War no strain on money front, Iranian bank official says
E. Rashidzadeh, the vice-governor of Bank Markazi, Iran's central bank, did not mind London's Financial Times calling him a "revolutionary central banker." He admits, "We are changing many structures in Iranian banking."
He also helps preside over the finances of a nation at war with Iraq. In an interview here, he made these claims:
* Despite Iran's loss of oil revenues as a result of that war, "We have enough assets and reserves to pay all government bills."
In fact, he maintains that even if not a drop of oil is exported, Iran's foreign-exchange reserves are adequate for six or seven months at the present rate of imports. They would last about 18 months if imports were reduced to a lower level.
That would still leave untouched Iran's gold reserves and its fabulous hordes of diamonds, rubies, and other jewels assembled by the late Shah and his royal predecessors and stored in a vaultlike museum under the Bank Markazi building in Tehran.
International Monetary Fund statistics indicate that Iran's gold reserves would be worth more than $2.5 billion at today's market prices. It total reserves are put at $11 billion (as of last winter), but more than $8 billion of these held by American banks are frozen, by an order of President Carter issued last Nov. 14. Mr. Rashidzadeh would not specify the exact size of the reserves available for use today.
* "The war is not going to leave any severe effects on the economy."
Mr. Rashidzadeh maintained that Iraqi shelling is "not scoring direct hits" on the Abadan refinery or the Kharg Island oil shipping terminal, but rather, hitting storage tanks. So, he implied, these oil facilities could be working again relatively soon.
Further, Iran has four more refineries, at Isfahan, Tehran, Tabriz, and Kermanshah, and only the latter has been damaged, he said.
Industry, he indicated, has not been hard hit by the war, and agriculture is basically untouched.
Because of the revolution, however, the nation's output of goods and services had declined 40 percent in the Islamic year that ended last March 21, he said. This happened primarily in the industrial area. Much of industry inherited from the time of the Shah depended heavily on imports. Such plants were largely assembly operations not adding much value to the final product, he continued.
Agriculture production has grown. This year Iran will even be self-sufficient in wheat, he said. This is partly because of good weather, partly because the new government is devoting more resources to poor farmers. Outside of the "planning budget," some $2 billion of a total of $4.2 billion has gone to this "peasant agriculture," he added.
Mr. Rashidzadeh, who has a doctorate in rural economic development from the University of Geneva, is eager to encourage Iranians to return to the countryside from the cities. He attacks the Shah for devoting most of its agricultural assistance to agro-industry owned by foreigners and big landowners rather than small farmers.
His boss, Bank Markazi governor Ali-Reza S. Nobari, has a doctorate in operational research from Stanford University. However, he too tends to talk in revolutionary style, saying in an interview in Tehran: "I have a visionary approach. I reject all views of a consumption-based society. . . . If [central bank practices] don't follow humanitarian lines, they are not worth it."
The interview with Mr. Rashidzadeh took place in the sixth-floor suite of the Iranian delegation in Washington's Sheraton-Park Hotel Oct. 3, just before the close of the annual meeting of the International Monetary Fund (IMF) and World Bank. Several doors down the hall and around the corner were the offices of what Ayatollah Ruhollah Khomenei terms "the Great Satan," the United States. Political antagonists often rub shoulders inadvertently or purposely in such international gatherings.
Because of world tensions, security was tight here. When a duffel bag arrived for a member of the Iranian delegation, his secretary checked twice with the security guard to see that the bag had been thoroughly examined to make certain it did not contain a bomb.
Mr. Rashidzadeh spent much of his time at the annual meeting attacking the US for freezing Iranian assets. "There could be no economic or even political reason to justify manipulation of the international monetary system," he stated in his speech to the plenary session. "It was a dangerous weapon that affected not only those against whom it was aimed, but also had global repercussions, which have resulted in undermining the world confidence in the international banking system."
He went on: "The US measures provided an illegal precedent for any country issuing an international reserve currency to deny the holder at any time the right of usage of such currencies. A very serious implication of such an action is the vulnerability of developing countries in the face of similar measures taken by the government of an industrial country."
Not once in the speech, as printed, did he mention one leading reason for the US freeze of Iran's financial assets -- its holding of American diplomatic hostages.
Another immediate reason, recalled Treasury Secretary G. William Miller at a press conference last Thursday, was a threat by Abolhassan Bani-Sadr, then finance minister, to move Iran's assets "out of the United States and thereby destabilize foreign-exchange markets."
Those assets, Secretary Miller said, will be returned when the hostages are released.
Mr. Rashidzadeh wants the IMF to consider once more the legality of the US freeze of Iranian assets. Mr. Miller noted that this was already done late last year and that Iran did not appear to argue its case. He maintains it is a dead issue at the IMF.
The Iranian central banker, however, said he hoped that the chairman of the meeting, Amir Jamal, a Tanzanian, would mention the asset freeze in his final report to the plenary session Friday. But Mr. Jamal did not do so.
Mr. Rashidzadeh tried to put the political act of taking hostages in one category and the freeze in a separate area. "Do not mix politics and economics, " he said. "The problem is not a problem of hostages. The main problem is of financial markets, capital markets, and international order. This freeze sets a dangerous precedent. President Carter said we should put aside political considerations in the World Bank and the IMF, and you see, he used political considerations in the case of the PLO [Palestine Liberation Organization]." (The US blocked the PLO from winning observer status at the IMF-World Bank meeting.)
Many financiers and central bankers did not agree with the freeze of Iranian assets by the US. But Iran may have a hard time winning many serious sympathizers while it still violates international law by holding the American hostages.