary health care and sanitation. The vaccination rate stands at 100%, there is close to universal access to clean water, and 80% of pregnant women are examined three times during their pregnancy.

"Harsh interrogation techniques" = TORTURE

Funny how the media in the US insist on using the euphemism of "harsh interrogation techniques" when referring to torture.

Replacing Iraq's money was a rip off

Sometimes, in reading court cases, you run across things that make you shake your head in disbelief. Normally. When you read some of the cases that have arisen out of IRaq war debacle, you head practically explodes.

So just get this: according an entertaining decision filed by US Court of Appeals for the Fourth District in the case of  The USA v. Custer Battles,  the defendant contractors had been summoned to a meeting to defend their work for the USA in performing "Dinar Exchange Contracts" to replace IRaq's currency. Iraqi money at the time had Saddam Hussein's picture on it and the U. S. administration had decided that it needed to be replaced:

"The exchange was a massive undertaking. The new dinars were shipped into Iraq on 28 fully-loaded Boeing 747 cargo planes, and the exchange required the services of multiple contractors, ranging from providers of currency-counting machines to transportation providers."

But then, there were problems and so the contractors were invited to a meeting:

Problems developed with the quality of Custer Battles’ performance, leading to a meeting on October 18, 2003, between representatives of the Coalition Authority, the U.S. Military, and Custer Battles’ co-owners Michael Battles and Scott Custer.

With me so far? Well, it turns out that Custler Battles, the contractor charged with changing the Iraqi currency, had been padding its costs and presenting fraudulent invoices to the government. How do we know this, you may wonder? Well, because...

 "After this meeting ended, Battles accidentally left behind an astonishing spreadsheet, which contained rows listing items invoiced under the Dinar Exchange Contract and separate columns listing the 'Actual Cost' for the items and the amount 'Invoiced' for the items."

As Homer Simpson would say, "Doh!"

And how bad was this fraud?

This document showed, for example, that for the Baghdad hub of the dinar exchange program, Custer Battles provided two flatbed trucks, for which it paid $18,000 but invoiced the Coalition Authority $80,000. To provide "Life Support, basic level" at the Bagdad hub, it provided generators that cost $74,000 but for which it invoiced the Coalition Authority $400,000. And for the Basra hub, it spent $4,000 to provide laundry facilities but invoiced the Coalition Authority for $12,000. Thus under the Dinar Exchange Contract, Custer Battles improperly received the difference between the actual costs and the inflated invoiced amounts and also 25% of the inflated invoiced amounts.
 

And it just gets more entertaining. As it turns out, the money that Custer Battles was paid with was not US money -- no, it consisted of "seized" money that the US had gotten from Iraq. So Custer Battles apparently had argued that it wasn't US money they stole, then they shouldn't be held accountable for the money under the False Claims Act. With a straight face!

Now, just imaging all the instances of fraud by defense contractors that were not so easily detected.

Tirman: A New Approach to Iran

Prof. John Tirman of the MIT Center for International Studies has issued a paper calling for "A New Approach to Iran", and which espouses a "Need for Transformative Policy".

I haven't had a chance to read the full report but skipped quickly down to section entitled "NUclear Weapons" -- which was a disappointing subtitle based on what it implies -- but the text was far more balanced. Here's a taste:

While it is popular to depict the E3 and U.S. engagement as serious diplomacy wrongly rebuffed, it is far from certain that this is accurate. American statements and bargaining positions have not had the ring of a serious undertaking, instead offering demands and preconditions that assume an outcome (the suspension of enrichment), and couched in relentlessly hostile language that continually imply military strikes are actively considered. As recently as March 3, 2009, Secretary of State Hillary Clinton stated in a press conference with the Israeli foreign minister that “We intend to do all that we can to deter and to prevent Iran from obtaining nuclear weapons. That is our stated policy. That is the goal of any tactic that we employ.” The statement, one of several on the same trip, reflects little if anything different from the Bush administration. Alarms are rising about the nuclear material Iran has accumulated through enrichment—from none other than the chairman of the joint chiefs of staff—with misleading statements about Iran having enough to build a bomb: it must purify the enriched uranium, fabricate it into a deliverable weapon, and fashion a delivery vehicle, all done reliably—a daunting set of tasks that place it years away from weaponizing, if indeed that is the path they’re on. The IAEA reported in March that no uranium had been diverted, and the director of national intelligence corrected that impression a few days later, telling the Senate that "the overall situation – and the intelligence community agrees on this – [is] that Iran has not decided to press forward . . . to have a nuclear weapon.”

More broadly, the United States remains committed to a politically weak course by insisting on a tight interpretation of the Nuclear Nonproliferation Treaty (NPT) for some nuclear have-nots, but a loose reading for nuclear haves. Article VI of the NPT commits the nuclear states to disarmament, which they neglect. Worse, of course, is the absence of sustained rebuke for the newer nuclear powers, Israel, Pakistan, and India, which is the sort of hypocrisy that is ignored in American politics but is taken seriously elsewhere. Ridding U.S. policy of this inconsistency would reassure the global community that we’re willing to be held to the same standards as others, a key tenet of successful foreign relations.

This is essentially what he has to say about Israel:

Needless to say, a just solution to the Israeli-Palestinian problem would do more than anything else to remove Iran from the Levant. That decision rests with Israel...

Iran could use some of its influence to push Hamas in serious negotiations—if Hamas were at the table. But the leader on this matter is clearly Israel, with a strong role for American pressure. Blaming Iran for Hamas’ and Hizbollah’s aggressive activities is a red herring: it is at most a secondary player.

 And that's why this paper won't be taken seriously. Tirman apparently knows it himself, when he says:

There is a troubling tendency in the last decade or more to act as though Israeli policy must be matched in Washington. Apparently, the Israeli government believes it can set the contours of U.S.-Iran diplomacy, and many in Washington believe that American policy in the region requires very close consultation with (or even approval by) Israel.

Bingo. It is about time American political pundits accepted the fact that the tail wags the dog, and so the US is institutionally incapable of really reaching out to Iran, Obama or no Obama.

Prosecuting Bush administration for war crimes and torture? Don't bet on it.

Scott Hornton wrote in the last issue of Harpers Magazine about how the same Spanish judge who pursued Pinoche was considering filing criminal charges against the Bush gang for committing torture. Some friends were very excited about the possibility that there may finally be some justice for the likes of Alberto Gonzales, Feith and Yoo.

But I knew better and have previously explained how Rumsfeld has evaded war crimes charges, and I have since tried it explain to my friends how law tolerates essentially two standards of justice -- one for the perpetuators of atrocities in in places like Rwanda and Chile, and another when the perpetuators of atrocities are American or British.

And just as I expected, today there's news that the Spanish will drop the torture investigation.

I wish we lived in a world where the law applies equally to everyone, but fact is, we don't. Grow up. Things like "human rights" and "war crimes" and "international justice" are political. Always have been.

Sonni Efron on UAE Nuclear Program and Iran

Sonni Efron, and opinion writer for the LA Times, has an amusingly misleading piece published recently in which she presses for the approval for the sale of US nuclear reactors to the United Arab Emirates by suggesting that the deal could become some sort of model for Iran's (and the rest of the world's) nuclear program since the UAE has also agreed to import all of its nuclear fuel supplies from the United States, and further insists that Iran's refusal of a similar deal would be proof that Iran wants nukes:

To eliminate the risk of nuclear diversion, Abu Dhabi has decided to "forgo the fuel cycle" -- it will buy its reactor fuel from abroad and return the spent fuel for reprocessing, instead of enriching its own. During European-led negotiations with Iran, Russia offered Iran a similar deal. Tehran refused, insisting on its own enrichment technology. That has only reinforced suspicions of its motives.

This is of course total bullshit.

For one thing, the comparison between Iran and UAE is false. The tiny oil- and gas-rich state of the UAE has less of a population than a suburb of Tehran and is run by a collection of Arab royal kleptocrats who have been propped up by the US for the last 60 or so years. It doesn't face the same strategic nor economic and population pressures that Iran has to face and which requires an independent source of fuel. Also, the UAE doesn't have the necessary resources to enrich its own fuel even if it wanted to do so. Also, whatever the UAE is doing is the UAE's business and is not done under threat of attacks and bombardments. Etc etc. Simply put, Iran is not the UAE.

But what's really galling is how Sonni equates enrichment programs with nuclear bombmaking. Tell me, Sonni, are Argentina and Brazil, who have recently developed the same nuclear enrichment technology as Iran's with less IAEA inspections, also "suspicious"?

You see Sonni, the world already has a way of eliminating the risk of nuclear diversion -- and it does NOT consist of allowing your country to become solely reliant on Russia or the US for nuclear fuel. Rather, it consists of the IAEA and the NPT, and more than 6 years of inspections by the IAEA have proven time and again that Iran is in full compliance with the NPT.

Illegal UN Security Council Resolution 1696 on Iran's nuclear program

Jeremy Hammond at Foreign Policy Journal has written a great, concise summary of the many reasons why the UN Security Council Resolution 1696 of July 2006 against Iran is itself illegal:

[T]he U.N. resolutions themselves which are illegal, a violation of the very Charter under which they were passed and therefore null and void.

[S]hort of evidence that Iran has actively engaged in research and development of a nuclear weapons program, neither the IAEA nor the U.N. has any legal basis to demand that Iran halt its activities. The NPT unambiguously guarantees the “inalienable right” of member states to develop a peaceful nuclear program, which includes enrichment of uranium for nuclear fuel...

So the authority of U.N. resolution 1696 demanding that Iran halt enrichment activities is based upon the authority of an IAEA resolution requesting that Iran do so while also expressly recognizing Iran’s “inalienable right” to continue said activities. This is the “context” of the relevant clause in 1696 forming the basis for the argument that Iran’s enrichment activities are illegal. Since in passing 1696 the U.N. took an IAEA request that Iran voluntarily halt said activities and falsely gave it the appearance of a legal obligation, this operative clause is therefore moot.