The government’s hand in the people’s pocket
According to Iran Gate’s recent report, an audio file has been released by the hacker group Justice Ali, which has raised concerns among Iranian retirees and the elderly about their future and receiving their rightful pensions and allowances, which are their only means of livelihood.
In this audio file, the voice of Mohammad Reza Farzin, the head of the Central Bank, can be heard apparently talking to Mohammad Mokhber, the first deputy of the president. In this recorded telephone conversation, it seems that Mokhber is aware of the additional burden of retirees’ pensions and allowances on the government.
The audio file released by the hacker group Justice Ali from the telephone conversation between Mohammad Reza Farzin and Mohammad Mokhber reveals concerning points about the future of retirees in Iran. Farzin confirms in this conversation that Mokhber acknowledges the bankruptcy of pension funds and the additional pressure of paying retirees’ allowances on the government.
The head of the central bank seems to be under pressure to help the government in providing resources for pension payments, which is known as money printing. In this conversation, Farzin also points out a very important point, which is the bankruptcy of pension funds that have not yet declared their bankruptcy. These points are of great importance, but ultimately one clear conclusion can be drawn, which is the intensification of inflation due to the government’s borrowing from the central bank to provide resources for pension payments.
The crisis of bankruptcy in pension funds
The issue of corruption and bankruptcy in the country’s pension funds has always been evaluated as one of the crises that has been placed as a time bomb in the heart of Iran’s economy. From embezzlement in the teachers’ pension fund to heavy deficits and imbalances in similar funds, there are factors that have led to the bankruptcy of these pension funds. Another factor is the heavy debt of the government to these funds, which has existed for years and now reports indicate a sudden and steep increase in this debt in the government of Ebrahim Raisi.
There is always unfinished business.
But what is the root cause of this bankruptcy and the main problem of the pension funds crisis that has put the livelihood of Iranian elderly at risk? Why has the government, being the largest and wealthiest institution in the Iranian governance structure, dipped into the pockets of retirees and created the conditions for their bankruptcy?
The reason for this is quite clear. The government is suffering from a mismatch between its resources and expenditures. In short, retirees are the ones who are paying the heavy price for the government’s budget deficit. In other words, the government, driven by the motivation to reduce expenses, fails to pay off its debts to the funds and insurances. These institutions and their stakeholders are the ones who are bearing the burden of the government’s lavish spending.
On the other hand, despite refusing to repay its debts to these funds, the government still struggles with the problem of securing resources to balance the ratio between expenditures and resources. Simply put, although the government does not pay back its loans to retirees and uses the excuse of a heavy budget deficit, it still cannot meet this deficit and resorts to borrowing from the central bank, which ultimately leads to intensified inflation.
What is the main concern of the government?
This destructive policy of the government not only imposes heavy pressure on the ordinary sections of society, but also puts additional pressure on the elderly and retirees in the country. This pressure was always felt after the announcement of the increase in wages and pensions annually, but in the spring of 2022, this pressure was so severe that it led to nationwide protests by retirees in most provinces of the country.
The worried and anxious voice of Mohammad Reza Farzin in this leaked audio file clearly indicates the fact that the Ibrahim Raisi government has put a lot of pressure on him and the Central Bank to provide the necessary resources for paying retirees’ pensions. The Central Bank will have no choice but to resort to printing powerful money for this purpose. Therefore, Farzin is trying to convince the informant that such an action would be very dangerous.
But what is the reason for the government’s fear of this matter? Naturally, in a situation where the country has faced nationwide protests in the past four months, the government is also afraid that economic crises, both small and large, will cause other sections of society to join the recent protests.
In this particular case, which refers to the bankruptcy of pension funds, the government has been aware that the rights and pensions of this group will not be paid due to the bankruptcy of the mentioned institutions, and retirees will join the ranks of protesters, mainly consisting of young and even adolescent members of society.
Therefore, the government is trying to provide the necessary resources in the most destructive way possible by putting pressure on the central bank, so that pension payments will not be interrupted. However, it should be noted that this government action will not only be in line with meeting the needs of retirees and the elderly.
Rather, it is equivalent to reaching into the pockets of this group silently and secretly. Now, with the release of this audio file, which has not been mentioned in official media, we must wait and see if the government still intends to pay retirees’ pensions through the mentioned method or if there is another miracle on the way that economists cannot comprehend.
Persian
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