Where Is My Oil? Corruption in Iran’s Oil and Gas Sector

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By Khosrow Semnani, President, Omid for Iran

The establishment of the Islamic Republic in Iran in 1979 was premised on the notion that secular Western models of government were base, materialistic and corrupt. The persistence of poverty was viewed as a symptom of tyranny—an expression of the Shah’s contempt for the Iranian people and a proof of his enmity against God. By replacing kings with clerics as the custodians of the divine order, Ayatollah Sayyid Ruhollah Mūsavi Khomeini said he would wage a war against corruption on earth.

By placing power in the hands of the clergy—substituting the turban for the crown—Iranians entrusted their country to what many hoped would be an incorruptible class of militant clerics—a religious vanguard that would liberate “the oppressed on earth.” In 1979, on the anniversary of Dr. Mohammad Mussadegh’s birthday, Ayatollah Khomeini put forth his vision of the new Islamic order:


Our path is not the path of oil. Oil does not matter to us. The nationalization of oil does not matter to us. It is a mistake. Our goal is Islam. Our goal is not oil. If someone nationalizes oil, but puts aside Islam, why follow him?
— Ayatollah Ruhollah Khomeini

After 40 years

Today, almost 40 years after the Islamic Revolution of 1979, the Iranian people are reaping the bitter fruit of a failing state and economy. Far from rooting out corruption, after four decades of Islamic rule, the tables have turned. Iran’s leaders act as if their religious status exempts them from accountability in this world and the next.

In theory and practice, the principle of Velayat-i Faqih (rule of the supreme religious leader), is designed to facilitate corruption on a grand scale. The Islamic Republic is premised on the negation of the Iranian nation as a sovereign entity endowed with a title to their oil, gas, and natural resources. The institutions operating in the leader’s name, claim to derive their authority from a divine source—not from human realities, let alone economic necessities. The operative principle is impunity, not accountability.

The Costs

The results of this system of governance speak for themselves. Instead of enjoying the fruits of prosperity, today Iran is facing a humanitarian catastrophe.

  • More than 10 million people live under the absolute poverty line, with another 30 million under the relative poverty line.

  • Eleven million live in slums. (source)

  • The number of unemployed is at 3.5 million—add the underemployed and the figure stands at a staggering 6.5 million.

  • Youth unemployment is at more than 20%, with 60% unemployment in underprivileged areas.

  • In 2012, Iran had more than 2.2 million addicts. It also had 1.2 million heroin addicts and 800,000 recreational users—the highest per capita rate of heroin users in the world. (source) In 2017, the number of addicts is officially estimated at 2.8 million, with some putting the figure as high as 10 million. (source)

  • From 2006-2016, HIV rates of infection through sexual transmission have doubled from 15% to 30%. (source)

  • More than 600,000 people are imprisoned every year, with more than 60% identified as drug users.

  • From 2006 to 2013 when the average price of oil had climbed over $100 barrel, Iran’s economic growth was 2.2%, with inflation rate climbing from 20.3% to above 40% in 2013.

  • The middle class has seen its purchasing power decline year after year. According to a BBC review of Central Bank data, Iranians have become “15% poorer.” From 2008-2018, the average household income of an urban family has declined by 15%.

Although many Iranians thought the revolution would usher in a new era—ending the dismissal of their rights and the abuse of power by a monarchical order—in practice, by voting for the principle of Velayat-i Faqih, they essentially surrendering their civil, economic and social rights to a new monarch, a religious leader who claimed his right to rule from a divine source.

Who to blame?

In a country endowed with Iran’s human and natural resources, the social costs of this unfolding tragedy can no longer be blamed on corrupt individuals or the West, but on the failure of a political and economic system to deliver on its promises to the Iranian people.

With corruption on a scale unimaginable under the Pahlavi dynasty, it is not Iran’s kings, but Iran’s ruling clerics who are the source and beneficiaries of corruption. And sadly, instead of fighting corruption by making transparency, accountability, and service the pillars of government, powerful factions in Iran’s Parliament and judiciary serve as a cloak for covering up the plunder of Iran’s resources rather than exposing corruption.

As in the feudal and colonial era, the people are once again treated as subjects, not citizens.

Taking ownership

The story of Iran’s oil is at the heart of this historic betrayal. It can no longer be overlooked. What is at stake is the Iranian people’s sovereignty and prosperity.

Corruption is not only an economic and a political threat. It is an existential threat: a violation of the Iranian people’s rights to their natural resources, a negation of their control over the institutions that govern these resources, and the denial of their claims to every drop of their oil and the benefits that flow from it.

In 2009, the Iranian people and media asked a question that shook the world: “Where is my vote?” Today, we join them in asking a related question, one that makes the difference between poverty and prosperity for millions: “Where is my oil?”

This website, WhereIsMyOil.org, is dedicated, like the eponymous report that launches it, to the men and women in Iran’s oil and gas industry. They laid the foundations for Iran’s progress and prosperity. Our hope, at Omid for Iran, is to see the people of Iran understand and fully take ownership of their oil, demand transparency and accountability for the industry and government which oversees it, and enjoy the progress and prosperity they fully deserve.


This blog post was adapted from the pages 5 through 7 in Where Is My Oil?

 
 
Michael De Groote