Without Foreign Exchange Critical Shortages will come in Three Months

A member of Iran’s Chamber of Commerce has warned that if foreign exchange is not provided to the business community, there will “shortages in products including food.”

Assadollah Asqar Owladi told ILNA labor news agency, “Unfortunately because of recent events and the differences that have come up between the Central Bank, the Ministry of Industries and the Customs Administration, the country will face a shortage of goods in the month of Shahrivar and Mehr” (2^nd half of August to 2^nd half of October).

He added that there was currently perishable food in the Customs which is being kept under high costs and added that there were some 10,000 containers containing medicine and food in the southern ports of Iran and some 5,000 containers in Jebel-Ali port in Dubai waiting for their reimbursements to be resolved so they could release the containers.

“Why does the current administration disregard the situation people are facing? We shall be facing food shortages in the coming months. It looks as if the eleventh administration will have to be dealing with this issue and resolving it,” he said.

Since the last few months of Mahmoud Ahmadinejad’s administration, differences over foreign exchange for imported goods have erupted between the Ministry of Industries, the Central Bank and the Customs Administration which has resulted in that much food products and medicine has been held up in the customs at airports and ports because of which they are not being released.

Asqar Owladi is also the president of the Iran-China Chamber of Commerce and has recently turned into one of Iran’s billionaires. He pointed some of his criticism at the Central Bank of Iran. “Contrary to its prior commitments, the CBI now has a failing grade in its report card.”

The CBI recently had announced that imported goods are charged 2,477 Toman for each Dollar of imported goods while the Ministry of Industries insists on accepting the rate of 1,226 per Dollar.

Although the CBI has had this difference with the Ministry of Industries, the issue has turned public only since spring, after the bank ended its 1,226 Toman to Dollar parity rate and replaced with the much higher rate of 2,477 Toman.

In addition, as explained by Mohammad-Reza Naderi, the deputy Customs Administrator, the CBI also announced through a separate circular to the country’s banks did not have the authority to issue release documents for any goods until the new rates had been obtained from importers and creditors.

But this is not the first time that Asqar Owladi is publicly voicing his criticism over the shortage of goods. He and other businessmen are said to have cashed large sums of money after they created the Iran-China Chamber of Commerce about a decade ago.

Since the time when international sanctions against Iran intensified because of its nuclear program, China has emerged as a supporter of the Iranian regime and one of the few trading partners of the Islamic republic of Iran. In the same lights, in the last few months reports have been published that indicate deaths caused by the shortage of medicine in the country.

Business specialists have said that the unregulated import of Chinese goods in recent years has caused a fall in domestic production and a rise in unemployment.

Speaking to Parna news agency about 19 months ago Owladi had said, “Everyone had estimated inflation to remain around 14 percent. But now, it stands around 27 percent with fixed foreign exchange rates or about 40 percent if one takes into account the inflationary effect of the rate of foreign exchange. With this inflation rate and the fact that the CBI is not publishing any trade statistics, it is not advisable to implement the 2^nd phase of the state subsidy program.”

Asqar Owladi is also the brother of a senior member of the country’s hardline conservative group known as the Motalefe Islami (Islamic Coalition Group) and had predicted that with the Toman-Dollar exchange rate running at 1,600 Toman, there would be complete unavailability of certain products within six months, forcing businessmen to resort to illegal contraband trade. His warnings received difference responses, but the Revolutionary Guards wrote in their official newspaper Sobh Sadeg that Owladi’s comments were “commercial” in nature and advised him to use his wealth, which it said had made him among the tenth wealthiest people in the country, to remove the issues facing the country.

Another member of Iran’s Chamber of Commerce, Majid-Reza Hariri had also issued a similar warning recently and complained that the CBI had stopped provided any foreign exchange to private or government traders since about 20 days earlier. 

The differences between the Central Bank, the Ministry of Industries and the Customs Administration and with the business community involved in importing goods that are now aired in public are taking place at a time when people are struggling to obtain their basic daily needs as the inflation rate in the country is reported by some officials to have hit the 61 percent mark.