Medicines dry up in Iran but Porsches still roll in
by: The Times
PROFITEERING by Iran’s Revolutionary Guard is pushing the country to the brink of a health crisis as imports of vital medicines dry up – while luxury goods continue to flow to the Islamic Republic’s ruling elite.
A subsidised exchange rate, imposed by the government to protect imports of food and medicine from the collapse of its currency, has been exploited by companies linked to the Revolutionary Guard to bankroll the purchase of sports cars and other luxury items.
At the same time, the powerful militia is steadily excluding the health ministry from access to cheap dollars to buy medicines and equipment. According to sources inside Iran, 87 of the top 100 in-demand medicines, including treatments for leukaemia and multiple sclerosis, have been cut off from the subsidised market. Health institutions have had to import medicine through the private sector, where they fall prey to unscrupulous traders and currency dealers.
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“This is all being controlled by the Revolutionary Guard. They have prioritised foods like meat, rice, flour and sugar, the things that might actually provoke riots if they run out,” said one Iranian source.
“They have calculated that medicine is not a priority because the sick don’t riot.”
Under pressure from international sanctions, the Iranian rial has fallen to an all-time low against the US dollar, sparking clashes on the streets of Tehran two weeks ago. On Thursday , the currency passed 40,000 to the US dollar, less than half its value a year ago.
To offset the impact of the currency crisis, the regime has imposed a three-tiered exchange rate for imports. Essential items in the top tier, including basic foodstuffs and medicine, should enjoy a rate of 12,260 rials to the dollar.
Instead, health officials have found access to cheap dollars blocked and have been forced to shop on the open market at three times the price. A €4 million ($5m) agreement to purchase pharmaceuticals from Switzerland last week collapsed after the currency dealer added a 25 per cent premium on the deal.
Rather than protecting basic goods for ordinary Iranians, the tiered rate has encouraged corruption and widened the gulf between rich and poor.
The situation moved Iranian Health Minister Marzieh Vahid Dastjerdi to speak out on Wednesday. “We have been pursuing the currency which we were told was allocated to import medicine with since February but … the amount received is so little it’s not even worth mentioning,” she said.
Even when medical imports are granted the subsidised rate, Iranian sources say, health companies often receive only a fraction of their order, as middlemen siphon off the discounted dollars for black-market currency trading.
While medicines vanish from pharmacy shelves, the Revolutionary Guard continues to oversee imports of luxury goods to the elite, often at the subsidised 12,260 rate.
When Porsche issued a limited edition of its classic 911 sports car this year, two companies linked to Etebarat Mehr Financial Services, part of the Revolutionary Guard’s investment arm, began taking down payments for the new model. Porsche had estimated 40 sales to the Islamic Republic. But after a surge in requests from wealthy Iranians, the companies requested 1400 vehicles.
Etebarat Mehr is exempt from oversight by Iran’s central bank and, like most of the Revolutionary Guard’s operations, is able to work outside the law. The same subsidiaries are thought to be behind the arrival of 750 luxury cars imported with dollars purchased at the 12,260 exchange rate this year. The government launched an investigation into the claim last week, but Iranians are skeptical.