Bonyads: Iran’s Greatest Strength against Sanctions

June 6, 2012

Media_httpm3paperblog_pscdc(Iranian charitable trusts control an estimated 20–40% of Iran’s GDP. Subsidized by the government,)(American Thinker)Bonyads provide plenty of strategic and tactical advantages to anyone willing to do business with Iran. Not only does the Iranian Supreme Leader control the Bonyads, but allies in Venezuela and even Argentina and Brazil have been known to implement and adhere to Iranian Bonyad ventures. In Venezuela alone, there are at least ten manufacturing plants whose shareholding distribution is 49% Iranian businesses connected with Bonyads, leaving 51% within the Venezuelan state.

Tactically, Bonyads are often related to the Iranian Revolutionary Guard Corp (IRGC). Operatives from the IRGC along with members of Al-Quds and Hezbollah go undercover, portraying themselves as employees or officials of trading companies, banks, and cultural centers, or as representatives for the Foundation of the Oppressed and Dispossessed (Bonyad-e-Mostazafan), or the Martyrs Foundation.

How serious is Venezuela’s Bonyad approach? Note the executive board members within their Banco Internacional de Desarrollo — Rahim Faramarzi, Kourosh Parvizian, Reza Raei, Parvin Tavallaeizadeh, Samad Vafaee, Mohsen Bolhasani, Ssan Shokrian. Of note, all of these directors are Iranian. Their backgrounds make them out to be high-profile businessmen, but some are known either to have previously operated or to currently operate directly for the Iranian Revolutionary Guard Corp.

If the United States intends on imposing sanctions on Iran, it will need to impose such sanctions on Venezuela as well, along with a handful of other nation-states and privately owned global banking industries. Needless to say, this won’t happen — and such a move would not be successful anyway, considering how the Bonyad systems work.

Bonyads are funded both actively and passively. Islamic almsgiving, known as Zakat, often flows into Bonyads. The mysterious Islamic Hawala system has been known to funnel money into established Bonyads as well.

Hawala, for its part, is an informal underground monetary transfer system. Think of Western Union on steroids, but without any oversight. Completed 100% on trust, Hawala involves money exchanges among multiple entities. Some players need money now, others loan the money, an intermediary handles the transactions, and interest is paid through monetary means or through goods and services. The system never ends because payments must be made to those in need and to those who loan.

The assets of many Iranians whose ideas or social positions ran contrary to the new Islamic government were also confiscated and given to the Bonyad without any consequence.Today, there are over 100 Bonyads, and they are criticized for many of the same reasons as their predecessors. They form tax-exempt, government subsidized, consortiums receiving religious donations and answerable directly (and only) to the Supreme Leader of Iran. The Bonyads are involved in everything from vast soybean and cotton fields to hotels to soft drinks to auto-manufacturing to shipping lines. The most prominent, the Bonyad-e Mostazafen va Janbazan, (Foundation for the Oppressed and Disabled), for example, “controls 20% of the country’s production of textiles, 40% of soft drinks, two-thirds of all glass products and a dominant share also in tiles, chemicals, tires, foodstuffs.” Some economists argue that its chair, and not the Minister of Finance or president of the Central bank, is considered the most powerful economic post in Iran.In addition to the very large national Bonyads, “almost every Iranian town has its own bonyad”, affiliated with local mullahs Estimates of how many people the bonyads employ ranges from in excess of 400,000 to “as many as 5 million”.