After the nuclear talks between Iran and the P5+1 (the United States, Britain, France, Russia, China and Germany) in Moscow last June, dialogue at the senior political level was put on ice due to the American presidential vote. Eighty-five days have passed since the re-election of Barack Obama, and high-level talks [...]]]> via Lobe Log

After the nuclear talks between Iran and the P5+1 (the United States, Britain, France, Russia, China and Germany) in Moscow last June, dialogue at the senior political level was put on ice due to the American presidential vote. Eighty-five days have passed since the re-election of Barack Obama, and high-level talks between Iran and the P5+1 have yet to resume. There are many reasons for this.

On the Iranian side, there are four main, mutually reinforcing factors behind Tehran’s cautious approach to fresh talks. First, certain figures within the political system, the nezaam, are in favor of waiting for Obama to finalize changes to his cabinet, including his national security team. These figures are by no measure dominant. Indeed, the prevailing narrative in Tehran is that a change of personalities won’t make any difference and that the American nezaam has certain engrained interests and institutions as well — among them, enmity with the Islamic Republic.

Meanwhile, more influential Iranian figures are pushing for Western positions to be clarified in more detail before the resumption of talks. The reason behind this maneuver is to maximize readiness for potential damage control; Iran does not want to be blamed for any diplomatic failure.

Inherent in the latter aspect of the situation is an Iranian desire to not be seen as being dragged to the negotiating table by sanctions. While Iran does seek sanctions relief, it wants such measures to be put forward in a serious manner.

The majority of the most punishing Western oil and financial penalties were imposed after the beginning of Iranian enrichment of uranium to 19.75% purity in 2010. In exchange for movement on this level of enrichment, Tehran would need some removal of the post-2010 sanctions, which include the EU oil embargo, shipping & insurance penalties, as well as US sanctions on the Central Bank of Iran.

The most important factor affecting Iranian behavior, however, is how it has entered its election cycle. Tehran is filled with debate and rumors about likely presidential candidates and what they’ll be able to do after assuming office. Western policymakers would be wise to recognize that all politics is local and show an understanding for how the Iranian presidential elections may slow down dialogue. The Iranian leadership’s main preoccupation until June is to maintain maximum stability. In this context, a nuclear deal that cannot be sold at home is not necessarily better than no deal and more sanctions.

While the Supreme Leader has final say on the nuclear issue, the next president would at least initially be able to enter the scene with some fresh ideas — both his own and from higher circles — and have room for maneuvering. The exact amount of political space, of course, depends on which candidate will win.

There are two main reasons for this: first, a new president would be better suited to pursue an opening with blessing from above, as failure can easily be deflected on him before domestic public opinion. Second, whoever the next president will be, it is unlikely that he will at least initially be as divisive as Mahmoud Ahmadinejad. Less tension at home will give Iran a stronger negotiating stance, along with improved Western acceptance of an Iranian ability to deliver.

This line has been echoed by influential officials such as former envoy Sadeq Kharrazi, who has argued that “lively elections” will empower the government and bring “wise people to power” with a consequent greater Iranian capacity to extract concessions from the United States. Kharrazi also said that he didn’t believe relations between Iran and the US would be normalized during Obama’s second term prior to Obama’s re-election and has indicated that the real window for diplomacy on the nuclear issue will be after Iran’s presidential election. Kharrazi argues that this is because the Americans have never been and never will be willing to negotiate with Ahmadinejad’s government.

The writing between the lines is that many figures within Iran are not going to let any negotiations with the US be successful as long as Ahmadinejad is in power.

In sum, while Iran’s bottom line on the nuclear issue won’t change (i.e. enrichment on Iranian soil), the next Iranian president would at least initially be able to pursue an opening. Moreover, a new president would give the United States in particular a badly needed new “face” to deal with.

Ultimately, power to change the US-Iran relationship is equally in the hands of Barack Obama. A day after Obama’s first Nowruz message in 2009, at the end of a damning speech, Iran’s Supreme Leader responded that “if you change your attitude, we will change our attitude.” Most likely, that offer still stands.

Until then, a mutual desire to keep things from spiraling out of control will in all probability result in both sides kicking the can down the road until after this summer.

- Mohammad Ali Shabani is a doctoral researcher at the School of Oriental & African Studies, University of London and the Editor of Iranian Review of Foreign Affairs.

The escalating sanctions regime that has been imposed on Iran by the United States and European Union has placed all parties involved in a rather strange position. On the US side, the palpable glee over the dropping value of the Iranian currency and the success sanctions have had in causing misery [...]]]> via Lobe Log

The escalating sanctions regime that has been imposed on Iran by the United States and European Union has placed all parties involved in a rather strange position. On the US side, the palpable glee over the dropping value of the Iranian currency and the success sanctions have had in causing misery has been hard to hide. It is also politically astute for domestic electoral purposes to take credit for the success of sanctions. That is why State Department spokeswoman Victoria Nuland simply couldn’t resist giving quite a bit of credit to the sanctions regime in the immediate aftermath of the currency devaluation in Iran:

Our understanding is that the Iranian currency has dropped to a historic low today against the dollar in informal currency trading, this despite some frantic efforts by the Iranian government last week to try to prop it up, rearrange the way it dealt with these issues…..From our perspective, this speaks to the unrelenting and increasingly successful international pressure that we are all bringing to bear on the Iranian economy. It is under incredible strain. Iran is increasingly cut off from the global financial system.

Yet it is not particularly seemly or civilized to take too much credit for causing misery in front of a global audience. That’s why Obama Administration officials twist and turn to explain that while sanctions are the mark of the administration’s great success, it is the Iranian government that is responsible for the deteriorating state of Iran’s economy. In the words of White House spokesman Jay Carney:

Iran’s leaders have made conscious choices about how they manage their economy, how they prioritize their budget and how they respond to the concerns of their people.  The regime has chosen to spend money to pursue nuclear activities in violation of its international obligations, to support Bashar al-Assad’s brutal regime, to enable terrorist acts around the world, and to undertake destabilizing activities around the region.

The chosen examples of mismanagement is telling. Somehow we are expected to believe that the Iranian economy is in significantly worse shape than it was, let’s say, two years ago because of military and nuclear-related spending which I doubt constitutes even 1 percent of the country’s gross domestic product. (The latest figure that the Stockholm Institute for Peace Research has for Iran’s total military spending as a percentage of Gross National Product is 2 percent for 2008 while the CIA fact book puts the 2006 percentage at 2.5 percent. That’s a significantly lower percentage than neighboring countries like Turkey, Saudi Arabia and of course the United States, which, given its vast military presence in the region, is effectively Iran’s neighbor).

But US government officials are not the only ones caught in a delicate situation regarding the impact of sanctions, trying as they are to balance their jovial sense of success for the imposed policy of collective punishment and their avowed care for the “freedom loving people” of Iran. The EU foreign ministers’ statement on the latest sanctions slaps more broad punishment against the whole country while attempting to protect its writers from a guilty conscious. They want the world to remember that the innocuously worded “restrictive measures” are not aimed at the Iranian people but only “at affecting Iran’s nuclear program and revenues of the Iranian regime used to fund the program.”

The conversation regarding the impact of sanctions is as surreal and even more politicized inside Iran. President Mahmoud Ahmadinejad, after years of describing sanctions as worthless pieces of torn paper but also a source of native talents’ great advancement, has suddenly found vested interest in identifying sanctions as the source of all the country’s economic woes.

It is not his fault and if you don’t believe him he is now more than willing to hand in his resignation letter, he tells a somewhat stunned audience of Iranian politicos, in a press conference last week. Just like that, with a shrug and annoying smirk, presumably assured that none of his political opponents has the energy to get too riled up about the wreckage he has made of the Iranian political and economic landscape.

Still, his conservative opponents do try to score a point by arguing otherwise. Iran’s presidential election is coming up in June 2013 and no one can afford to be associated with the policies of the past few years. These conservative opponents do not deny the impact of sanctions but see the source of the problem in Ahmadinejad’s populist and expansionary economic policies in the face of a tightening sanctions regime that he refused to take seriously and is now unable to address adequately because of the incompetence of his economic team. Their own complicity in the creation of this wreckage is of course a topic to be ignored.

Standing on top of this cantankerous conversation is Leader Ali Khamenei whose attempt to walk a tightrope in a series of speeches to various audiences in the North Khorasan Province last week was truly a spectacle. On one hand, he has been careful not to blame the sanctions too much. He is, after all, Iran’s “decider” and the person in charge of the “general direction of the country.” All along his talking point has been that Iran’s defying stance against external bullying is actually good for the country’s blossoming talent. Iran’s “resistant economy” is his brainchild.

In North Khorasan, Khamenei again reiterated his view that the sanctions regime is not about Iran’s nuclear program and is about Iran giving in to the dictates of US hegemony. The US “does not want Iran to come back to the negotiating table; it wants Iran to surrender to Western bullying during negotiation,” he said. Rightly or wrongly, it is this rather dark view of US intentions that prevents Khamenei from blaming sanctions. Iran’s defiant posture relies on the denial of the severe impact of the sanctions regime.

But Khamenei cannot go too far in blaming government policies and general incompetence for Iran’s current economic woes either. His continued support for the Ahmadinejad government is the only thing left between the latter and a testy and worried conservative political class ready to impeach the president for incompetence along with, as I mentioned above, the hope of ridding itself of the charge of complicity in bringing about Iran’s current economic problems.

In the mind of the influential conservative MP, Ahmad Tavakoli, “Ahamdinejad’s period is over and the continuation of his presidency is not positive” but a “consensus” regarding this issue has not yet developed. When asked whether this is due to the fact that some people — read Khamenei –  would like to keep the country calm in the 9 months that are left in Ahmadinejad’s presidency, Tavakoli answers in the affirmative and emphatically rejects rumors that Khamenei’s circumspection is because “Ahmadinejad and his team has threatened the Leadership.” He says that it can be accepted that at this time “tranquility is a value and losing it is considered a loss of value but the conclusion will not always be this.” In fact, Tavakoli goes on to make clear that he disagrees with Khamenei’s decision to tolerate Ahmadinejad until the end of his term for the sake of political tranquility.

There are others who seem to agree. Last week, over 100 MPs once again signed on to a question from the president regarding the currency situation. If Khamenei doesn’t put a stop to this process – and he probably will – Ahmadinejad will be hauled to the Parliament for a second time this year. Given the rule changes put in place after his last showing, if the Parliament is not satisfied with his answer, a vote will have to be taken regarding whether to lodge a complaint against him in the Judiciary.

The likelihood of this happening is low but I guess it is important to note that even if the Iranian economy is imploding and on the verge of collapse as some western officials claim, the politics of bickering continues to rule supreme even in Iran and is bound to get worse with the nearing of the election season despite Khamanei’s repeated calls for calm and not treating competitors as enemies.

I don’t know the answer to the question I’ve posted above, but today’s news may offer an indication:

The EU imposes new sanctions against Iran’s nuclear program and reaffirms its said commitment to reaching a peaceful, diplomatic solution:

…the objective of the EU remains to achieve a comprehensive, negotiated, long-term settlement, [...]]]> via Lobe Log

I don’t know the answer to the question I’ve posted above, but today’s news may offer an indication:

The EU imposes new sanctions against Iran’s nuclear program and reaffirms its said commitment to reaching a peaceful, diplomatic solution:

…the objective of the EU remains to achieve a comprehensive, negotiated, long-term settlement, which would build international confidence in the exclusively peaceful nature of the Iranian nuclear programme, while respecting Iran’s legitimate rights to the peaceful uses of nuclear energy in conformity with the NPT, and fully taking into account UN Security Council and IAEA Board of Governors’ Resolutions.

Israel nods approvingly but doesn’t rejoice:

[Benjamin] Netanyahu, speaking Tuesday at the start of a meeting in Jerusalem with European Union member state ambassadors, called the sanctions “tough” and said Iran was “the greatest threat to peace in our time.”

“These sanctions are hitting the Iranian economy hard, (but) they haven’t yet rolled back the Iranian program. We’ll know that they’re achieving their goal when the centrifuges stop spinning and when the Iranian nuclear program is rolled back,” he said.

As does the former EU and US terrorist-designated organization the Mujahadeen-e Khalq (aka MEK, NCRI, PMOI) while reaffirming its commitment to regime change in Iran:

Therefore, although comprehensive sanctions are an essential and indispensible element to stop the clerical regime’s nuclear weapons project, the ultimate and definitive solution for the world community to rid itself of the terrorist mullahs’ attempt to acquire nuclear weapons is a regime change by the Iranian people and Resistance. Thus, recognizing the Iranian people’s efforts to overthrow religious fascism and to establish democracy in Iran is more essential than ever.

Iran complains loudly while tooting its resistance regime horn and allegdly hitting back against cyber attacks waged against its nuclear program.

And all the while average Iranians (and terminally ill ones) continue to carry the brunt of the weight:

The measures come as Iran’s economy continues to reel in the wake of previous Western sanctions targeting the country’s crucial oil exports and access to international banking networks. Iranians are suffering economically amid inflation and the sharp devaluation of the Iranian currency against the dollar.

Shop owners in downtown Tehran said that prices had risen 50% since last month and that they were expecting things to only get worse.

Amir Mosayan, who sells watch batteries wholesale, said that immediately following the sanctions the price of his goods went up 70%.

 

The US and EU are touting Iran’s currency woes as proof that sanctions are working, though it’s not clear to what end. The Wall Street Journal reports that the Western powers “are working on new coordinated measures intended to accelerate the recent plunge of Iran’s currency and drain its foreign-exchange reserves”:

The first [...]]]> via Lobe Log

The US and EU are touting Iran’s currency woes as proof that sanctions are working, though it’s not clear to what end. The Wall Street Journal reports that the Western powers “are working on new coordinated measures intended to accelerate the recent plunge of Iran’s currency and drain its foreign-exchange reserves”:

The first salvos in this stepped-up sanctions campaign are expected at a meeting of EU foreign ministers on Oct. 15, including a ban on Iranian natural-gas exports and tighter restrictions on transactions with Tehran’s central bank, European officials said.

The U.S. and EU are also considering imposing a de facto trade embargo early next year by moving to block all export and import transactions through Iran’s banking system ….

To that end, U.S. lawmakers are drafting legislation that would require the White House to block all international dealings with Iran’s central bank, while also seeking to enforce a ban on all outside insuring of Iranian companies.

David Cohen, who coordinates the US’s Iran sanctions policy from within the Treasury, outlined the US’s stance in a speech before a British think tank. Reuters reports:

[David] Cohen, undersecretary for terrorism and financial intelligence, added in remarks on a visit to Britain’s Chatham House think-tank that Iran had the ability to “relieve the pressure its people are feeling” by resolving concerns over its nuclear work.

“What in particular has sparked the most recent precipitous decline in the rial, I’m not in a position to say on a granular basis,” he said, adding however that over the past year it had fallen substantially.

The Washington Post also reported that EU officials are “even more blunt” over the intentions behind the sanctions:

One senior European official said the goal of the tightened sanctions was to “bring the Iranian economy to its knees,” and to “make it in a way that really hurts the regime more than the population. That is very difficult.”

But US officials are also attempting to downplay the negative effects of the sanctions by blaming the regime. State Department spokeswoman Victoria Nuland said yesterday that “[t]he Iranian state has horribly mismanaged all aspects of their internal situation.” Cohen told the Chatham House audience that the unrest in Iran “is undoubtedly in significant part due to the Iranian government’s own mismanagement of its economy and it is in part due to the effect of sanctions. The Iranian leadership has within its capacity the ability to relieve the pressure its people are feeling.” Secretary of State Hillary Clinton offered the following qualifier:

“They have made their own government decisions– having nothing to do with the sanctions– that have had an impact on the economic conditions inside of the country,”" Mrs. Clinton said. “Of course, the sanctions have had an impact as well, but those could be remedied in short order if the Iranian government were willing to work with. . .the international community in a sincere manner.”