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From what I understand, Iran does not allow foreign banks to operate in the country, and thus with such a policy Iran is de-linked from the International Jewish dominated banking system. This makes the country less vulnerable to Soros type of capital raids and speculation which bedeviled many Asian countries.
On the other hand corrupt illiterate mullahs who run huge charities called Bonyads can't be good for the economy. Hashemi Rafsanjani is a mullah and a billionaire, who has used his political office to become one of the richest men in the country, through illegal wheeling and dealing...amazing for a humble one time corporal who was originally fired from the Shah's military for spreading Islamism. He reinvented himself as a mullah, without the obligatory beard, hitched on board the Iranian Islamic revolution and has never looked back since.
We have yet to see a high profile mullah charged with corruption. And then there is the Larijani brothers.....and so forth.
Then there is the issue of why Iranian ex-patriots have taken $1,500,000,000,000 out of the country, and why the mullahs allowed them to. Most poor country's have stringent capital flight laws.
Capital Flight is defined by Wikipedia as:
"Capital flight, in economics, occurs when assets or money rapidly flow out of a country, due to an event of economic consequence. Such events could be an increase in taxes on capital or capital holders or the government of the country defaulting on its debt that disturbs investors
and causes them to lower their valuation of the assets in that country,
or otherwise to lose confidence in its economic strength. This leads to a disappearance of wealth, and is usually accompanied by a sharp drop in the exchange rate of the affected country - depreciation in a variable exchange rate regime, or a forced devaluation in a fixed exchange rate regime.This fall is particularly damaging when the capital belongs to the
people of the affected country, because not only are the citizens now
burdened by the loss of faith in the economy and devaluation of their
currency, but probably also their assets have lost much of their nominal value. This leads to dramatic decreases in the purchasing power of the country's assets and makes it increasingly expensive to import goods.
Illegal capital flight, also known as illicit financial flows,
is intended to disappear from any record in the country of origin and
earnings on the stock of illegal capital flight outside of a country
generally do not return to the country of origin."
EXAMPLES OF COUNTRIES WHICH EXPERIENCED CAPITAL FLIGHT:
In 1995, the International Monetary Fund
(IMF) estimated that capital flight amounted to roughly half of the
outstanding foreign debt of the most heavily indebted countries of the
world.Capital flight was seen in some Asian and Latin American markets in the 1990s. The Argentine economic crisis of 2001 was in part the result of massive capital flight, induced by fears that Argentina would default on its external debt (the situation was made worse by the fact that Argentina had an artificially low fixed exchange rate and was dependent on large levels of reserve currency). This was also seen in Venezuela in the early 1980s with one year's total export income leaving through illegal capital flight.In the last quarter of the 20th century, capital flight was observed from countries that offer low or negative real interest rate (like Russia and Argentina) to countries that offer higher real interest rate (like the People's Republic of China)
A 2008 paper, authorized by Raymond Baker, Director of the Global Financial Integrity
estimated illicit financial flows "out of developing countries are some
$850 billion to $1 trillion a year". This study also found that China, Saudi Arabia, and Mexico accounted for the three largest shares of worldwide illicit financial flows.
Russia, and India are excellent examples of countries which have suffered Capital Flight:
HOW DO YOU JIHAD AGAINST CAPITAL FLIGHT, AND RECTIFY THE VERY SMALL GDP GROWTH OF iran?
"The fight against capital outflows boils down to fighting against the
reluctance of a country's inhabitants to invest in their own economy. As
long as investments abroad are incomparably more attractive than
investments at home, the small reductions in returns on foreign assets
produced by administrative barriers to capital outflows cannot be
expected to significantly slow these outflows. The key factors in
limiting capital outflows are not administrative measures, but rather a
sensible tax system and legislation, and balanced budget policies that
stimulate rather than impede investment in " Capital Flight: What it is and how to Combat it? by
O. V. Dynnikova
"The role of corruption in impelling capital flight. Identifying
corruption as one dimension of poor governance, the empirical analysis
explores direct linkages between corruption and capital flight in a
broad sample of countries. The novelty of this investigation is that it
is based on a portfolio choice model of asset allocation that explicitly
recognizes corruption as contributing to the variance of domestic
investment risk. The main testable proposition emerging from our
theoretical specification is stated thus: does corruption impel capital
flight by raising the risk of domestic investment, ceteris paribus?
An
econometric analysis suggests that, holding other determinants of
capital flight constant, corruption does have a positive and significant
impact on capital flight.
Based on these results, the paper concludes
that advocating good governance by combating corruption makes a great
deal of sense for countries aiming to staunch capital flight.
Capital
flight and corruption are some of the main causes of the poverty in the
South. Without capital flight and corruption the debt crisis would not
exist in its current form. Capital Flight and Corruption Treaty NGO
Alternative Treaties at the 1992 Global Forum"
According to Transparency International Iran is 133 in the league table of all 194 sovereign states in terms of corruption and transparency......Afghanistan, Somalia and North Korea are at the bottom at 174.
Iran to be effective and efficient Iran must wage jihad against corruption. It is good that Iran prosecutes the thieves who steal $1 or 2 billion from the poor country, but what about the $1,500,000,000,000 which has left the country through the back door?
_____________________________________
Posted by willylomanand Scot Creighton,
from Black Listed News
Iran’s judiciary system recently worked through the biggest banking fraud case in the nation’s history.
According to The New York Times, the outcome of the case was made official on Monday. Results were dramatic to say the least.
Judiciary spokesman Gholam-Hossein Mohseni-Ejei told reporters that
four people had been officially sentenced to death on charges of
corruption and “disrupting the country’s economic system.”
The guilty party was responsible for mishandling $2.6 billion of
funds – using forged documents in order to receive credit from banks,
permitting them to purchase state-owned companies.
From PressTV:
According to the indictment, the owners of Aria Investment
Development Company, which is at the center of the controversy, had
bribed bank managers to get loans and letters of credit. The company has
more than 35 offshoots which are active in diverse business activities.
…
“The four are Mahafarid Amir-Khosravi…[the prime suspect], Behdad
Behzadi, his legal advisor, Iraj Shoja, his financial solicitor and
Saeed Kiani Rezazadeh, head of the Ahvaz branch of Saderat Bank,” he
[Gholam-Hossein Mohseni-Ejei] said.
Additionally, the president of the Bank Melli branch in Kish was
condemned to life in prison. The former deputy minister Khodamorad
Ahmadi has been ordered to spend a decade in prison as well, according
to Iran’s attorney general, Mohseni-Ejei.
Several others involved in this infamous scandal have also been
slapped with heavy fines and many have also been prohibited from holding
public office.
Economist Nouriel Roubini added his two cents on the subject, reporting to Bloomberg:
“Bankers are greedy; they’ve been greedy for the last
hundreds of years…t’s not a question if they are more immoral today
then they were a thousand years ago, you have to make sure they behave
in ways in which you minimize those risks.”
This message surely hits a little too close to home for central
bankers across the globe who have been engaged with fraud and corruption
in the past or present.
Constituents and political leaders spend a big chunk of time debating
over how to deal with our crumbling economy. Ending system abuse from
insiders and the Fed alike would undoubtedly have a positive ripple
effect, but how is that goal going to be achieved? Thus far, not a
single chief central banker has been arrested in light of the financial
crisis.
This is completely asinine.
They keep making more money, while we struggle to thrive in the
middle class. The brutal truth is that banks prosper when people are on
welfare. They’re invested in keeping you down and could care less about your American Dream.
Perhaps Iran is on to something by enforcing real consequences when
insiders mess with the country’s entire economic system. The death
sentence decision is obviously harsh (Iran’s justice system is pretty harsh in general). Alas, what’s decided cannot be undone. They said they are trying to set an example.
Elite criminals shouldn’t be treated differently than any other criminal; they should be prosecuted, not protected.
