Iran : the Bazaar in a mess
The American bank sanctions made Iranian economy go wrong because it’s based on foreign investments as well as import-export activities. Without this true fuel that made it go for around 30 years, nothing goes well : debts are piling up, banks are going bankrupt. As it expects for the worse, the regime publicized last Monday some balance that appeared closer to reality in order to prepare its domestic partners. Such announcement has spread panic and caused a chain reaction whose effects were unexpected. Iran is on the move.
What happens when you are a rich businessman in a country that faces sanctions and when suddenly the State claims that your bank as well as every other bank in the country might collapse ?
This is simple. You withdraw your money to convert it then into gold or into some reliable currency such as dollar or euro. Well, since last Wednesday, it’s strictly forbidden in Iran to withdraw more than 15 millions toman in cash -equivalent to USD 15,000- per day from any bank account ! The regime even thought of the clever ones who may try to get around the system with the creation of several bank accounts or fictitious jobs by stating that any swift transfer would transit via common bank software that would be implemented by the Central Bank. The offender will be accused of money laundering and consequently all his assets will be seized but he will be constrained as well to pay a fine that would be equivalent to ¼ of his illicit income -a fine that would be deducted from the sale of his property. He will be also subjected to an international arrest warrant. In other words, we are not allowed to leave the sinking ship and if we do so, we will be forced to return to the foil so to be peeled there.
Such double bad news made our Bazaari and the regime’s other rich people want to fly the coop ; everybody ran to the stock exchange in which we assisted in a boom of the offer and then we noticed a sales drop and an index fall, a piece of information that Tehran kept confidential.
Such prohibition is undoubtedly the news of the week. However its true interest is not economic but political because the Bazaar played a key-role in the victory of the Islamic Revolution by giving salaries to anti-Shah demonstrators. The Bazaar appeared to be the national decisive factor. Nowadays it is still able to reproduce the same exploit because Iranian economy, if we compare to 1979’s situation, turned even more subordinate to it. Besides, the Bazaar displayed some sedition will on the last October when the mullahs refused an offer of reconciliation with the United States, which has exposed Iran and its businessmen to new sanctions. At that time, we saw the Bazaar in fire and particularly in the section that was in the past much involved in the Islamic Revolution, fires in which firemen intervened quite late and let the place blaze up on a pretext of a lack of accessibility ! This was untrue because they made such statement as they were striking the pose close to their engines in the corridors they introduced as inaccessible !
Consequently, we can tell that the Wednesday 13 January was a black day for the Bazaar but also for the regime which prefers to have the Bazaari on its side. But there we are ! This week, some second explosive news raised our interest.
The day after such prohibition, on the Thursday 14 January, last day of the Iranian week right before Bazaari gather together to the Friday Prayer in which it’s suitable to appear, the regime announced the unexpected adoption without any debate of a law that allows the settlement of foreign banks in Iran, some banks with “Indian-Arabic-European capital” and in which Bazaari will be allowed of course to deposit their pricy pile that would be thus sheltered from any collapse ! To sum it up, the regime prevents them from dropping it but it can see to guarantee the security of their assets. Having said that, foreign banks apply the real exchange rate and consequently our rich people will see their wealth divided by 7, the preferential exchange rate that was decided by the regime in order to preserve the Bazaar’s support and that is 7 times less important than the real rate.
Apart from the inconvenience this wealth division has generated, this kind of bank settlement remains impossible as long as American financial sanctions will be in force, i.e. as long as the mullahs will refuse against the advice of their Bazaari friends Obama’s held hand. The regime made a conciliatory promise and it cannot fulfil it. The fact that it has displayed such conciliatory act is important because 4 months ago, the same regime contented itself with a chain of punitive fires. This is quite tremendous. It would be then affrayed of the Bazaar’s revolutionary abilities.
This is a revolution in itself because for the past 180 years, the clergy and the Bazaar have always been together ! The clergy even got prosperous thanks to this unity. Such breaking-off means some upheaval for both parts but also for Iranian society.
When Washington started to implement its sanctions to make the mullahs give in and snatch from them some entente they think vital for the maintaining of its world hegemony, it could foresee this kind of result. At present, it delays new sanctions for fear of making the mullahs collapse and it needs them to agitate the Muslim Chinese regions. Otherwise, it has set off a mechanism that is beyond itself.