Wednesday, August 03, 2016

What Islamic Revolution in Iran?

President Hassan Rouhani of Iran was elected in 2013 promising to end corruption in government. Corruption has always been endemic in Iran, with billions of dollars in oil revenue being distributed by the government. Under the two four-year terms of  Ahmadinejad, corruption grew to extraordinary levels. The banking system was left with huge debts because some with the right connections were granted enormous loans that often were not repaid, even as most of Iran’s young adults and private businesses were shut out of credit markets.

In recent weeks, the Iranian news media have been publishing payment slips showing many top managers of state-run companies earning what for Iran are astronomical bonuses and salaries, often hundreds of thousands of dollars a month. Iran’s supreme leader, Ayatollah Ali Khamenei, has harshly criticized the inflated salaries, which far exceed the legal cap of $2,353 a month for government employees. Official salaries have always been capped — in theory, at least — in keeping with the official policy of frugality and soberness that forms the Islamic Republic’s ideological base. But Hamidreza Taraghi, a political analyst, acknowledged that those caps were often unrealistically low, and that, while unpopular, higher salaries were needed to attract talented managers. “Lets face it,” he said. “Everywhere in the world, managers make a lot of money.” 

Mizan, the news agency belonging to Iran’s judiciary, published the payment slips of eight managers of the state-owned Central Insurance Company, who had each received yearly bonuses of over $50,000. The news agency added that the financial rewards had to be judged against a backdrop of seven million laborers who earn just $200 a month.

Ensafnews, published the paycheck stubs of the top managers of the state-owned Tejarat Bank. Its chief executive, appointed after Rouhani was elected in 2013, made $208,115 over 21 months, the documents showed. He had also been given an interest-free loan of $289,000.

The vice president, Mr. Jahangiri, who is leading the official investigation into the salary scandal, was awarded a bonus of around $200,000 from a state-run cement factory where he is a member of the board, Kayhan newspaper, reported.

Rouhani’s  brother, Fereydoun, has been accused by Raja News of using his influence to place a friend, Ali Sedighi, in charge of the Refah bank. The head of Iran’s General Inspection Office, Naser Seraj, complained that Sedighi had been appointed after “insisting and lobbying by a government official.”

Managers in health care have topped the charts with monthly wages over $200,000. Pro-government figures have accused some generals in the Islamic Revolutionary Guards Corps and the Office of the Supreme Leader of receiving similar wages. A spokesman for the Revolutionary Guards denied the charges but refused to divulge the salaries of military commanders, saying they were “state secrets.”

“What is emerging is a mechanism similar to that in the former Soviet Union,” said Saeed Laylaz, an economist close to the government. “The elites are rewarded with money and privileges in return for their loyalties.”

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