The Latest from Iran (5 April): How Serious Are the Economic Problems?

See also Iran Feature: The Week in Civil Society --- From Nature's Day to A Site for Repression
Iran Feature: The Disappearing Interview with a US Official
The Latest from Iran (4 April): Admitting the Economic Tensions

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1522 GMT: Rafsanjani Watch. Juan Cole, drawing from US Open Source monitoring, has published English extracts of the article by former President Hashemi Rafsanjani that has raised the political temperature in Tehran --- on relations with the US:

After all, our current practice — of not speaking to or having ties with America — could not persist forever. America is the super power of the world. What is the difference between Europe and the US, China and the US, or Russia and the US from our point of view? Why should we not negotiate with the US if we negotiate with them? Talks do not mean that we should surrender to them. We will negotiate and if they accept our positions or we accept their positions, then it would be all over.

On relations with Saudi Arabia:

Having relations with Saudi Arabia is not a minor issue for the region. First of all, it is a wealthy country and the majority of the scholars from Muslim countries have ties with Saudi Arabia first and foremost considering the hajj and pilgrimages and second because of their own interests. It (Saudi Arabia) renovates their (Muslim countries) mosques, provides facilities, prints Korans and has provided numerous facilities for spread of their religious issues. Most of the works Al-Azhar University has done in Egypt, even the academic works, are now in the hands of Saudi Arabia.

More important is the issue of oil. Would the West impose sanctions on us, if Saudi Arabia had good ties with us? Only Saudi Arabia could take Iran’s place. Saudi Arabia does not need to do anything. If it produces oil according to OPEC (Organization of Petroleum Exporting Countries) limits, no one could harass us. As the world economy could not carry on without our oil, I believe that it is still possible to establish good relations. However, there are people here who, as you see, do not want that. You are an expert in international relations and foreign policy and know well that if they say one word without thinking, it would immediately be reflected. Some harsh words from both sides should not be tolerated and should be corrected.

On Iran's nuclear programme:

We really do not seek to build nuclear weapons and a nuclear military system. In a Friday prayer sermon in Tehran, I even once said that an atomic bomb would not benefit the occupation regime of Israel. Eventually, if one day a nuclear conflict takes place, Israel as a small country, will not be able to bear an atomic bomb. It is a small country and all its facilities would be destroyed. However, they interpreted this advice as a threat. We really believe that there should not be any nuclear weapon in the region and this is a part of the principles of our politics.

1424 GMT: A Muddle Over Imports. Earlier this week Iranian authorities announced a temporary ban on 6000 imports and pricing at the open-market rate, rather than the official rate with a far stronger Iranian currency, for other imports.

Now, in an apparent attempt to safeguard vital sectors dependent on imported components, the regime has said it will provide foreign currency at the official rate for around half of all goods imported into Iran this year.

State news agency IRNA say more than $30 billion would be made available at the official rate.

"On average, of the total imports into the country, around half consist of raw materials, automobile spare parts, intermediary machinery and the like," said Kiomars Fathollah Kermanshahi, deputy director of the state-run Trade Promotion Organisation.

1412 GMT: Parliament v. President. Speaker of Parliament Ali Larijani has maintained his challenge to the Ahmadinejad Government, telling a press conference that the second phase of subsidy cuts is not possible without the approval of the Majlis.

The subsidy cuts issue has become a focal point of Parliamentary opposition to Ahmadinejad's plans, with leading MPs claiming that the second phase, announced in Decmeber 2011 but yet to be implemented, is illegal.

1302 GMT: Elections Watch. The Guardian Council has suspended the results of the Parliamentary elections, held on 2 March, in Ramsar and Damavand in northern Iran.

1252 GMT: Nuclear Watch. The confusion from Iran over the venue for the nuclear talks with the 5+1 Powers, set for 13 April, continues....

According to the reformist Etemaad newspaper, Alaeddin Boroujerdi, the head of Parliament's National Security Committee, declared, "Iranian officials are not interested in Turkey as the host."

Boroujerdi supported Baghdad as the site for the talks.

Iranian officials, including the Foreign Minister, had said that the discussions would be in Istanbul, but that declaration has been pulled back by the regime this week.

1132 GMT: Oil Watch. Iran has terminated oil sales to two major Greek firms, Hellenic Petroleum and Motor Oil Hellas, claiming they failed to pay for supplies.

It is more likely, however, that the move is a symbolic gesture --- a senior official at Hellenic Petroleum said Tuesday that the refiner had suspended purchases because sanctions imposed by the United States and the European Union prevented the financing of the imports.

Greece had taken about 25% of its oil from Iran.

0912 GMT: Rafsanjani Watch. Keyhan editor Hossein Shariatmadari and --- more significantly --- Ali Saeedi, the Supreme Leader's representative, have attacked former President Hashemi Rafsanjani for his invocation of Imam Khomeini to call for better relations with the US.

Saeedi chided, "Don't enter subjects that please the enemy."

0910 GMT: Economy Watch. The head of Iran's Poultry Association says that 30% of the country's chicken farms have been shut down and the rest "face the same fate" if there is no Government support and imports continue.

0900 GMT: Spin of the Day. US officials, using The New York Times, piles pressure on the Iranian regime just before the nuclear talks (or even anticipating that they may not take place):

Just hours after it was revealed that American soldiers had burned Korans seized at an Afghan detention center in late February, Iran secretly ordered its agents operating inside Afghanistan to exploit the anticipated public outrage by trying to instigate violent protests in the capital, Kabul, and across the western part of the country, according to American officials.

For the most part, the efforts by Iranian agents and local surrogates failed to provoke widespread or lasting unrest, the officials said. Yet with NATO governments preparing for the possibility of retaliation by Iran in the event of an Israeli attack on its nuclear facilities, the issue of Iran’s willingness and ability to foment violence in Afghanistan and elsewhere has taken on added urgency.

With Iran’s motives and operational intentions a subject of intense interest, American officials have closely studied the episodes. A mixed picture of Iranian capabilities has emerged, according to interviews with more than a dozen government officials, most of whom discussed the risks on the condition of anonymity because their comments were based on intelligence reports.

One United States government official described the Iranian Embassy in Kabul as having “a very active” program of anti-American provocation, but it is not clear whether Iran deliberately chose to limit its efforts after the Koran burning or was unable to carry out operations that would have caused more significant harm.

0715 GMT: Sanctions Watch. Leading ship insurer China P&I Club will halt indemnity coverage for tankers carrying Iranian oil from July.

The China P&I Club, whose members include major Chinese shipping firms Sinotrans and COSCO Group, is the first Chinese maritime insurer to confirm it will halt business with tankers operating in Iran, following similar action in Japan. This is the first sign that refiners in China, Iran's top crude buyer, may struggle to obtain shipping and insurance.

South Korea's Hyundai Motor Company has repoortedly ended its business dealings with Iran, where it had extensive operations, including a joint venture to make cars.

United Against Nuclear Iran, an American group that has advocated economic sanctions to pressure Iran over its disputed nuclear program, has reclassified Hyundai Motor, putting it in the “withdrawn” category on a list the group has compiled of foreign businesses that deal with Iran.

Last week, General Motors said its French partner, PSA Peugeot Citroën, had suspended shipments of components to the Iran Khodro Industrial Group.

0625 GMT: Economy Watch. Etedaal posts details on how the Government "emptied foreign exchange reserves" from 2005 to 2009.

All 200 workers of the Saba Nour Steel Raw Material Supply Company in Qorveh in northwestern Iran have reportedly been dismissed after production was halted because of a lack of raw materials.

0620 GMT: Subsidy Cuts Watch. MP Abbasali Noura has declared that the Government has no money to pay the additional 28,000 Toman (about $23 at official rate; $15 at open-market rate) in monthly support payments for subsidy cuts, announced last month.

The Government has asked wealthier Iranians not to claim the extra payment, although they can continue to receive the initial 45,000 Toman monthly payment.

0615 GMT: Picture of the Day. Journalist Ahmad Zeidabadi, who is serving a six-year sentence, with his sister as he was released on furlough for Iranian New Year. He returned to prison earlier this week:

0605 GMT: Foreign Affairs (Turkish Front). On Wednesday we featured Tehran's manoeuvring over the forthcoming nuclear talks with the US and other powers, noting its apparent pullback from Istanbul as the venue.

It is far from surprising that one casualty of the tactics may be Iranian-Turkish relations. To add to the tension, Speaker of Parliament Ali Larijani denounced Ankara for staging last weekend's "Friends of Syria" conference.

"We summoned Iranian envoy today to demand an explanation on the remarks," Turkish Foreign Minister Ahmet Davutoglu told a press conference, without specifically naming Larijani. He also said he had contacted Iranian Foreign Minister Ali Akbar Salehi on Tuesday to express Ankara's dismay at the comments that "obviously contradicted the deep-rooted relations" between the two countries.

Salehi said the comments did not reflect official Iranian foreign policy, Davutoglu told reporters, noting that Prime Minister Recep Tayyip Erdogan met Iranian President Mahmoud Ahmadinejad last week in Tehran for talks held "in respect and mutual understanding".

Whether that is enough to put away the episode is debatable. Alaeddin Borujerdi, the head of the Iranian Parliament's National Security Committee said on State TV, "Taking into account the extremist and illogical position of Turkey on Syria and the recent conference on Syria, Turkey has de facto lost any competence to host the [nuclear] meeting."

0535 GMT: We begin today with a couple of nuggets from a snapshot, by Ali Chenar of Tehran Bureau, of the economic situation in Tehran. Here, for example, is an extract on the regime's efforts to control news of its currency and import difficulties:

Last month, when Baztab posted detailed information about Iranian-Chinese commercial links and arrangements, it was filtered immediately. According to the article, Iran has been depositing its oil revenues in China to be used for the purchase and importation of Chinese products and services. The accounts are run and managed by the Chinese government, which accepts no responsibility for any losses caused by market fluctuations. Furthermore, it charges a 4 percent insurance fee on its exports to Iran. Estimating the amount involved at more than $25 billion, Baztab called the arrangement "a capitulation."

In less than 48 hours, the website permanently withdrew the controversial report. The government makes little secret of its efforts to manipulate data and other information to present a less bleak picture of economic conditions. However, Iranian consumers hardly need accurate CBI reports to see what is going on.

Chenar also posts this telling claim:

The economic conditions frustrate Alireza, a 31-year-old engineer and father of a four-year-old girl. He shares his experience. "Before Nowruz, I received a text message asking me not to accept subsidies." Several thousand Iranians received such text messages, which usually read, "Dear Sir, given your financial strength, please refer to , the portal for the Subsidy Policy Reform Organization, to stop receiving subsidies.