How the US Benefits from Foreign Aid to IranMany times, governments overshadow the amount of compensation they receive from humanitarian acts. Often, in some way or another, governments will be compensated for their actions, whether through monetary funds or through access to resources. Along with hundreds of other countries and communities, the U.S. benefits from foreign aid to Iran in many ways.

In 2016, the American government provided $3,350,327 in aid to the Iranian people. This money is portioned out into multiple areas, but the majority of it has been paid to Iran by the U.S. Department of Energy for the purpose of removing and destroying nuclear-grade weapons from Iranian civilians and other civilians who may have access. Although the U.S. has had uncertain relations with Iran in the past, the amount of aid the government has given them is fairly average in relation to how much aid they give to other countries in the region.

There are other ways that the U.S. benefits from foreign aid to Iran as well. According to the U.S. Census Bureau, the U.S. received nearly $54.8 million in imports from Iran last year. Iran’s major export is in crude petroleum, along with ethylene polymers and acyclic alcohols. However, what is surprising is that the United States does not even rank as one of Iran’s top exporting partners. Iran relies on the U.S. funds for certain processes such as energy regulation, but the U.S. does not receive quite so much financial gain in return.

So, what does the United States receive?  To some extent, the U.S. government receives diplomatic relations from the money it spends. For supporting Iran, and for interacting in an international trade society, the United States receives not only imports and surpluses from the Iranian government, but it also receives a certain level of compromise and commitment from Iran when it comes to aid and foreign interaction.

The United States has maintained diplomatic relations with Iran since 1979, when Iranian rebels held U.S. employees hostage in the U.S. embassy in Iran for 444 days. After that series of events, new sanctions and agreements were created by the joint governments in an attempt to salvage relations. Since 1981, the U.S. government has maintained diplomatic ties quite well, until recently.

Currently, with a deteriorating situation involving Iran in Syria, and Israel on the defensive in the same region, the U.S. has some serious decisions to make. These decisions will determine not only the ability of the United States to keep Iran as an ally, but will also change the dynamics of U.S. foreign relations in the Middle East as a whole. While the U.S. benefits from foreign aid to Iran on a monetary and diplomatic basis, there is definitely a delicate balance at stake for the United States and Iran both. Diplomatic Ties

– Molly Atchison

Photo: Flickr

credit access in IranIran has had a long list of sanctions against it since its revolution in 1979 when hostages were held in the U.S. embassy in Tehran. Since then, Iran has had several restrictions imposed by the United Nations, the European Union and some individual countries like Japan and South Korea.

Due to this, the country has had limited access to the outside world, including its financial and banking sector, which has affected credit access in Iran. In January 2016, most of the sanctions were lifted after Iran met the obligations of the nuclear deal signed in April 2015. The prolonged sanctions and recession have affected small-scale domestic businesses, as they could not secure funding from banks and financial institutions due to high interest rates.

With the lifting of the sanctions, various government organizations and international banks are eager to sign agreements with the country. China, South Korea, Austria and Denmark are among the notable countries who are taking steps to facilitate financial transactions with Iran.

Iran is building relationships with small foreign banks who are not hindered by the restrictions imposed on the country. The Central Bank of Iran (CBI) said that about 200 small to medium-sized banks have started correspondence with Iranian banks, helping to revive business with foreign countries.

In August 2017, a $9.4 billion deal was signed by the heads of the Korea Export Import Bank and the Export Development Bank of Iran. The credit access provided is considered an important agreement between the two countries and will be spent on various Iranian projects, both in the government and the private sector.

About 12 Iranian banks acting as agent banks have been chosen to utilize the credit. These banks will help support businesses in various sectors like health, transport and energy. This agreement is an important step in boosting credit access in Iran.

China is Iran’s biggest customer in oil trade and has provided $10 billion to fund water, energy and transport projects, which consist of electrifying a 926 km railroad from Tehran to Mashad. China has also committed another $25 billion, of which $15 billion will be spent on infrastructure and production projects.

In September 2017, Austria’s Oberbank and Denmark’s Danske Bank signed an agreement with Iran. Oberbank had business dealings with Iran long before the sanctions, and they were keen to re-establish a relationship with Iran.

Oberbank will extend its credit line of €1 billion to 14 different Iranian banks, which will help increase business in healthcare, infrastructure and green power. Danske Bank has also signed an agreement for €500 million with 10 different banks in Iran, ensuring no conflict with U.S. and EU-imposed sanctions.

In 2017, CBI cut the interest rate of lending to 18 percent and launched a dedicated finance market known as Iran Fara Bourse, making finance easily available and affordable to small and medium-sized businesses.

The partial removal of sanctions and the investments made by foreign banks will definitely boost the economy, help businesses grow and improve credit access in Iran. This will be of great help to Iranian citizens, both in terms of infrastructure improvements and increased income from businesses.

– Mahua Mitra

Photo: Flickr

Development Projects in IranIran has the second largest economy in the Middle East and North Africa, after Saudi Arabia. However, since the country’s nuclear program became public in 2002, the United Nations, the European Union and several individual countries and organizations have imposed sanctions on Iran in order to prevent the development of military nuclear capability. These sanctions made it difficult, and in some cases impossible, for international aid to reach impoverished parts of the country. For instance, the World Bank has not approved a Country Assistance Strategy for Iran and has not approved new lending to the country since 2005. Some international organizations, though, are funding programs to aid in providing health care and increasing environmental sustainability.

Here is a look at five development projects in Iran:

  1. Malaria Control (United Nations Development Programme)
    In partnership with national and international partners such as the World Health Organization, the United Nations Development Programme has implemented the Intensified Malaria Control in High Burden Provinces towards Falciparum Elimination project in Iran to eliminate the disease. The project, started in October 2011, includes distributing insect nests to protect against infected mosquito bites, training volunteers to engage in early case findings and collaborating with local women as a symbol of community participation.
  2. Stanford Iran 2040 Project (Stanford University)
    Established in 2006, the Stanford Iran 2040 Project allows researchers all around the world to study issues related to the future of the Iranian economy. The core research centers on economy, population, energy, water, agriculture and the financial system. From this research, experts will be better equipped to aid in Iran’s future development by evaluating how these issues affect the country.
  3. Carbon Sequestration Project (United Nations Development Programme)
    The Carbon Sequestration Project aims to capture and control atmospheric carbon in arid and semi-arid regions of Iran and to improve the socioeconomic status of local communities. So far, the project has created 577 permanent jobs, held 400 training programs, established microcredit systems with 63 Village Development Groups, rehabilitated over 30,000 hectares of land and empowered women to play an active role in all of the project’s initiatives.
  4. Iran Transport Projects (Iranian Ministry of Roads and Urban Development)
    The Ministry of Roads and Urban Development in Iran has signed 13 contracts worth $12 billion since March 2015 with investors from the Iranian private sector and foreign companies. These investments fund development projects in Iran across air, road, marine and rail transportations. Some of the notable plans include a 230-mile freeway connecting the city of Kerman to the Persian Gulf Port of Bandar Abbas, as well as a high-speed railroad connecting Tehran to Isfahan, a central tourism hub.
  5. Country Coordinating Mechanism Funding (United Nations Development Programme)
    Country Coordinating Mechanisms (CCMs) develop and submit grant proposals to the Global Fund based on national needs. The Global Fund is a partnership organization designed to accelerate the end of AIDS, tuberculosis and malaria as epidemics. CCMs allow for local ownership and participation in decision-making processes.

These development projects in Iran provide hope for the nation to move toward a more stable and sustainable future.

– Richa Bijlani

Photo: Flickr

Causes of Poverty in IranWith a population of more than 79 million people, Iran is a large country in Western Asia, bordered by Turkmenistan, Iraq, Afghanistan, Pakistan and Armenia. Sadly, of the millions of citizens in this country, 18.7 percent live below the poverty line. There are many causes of poverty in Iran, but two major causes have caused a crisis in the country during the last several years.

Unemployment
Iran’s economy began to struggle in 2014 when a subsidy program adjusted the prices of fuel, the country’s largest export. In 2015, the economy somewhat improved in the first half of the calendar year and the oil and fuel sector prospered. Meanwhile, unemployment in other job sectors increased. By 2016, the unemployment rate reached a three-year high of 12.7 percent, though labor participation increased from around 35 percent to about 40 percent since 2014. An unemployment gender gap was noted in 2016 as well, as unemployment rates for men and women were 21.8 and 10.4 percent respectively.

In 2014, however, Iran saw the height of the unemployment crisis when the rate of unemployed women was estimated to be 46 percent and youth unemployment was twice that of general unemployment.

Additionally, the standard monthly income for families averaging five people per household is about $600, which is considered significantly below the poverty line. In 2014, Parliament’s Plan and Budget Committee announced that 15 million Iranians were living below the poverty line, or 20 percent of the population, and seven million of those people did not have access to any services that might offer them support or assistance.

Internal Corruption
In 2014, news broke that a merchant with close ties to the Iranian government facilitated many oil and gold transactions through the Turkish People’s Bank and embezzled a significant amount of money, putting the country into serious debt. Later, many other fraudulent investors were reported to be active in the oil industry, and though over $1 billion in debt was reported, the guilty were not punished. Between 2013 and 2014, 4,000 cases of embezzlement and theft were reported, most of them being cases of illegally importing luxury cars, hidden monopolies and smuggling, to name a few, but no names of the guilty parties were ever disclosed.

In 2014, Iranian president Hassan Rouhani took office with the determination to develop an effective strategy to reduce poverty for Iranians. Rouhani established a three-part policy to assist the most vulnerable populations and curb inflation, which ended two years of negative growth. Officials under the Rouhani administration provided food aid to about seven million citizens in poverty. Though many aid projects under the administration were criticized for potentially adding to the budget deficit, such policies and programs seek to give immediate help to those living in absolute poverty, and the administration continues to fight for the poor and make food security its number one priority.

These causes of poverty in Iran have led to justified tension and fear among the public and the government that conditions and employment rates will deteriorate further if changes to the subsidy program do not go into effect, and if eliminating government corruption is not made a higher priority. Those changes are key to improving Iranian lives.

Olivia Cyr

Photo: Flickr

The Islamic Republic of Iran is a bit of a paradox. On the one hand, it is a theocratic state and a heavily sanctioned international pariah ruled by a supreme Ayatollah. On the other, it is the heart of the former Persian Empire, and has been a trading hub between the East and West for millennia. Because it is the second largest economy in the Middle East with growing ambitions, infrastructure in Iran has become a major point of focus for the country’s public and private sectors.

The 2015 nuclear deal that was reached between Iran, the U.S., and several European nations including Britain, France and Germany lifted crippling economic sanctions against Iran. In return, Iran has agreed to reduce its centrifuges and enriched uranium and render its nuclear program useless for producing weapons. The lifting of sanctions has sparked the interest of foreign investors and companies looking to do business in Iran. In turn, this has also presented new challenges and opportunities for infrastructure in Iran.

China, in particular, has designs on Iran. Chinese workers have been working in eastern Iran to build up its rail infrastructure, modernizing railroads and standardizing track gauges. This will connect Iran by rail to Turkmenistan and Afghanistan. To the west, Iran is doing the same thing to its railroads, which will be connected to Turkey, and ultimately Europe. China has also been busy building factories, mines, and highways in Iran as part of its increasing investment in the country.

The government of reformist president Hassan Rouhani has been just as involved in ramping up infrastructure in Iran. In addition to the rail projects linking Iran to its eastern and western neighbors, Iran is also in the process of building railways linking its five provincial capitals and its southern port cities to the national capital, Tehran. The Iranian private sector has spent 11 billion dollars in domestic development projects, while the government has spent 9.6 billion dollars on infrastructure in Iran since Rouhani took office in 2013.

Infrastructure in Iran will still need to be developed further to meet the increased foreign investment demands that have been brought on. Yet overall, things are looking bright for Iran, a country known as an ancient crossroads of trade.

– Andrew Revord

Photo: Flickr

Women's Empowerment in Iran
Iran has made notable progress in women’s education and health, including an increased ratio of literate women and girls. Women make up more than half of all university students, as reflected in the 2009 Gender Development Index of 0.770. The Iranian Parliament has adopted “The Charter on Women’s Rights and Responsibilities”, which emphasizes the use of social insurance to provide support to female-headed households and bring about women’s empowerment in Iran.

Unfortunately, the participation of women in community and social development programs is very low. Women lack any social decision-making power and suffer from low confidence and self-esteem. Iran has not yet acceded to the Convention on the Elimination of All Forms of Discrimination Against Women due to opposition from its Guardian Council, who believe that the convention is incompatible with sharia law.

Women’s empowerment in Iran does not have much-needed support from its government, and social barriers continue to restrict women at every step. This is lack of support is partly due to the political ideology that demands women do not stray from their roles as mothers and wives.

Iranian law considers the husband as the head of the household with complete control over his wife’s choices. For example, a husband can prevent his wife from working (some employers even ask for the husband’s written consent) and can even forbid her from traveling abroad and from obtaining a passport. Women’s rights are obstructed to the point that they are not allowed to watch men’s sports in stadiums. An Iranian woman can even be killed by her husband for adultery, according to Iranian law.

Women are not allowed to hold leadership offices like the Presidency or the Supreme Leadership. In fact, according to the 2010 Freedom House report, current laws are more conservative and discriminating than customary practices.

Under the Gender Inequality Index, empowerment is measured by the share of parliamentary seats held by women and by attainment of primary and secondary education by each gender, whereas economic activity is measured by labor market participation. Women’s empowerment in Iran can thus be understood by looking at simple statistics. Only 3.1 percent of women hold seats in Parliament and only 66 percent have gone through secondary education. As for economic activity, female participation in the labor market is a meager 16.2 percent.

UNDP, along with the government of Iran, introduced the Carbon Sequestration Project to help achieve women’s empowerment in Iran. Thanks to the project, women are able to showcase their work and talents, which include handicrafts and traditional culinary skills, at exhibitions.

The government has also implemented projects to enhance Iranian women’s knowledge of information and communication technology (ICT):

  • Establishing a specialized women’s digital library
  • Providing ICT training for women, especially housewives
  • Designing the Presidential Center for the Participation of Women (CPW) website to disseminate the Islamic Republic of Iran’s official information
  • Training the staff of the CPW
  • Establishing the Iranian Genius Women’s Bank for identifying scientifically superior women within professor, assistant professor and lecturer ranks, instant access to necessary information and better usage of outstanding women’s work and providing better-quality services for the country’s scientific and educational geniuses.

Education is a vital part of women’s empowerment in Iran, which the government has recognized. To continue what it has started, changes need to happen on a cultural level, including the elimination of gender stereotypes in textbooks and seeking men’s participation in protecting women’s rights. Continued work can ensure that all women have the opportunity to reach their full potential.

– Tripti Sinha

Photo: Flickr

Iran nuclear dealThe United States’ involvement with the Iran nuclear deal is up in the air, as President Trump has made his fair share of criticism of it. Support for the Iran deal is split down party lines, with most Democrats being in favor of it and most Republicans being against it.

Put into effect in 2015 during the Obama administration, the 100-page Iran deal, also known as the Joint Comprehensive Plan of Action, mandates Iran to cease nuclear development for the next decade and seeks to take apart nuclear sites in the country. In exchange, Iran will receive sanctions relief on a gradual basis as they follow the agreement. Some of the terms of the agreement include removing two-thirds of Iran’s 19,000 centrifuges and the destruction of Iran’s stockpile of uranium.

According to U.S. officials, European allies and the United Nations, Iran has been following the deal. For the Trump administration, this is not good enough. While not violating any terms in the agreement, Iran has reportedly been testing ballistic missiles and supporting militant groups in Syria and Yemen.

During an interview with Fox News, President Trump stated that the deal was done “out of weakness, when actually we had great strength.” The administration is looking to strengthen the provisions of the deal or back out of it entirely.

For those who support the deal, much of the concern lies with their belief that dropping out of it will hurt the United States’ global governance and influence. In an interview with Kasie Hunt on MSNBC, Senator Al Franken said that with European allies, Russia and China having no intentions of abandoning the Iran deal. It would only isolate the United States and “undercut” our leadership in the world.

“If the United States desires to keep nuclear weapons out of Iran, I say they should remain,” said Desiree Hendrix, a political science graduate from the University of Delaware. Hendrix also believes that leaving the Iran deal could jeopardize the United States’ global influence because of its status as being part of the big five in the U.N., and the U.S. would not be able to just assume further alliances with Europe due to its current fragile state.

The House of Representatives will vote on whether the United States will remain in the Iran nuclear deal next week.

– Blake Chambers

Photo: Google

Causes of Poverty in Iran
In 2016, about 80 percent of people in Iran were impoverished. Poverty in Iran can lead to a variety of other issues, including negative effects on the mental health of the country’s youth. Mental health issues in Iranians are found to be linked to a plethora of factors, economic pressure being one of them. Due to the poverty faced by many, suicide is becoming a more common issue.

In addition to affecting the mental health of young people in Iran, the country’s high poverty rate also impacts people’s physical health. With how negatively poverty has affected the people of Iran, it is essential to consider what the causes of poverty in Iran are.

 

Top Causes of Poverty in Iran

 

  1. Sanctions in Iran are cited as a cause of the country’s high poverty rate. These sanctions have affected multiple groups, one of which is Iran’s millions of Afghan refugees. Statistics have demonstrated that Afghans who are able to find work are self-sufficient and actually better the economy of Iran.
  2. Inflation is another cause of poverty in Iran. In early 2013, Iran’s inflation rate stood at nearly 40 percent. The depreciation of the country’s money has lead to an increase in the unemployment rate, which has driven many Iranians into poverty. A solution to this issue that the government of Iran has sought in the past was rationing, which prevented the country’s impoverished populations from being as affected by inflation.
  3. Besides sanctions and inflation, another cause of poverty in Iran is high medical costs. Each year, 7.5 percent of Iranians are driven into poverty because of their medical expenses. Among the top three most common illnesses to affect Iranians is cancer. Many times, the cost of treatment for families is so high that those affected by illness are not able to complete their treatment.

The high poverty rate in Iran has affected millions of Iranian citizens and has taken a toll on the mental health of the country’s youth. Among the most prominent causes of poverty in Iran are sanctions, inflation and medical expenses. As of mid-2017, the government of Iran is working toward implementing a reform agenda, which aims to help businesses and labor markets. The reform agenda is targeted at Iran’s overall goal of reducing its poverty rate. Though they face hard times as a result of their medical and economic status, children and families remain hopeful for the future.

– Haley Rogers

Photo: Flickr

US Is Extending Iran Sanctions ReliefOn September 28, 2017, White House officials announced that the U.S. is extending sanctions relief for Iran implemented by the 2015 Iran nuclear deal, also known as the Joint Comprehensive Plan of Action (JCPOA). The nuclear deal was coordinated by the international community and ended crippling economic sanctions against Iran by the United States, European Union and United Nations, in exchange for Iran reducing its nuclear capabilities for 10 years and limiting uranium enrichment for 15 years. According to the International Atomic Energy Agency, Iran has been upholding its end of the deal.

The relief from key economic sanctions under the JCPOA plays an important role in Iran’s future economic sustainability. The sanctions on Iran’s nuclear program limited the nation’s ability to engage in trade and its access to oil revenue and international financial institutions. This contributed to a recession in 2012 and 2013 that saw Iran’s GDP growth decline by 6.6 percent in 2012. Inflation rose to over 30 percent, resulting in dramatic price hikes in food and basic necessities, and more than a fifth of the country was left unemployed.

Though the Iran deal is still in its infancy, it has already had significant impacts on Iran’s economy. World Bank estimates place Iran GDP growth at 6.4 percent and is projected to grow by over 4 percent from 2017-2019. Projections by the World Bank show significant boosts in oil production and other industries and potential growth in women’s employment.

The Iran deal also has the potential to fuel Iran’s development goals. Sanctions were lifted a month before Iran’s parliamentary elections and were touted as a significant victory of Iran’s moderate leadership. The elections resulted in large gains for development-minded moderates and economic reformers and significant losses for Iranian conservatives.

However, the sanctions relief for Iran remain controversial stateside. Though President Trump has chosen to continue maintaining the Iran deal, he has called the Iran deal “one of the worst deals” in history, and signaled that the U.S. is extending Iran sanctions relief temporarily and may withdraw or renegotiate the deal come October.

Furthermore, President Trump and Secretary of State Rex Tillerson believe that Iran is not complying with “the spirit” of the deal due to its ballistic missile tests, cyber activities and continued backing of terrorist groups, though no clause in the JCPOA forbids Iran from engaging in these actions. Nonetheless, the White House announced new sanctions outside of the Iran deal on several Iranian individuals and entities connected to malicious Iranian cyber activities.

Carson Hughes

Photo: Flickr

Causes of Poverty in Iran
Poverty in Iran? Big yes. Iran’s economy grew at an accelerated pace of 9.2 percent at the close of the Iranian fiscal year, an auspicious preview to the “economic revolution” promised by President Hassan Rouhani in his inauguration earlier this year. However, developments from the economic sector did little to create jobs for Iranians and failed to translate to any significant impact in addressing poverty in Iran. Over 70 percent of Iranians still live in poor conditions, while 30 percent were classified as absolute poor at the end of 2016.

Unemployment due to the lack of available jobs is still a grave concern among citizens, as the government is still unable to improve from the annual job creation rate of 600,000. This dismal number presents an even graver issue to be addressed: with over a million students graduating from college every year, most of these young Iranians are not able to find work and a source of income. One out of four young Iranians are unemployed, and most of them end up falling into the 61 percent of the population who are neither employed nor looking for employment.

Even graduating with a higher degree (for example a master’s degree or a Ph.D.) does not guarantee anybody a job upon graduation. Many of these people have struggled to find jobs that are in line with their specializations and often opt for blue-collar jobs with meager salaries just to put food on the table. Mehdi Ebrahimi, an Iranian man who received a master’s degree from Tehran’s Payame Noor University, has chosen to carry heavy loads in border areas to be able to earn income and fend for his family, instead of embarking on a painstaking search for work in line with his degree.

 

What Causes Poverty in Iran

 

Hardship does not end with securing a job, however, since 90 percent of the labor force lives below the poverty line. Disgruntled workers argue that the minimum wage income of 8,112,000 Iranian rials (roughly $246) is barely enough to cover basic necessities. For a family of four, surviving requires roughly twice the amount.

“Many workers cannot even afford the basic products they need for survival. Many of these items are now considered luxuries,” said Rahmatollah Poormoussa, head of Iran’s state labor organization.

To put the wage disadvantage that these workers have in contrast to their international counterparts, the Iranian minimum hourly wage of roughly $1 is a tenth of the average minimum wage in Western countries and only a third of the wage taken home by workers in Turkey. China, notorious for paying workers the lowest minimum wage, pays about 1.2 times more than their Iranian counterparts.

Contractual employment is also a challenge for these workers. For irregular laborers, contractual work often means an unstable and unreliable flow of income. Most of these workers are not paid until weeks after they are due their wage, and most of the time their wage does not come before their stock of basic necessities is depleted. It is no surprise that 95 percent of contractual workers fall under the poverty line.

Subsequently, they and their dependents suffer from the insecurity of not knowing when breadwinners will be able to take their wages and buy food and other needs. Contractual workers and their families comprise a large amount of the 70 percent of Iranians who reported to be food insecure.

The difficulty of creating jobs may likely be a result of long political turmoil, caused by national and international conflicts, as well as the previous closure of industrial and manufacturing units. Economic conditions have become slightly better after sanctions against the country were lifted, but it has still not been enough to promote the well-being of citizens and alleviate conditions for the poor.

Critics of the Rouhani’s administration have also cited the regime’s pouring of funds into foreign conflicts and military spending rather than on infrastructural and social welfare projects as a reason for the ineffectiveness of government to address poverty in Iran. If Rouhani’s government really wants to jumpstart the “economic revolution” he has promised his people, they say, he must begin to see infrastructural and welfare projects as a top priority for his administration.

Investing in these projects will be a good starting point in fixing the market, improving the quality of lives of workers and subsequently address the growing problem of poverty in Iran.

Bella Suansing

Photo: Flickr