Graduation Ceremony: Military Service Academies

Iran’s Supreme Leader Ayatollah Khamenei reviewing the graduating cadets at the joint graduation ceremonies of Iran’s military (Artesh) service academies. Tehran. 10 November 2010.

Photo: ISNA/khamemei.ir

Ahmadinejad: No Negotiations Over “Nuclear Rights”

Iranian President Mahmoud Ahmadinejad said in Qazvin today that Iran will not enter into any negotiations with the major world powers over its “nuclear rights”.

Ahmadinejad said Iran was only willing to discuss “global issues” with the West as an equal partner.

“The West should sit down at the negotiating table with an equal status as us and based on mutual respect. Under such condition, Iran can hold talks on global issues," he said [IRNA, 10 November].

Ahmadinejad did not make it clear as to why Iran had accepted EU’s invitation to hold talks on the country’s nuclear program with the P5+1 if the “nuclear rights” issues, that presumably include uranium enrichment programs, are off the table.

New Dollar Checking Accounts

The Governor of Central Bank of Iran (CBI) Mahmoud Bahmani today encouraged the public to deposit their dollar holdings into the new foreign currency checking accounts that carries 4% interest. In the past few weeks, a significant number of people rushed to purchase dollars, fearing a devaluation of touman, local currency, and the rise in prices as the result of the removals of subsidies.

Defending touman in the past few weeks, the CBI has been injecting 1 billion dollars a week into the currency exchange markets in purchasing the local currency [ISNA, 8 November]. Continuing on that pace, the country would need to convert nearly all its oil revenue-generated hard currency into touman; hence the CBI’s latest attempt to bring back dollars held by the public into the country’s banking system.

Military Threat Against Iran Not Required - US

The US today rejected Israeli concerns that it was necessary to pursue a credible military threat against Iran, saying economic and financial sanctions could deter the country from building a nuclear weapon.

"I disagree that only a credible military threat can get Iran to take the action that it needs to end its nuclear weapons program," US Defense Secretary Robert Gates said [Reuters, 8 November]. "We are prepared to do what is necessary. But at this point we continue to believe that the political, economic approach that we are taking is in fact having an impact in Iran."

Israeli Prime Minister Benjamin Netanyahu had said on Sunday that a credible military threat was the only way to sway Iran.

Secretary Gates echoed comments by other senior US officials in recent days that tough new sanctions were “biting more deeply that Iran anticipated.”

Meanwhile, the IAEA chief Yukiya Amano told the UN General Assembly in New York that he couldn’t confirm that all aspects of Iran’s nuclear program are peaceful. He called on Iran to implement all resolutions of IAEA board of governors and UN Security Council, including demands to suspend uranium enrichment.

"Iran has not provided the necessary cooperation to permit the agency to confirm that all nuclear material in Iran is in peaceful activities," Amano said [AP, 8 November].

In New York, Iran’s Deputy UN Ambassador Eshagh Al Habib today angrily rejected IAEA chief’s assertions that Iran is not cooperating enough with the agency’s inspectors trying to verify whether it is seeking atomic weapons. He called Amano’s accusations “incorrect and misleading” [Reuters, 8 November].

“IAEA has reported so much details about Iran's peaceful nuclear activities proves that the agency has the full access to all nuclear materials in the Islamic Republic of Iran," Al Habib said. "It seems that the recent reports of the agency have been prepared under pressure from the outside." [Reuters, 8 November].

Al Habib reiterated Tehran’s intentions to resume talks with world’s major powers, the Group 5+1, to discuss its nuclear program.

Meanwhile in Ankara, the Turkish President Abdullah Gul said today he expected his country to host talks between Iran and the six major powers "sometime soon."

Azad University - Qazvin

The campus of Islamic Azad University in Qazvin. Azad (“Free”) University is Iran’s largest with over 1 million students and 350 campuses covering all major population centers in Iran, and campuses in foreign countries such as UK and UAE. Recently, the university has been the subject of a power struggle between its independent board of trustees and the Ahmadinejad administration. The government is trying to take over the private institution, but is facing stiff resistance from its board led by Ayatollah Hashemi Rafsanjani.

Iran: Talks with P5+1 in Turkey

Iran announced today that it has proposed Turkey as the venue for talks with the world powers over its nuclear program. Notwithstanding the venue, this is an official Iranian acceptance of the invitation by EU foreign policy chief Catherine Ashton to hold talks with P5+1. Ashton had originally proposed Vienna, where the IAEA headquarters are located, as the venue for talks.

"In the last two or three days, we informed our Turkish friends that we agree to hold negotiations in Turkey," Iran's Foreign Minister Manouchehr Mottaki told reporters in Tehran.

Turkey gave its approval on Sunday to host the talks [Anatolia News Agency, 7 November].

"Turkey has made lots of efforts since the start of the process for a diplomatic solution to be found," an unnamed Turkish official was quoted by Anatolia as saying. "We are ready to do whatever is in our power."

The nuclear talks between Iran and the six world powers -- Britain, China, France, Russia, Germany and the United States -- have been deadlocked since October 2009 when the two sides met in Geneva.

Subsidy Reforms, ctd

Iran’s Minister of Economy and Finance Shamsodin Hosseini announced in Tehran the government’s plan on redistribution of the monies saved as the result of the gradual removal of the government subsidies of the essential goods and services. In the most detailed account offered so far by the government, Hossieni said 50% of the savings will be redistributed directly to the people (which includes monthly cash handouts), 30% will be used to boost the invesments in agriculture and industry, and 20% will be allocated to the government for its general budget [Kayhan, 6 November].

If indeed 80% of all the savings generated by the subsidy reforms are allocated to non-productive sectors, away from the long-term investment and development projects, then disater is already written all over these “reforms.” Injecting back the cash directly into the economy to boost the public consumptions and the government’s general budget would not lead to job-creating investment projects, and would raise the inflation rate to the levels not seen since the end of the eight-year war with iraq.

To read the Kayhan article, click here.

Anniversary of US Embassy Takeover

Above photo showing pro-government demonstrators on Thursday in Tehran marking the 31^st anniversary of the takeover of the US Embassy and taking US diplomats and Embassy staff hostage for 444 days. The crowd displays the slogan of “Death to America.”

Uskowi: The mere “celebration” of the darkest days in the Iranian diplomacy shows the government’s continued pride in the unlawful acts of taking the accredited diplomats hostage. The Islamic Republic could have easily ended the “independent” act of the Students Following the Imam’s Line by expelling the “students” from the Embassy and freeing the hostages within hours of the Embassy takeover. Yet it saw if fit to become a hostage taker itself and keep the hostages for 444 days. The decision was the first of many foreign policy initiatives by the Islamic Republic against the norms of international behavior, which eventually worked against the national interests of Iran.

This blogger was publishing Neday-e Azadi, a daily newspaper in the first year of the new Islamic Republic. A newly created revolutionary “court” ordered our paper closed, along with other independent publications, days prior to the embassy takeover. It was not clear to us if the closing of the independent papers was a pre-emptive act to silence opposition to the takeover. But at a minimum it was the beginning of a calculated push by the rightist and fundamentalist elements within the new republic to get away with the non-conformists, ending in the embassy takeover and the fall of the Bazargan government.

In the next 31 years, the circles of non-conformists, as defined by the rightists and fundamentalists, grew larger by the year, highlighting in designation of Mir Hossein Mousavi, the wartime prime minister of the Islamic Republic, as an anti-revolutionary and anti-Islamic Republic agent. And such is the power and ruthlessness of the right, which on that fateful day on 3 November 1979 led to the hostage crisis.

Photo: By Amir Pormand, ISNA. Tehran, 3 November 2010

Rising Prices

The Central Bank of Iran (CBI) announced on Thursday that the inflation rate for the twelve-month period ending 21 October 2010 was at 9.2 percent. CBI’s official monthly inflation reports show a steady rise in prices in recent months after the drop in inflation rate in the earlier parts of the year. The rise in prices is thought to be linked to the recent announcements that the gradual removal of government subsidies of the essential goods and services will begin by mid-November.

The annualized inflation rates for the twelve-month periods at the end of each Iranian calendar month are as follow:

• 21 Oct: 9.2%
• 21 Sep: 8.9%
• 21 Aug: 8.8%
• 21 Jul: 9.1%
• 21 Jun: 9.4%
• 21 May: 9.9%

No independent confirmations of CBI numbers were available.

Removing Subsidies: Political Risks and Rewards

By Nader Uskowi

President Ahmadinejad’s plan of the five-year phase out of government subsidies of essential consumer goods and services, including gasoline, water and power, transportation and food products, carries with it significant political risks as well as huge rewards. On the risk side, just the announcement that subsidies of gasoline will begin to be phased out has already caused a rapid rise in prices across the board, especially in major cities.

To assuage the concerns of citizens over their shrinking purchasing power, the government has started handing out $40 per month to 80% of all Iranian citizens. Ironically, the monthly payouts could themselves stir up further rise in prices, a self-destructive short-term solution to a long-term problem. But if Ahmadinejad could pull this off, eliminating most of the subsidies within the next year or two, without inciting pressure from the public and rival politicians to end the program, he could start an economic boom that can politically reward him and his close associates, some of whom might have aspiration to run for president in 2013, say Eskandar Rahim Mashaie. Ahmadinejad himself, serving two consecutive terms by then, is barred from running and needs to wait it out until 2017 (but an Ahmadinejad-Mashaie-Ahmadinejad sounds too Russian!)

If Ahmadinejad’s first term was marked by uranium enrichment and later marred by the Green movement, his second term will be defined by the success or failure of his subsidy reforms. Preliminary signs paint a rough road ahead. But he can succeed if he sticks to the program and do not back out under popular pressure until the economic benefits of the reform start a boom in the economy. No Iranian governments could afford to finance so many subsidies, but no Iranian governments had the political will to tackle the monumental problem created in the past five decades, and growing worse every year. That’s why the success of the program would be translated into huge political rewards for the government doing it.

During the first year of the reforms, subsidies of utilities, rice, wheat, cooking oil, sugar, milk, mail, air and rail services will begin to be phased out. The government estimates a saving of $40 billion as the result of the first phase of the reforms. If the saving is invested in economically sound projects, an economic boom will follow. If it is spent on cash handouts and projects more suitable to political propaganda, the reforms will fail miserably. The choice would define the seriousness of the government to succeed. After all, when the reforms start, they will result in majestic success or majestic failure, depending on how they are handled.

Ahmadinejad Calls for Revaluation of Touman

Iranian President Mahmoud Ahmadinejd has directed the country’s Central Bank to revaluate the currency.

“I have asked the Central Bank to fix the exchange rate closer to its real value. Considering the level of our foreign exchange reserves, I believe the real exchange rate (to dollar) is much lower than their (Central Bank’s) 1,600 toumans per dollar rate,” said Ahmadinejad [Mehr News Agency, 30 October].

The Iranian president had earlier announced that his country’s foreign exchange reserves were in excess of $100 billion.

Ahmadinejad: Sanctions Have Failed

Iranian President Mahmoud Ahmadinejad said in Tehran on Saturday that UN, US and EU sanctions against his country have been the “most ridiculous and failed” move adopted by the world powers.

"Imposing sanctions on Iran was the most ridiculous political decision ever. It was a failed thing from the beginning," Ahmadinejad said [IRIB, 30 October].

"What do you want to sanction? Energy. We are energy producers. We have the second largest reserves of energy products in the world," Ahmadinejad added.

Iran's Commerce Minister Mehdi Ghazanfari also reiterated Ahmadinejad’s take on the sanctions, calling them “ineffective,” [IRNA, 30 October].

However, the president of the Iranian Chamber of Commerce had said earlier that the sanctions had begun to take a toll.

"Sanctions can't halt the importation of goods into Iran but estimates indicate that the cost of imports has increased between 15 to 30 percent,” said Mohammad Nahavandian, the Chamber president [ISNA, 27 October].

On Saturday, Ahmadinejad also said that Iran’s foreign exchange reserves exceed $100 billion.

"The country's foreign exchange reserves have been estimated at $100 billion, but it's definitely more than this figure," said Ahmadinejad [IRNA, 30 October].

Iran's Central Bank Governor Mahmoud Bahmani said Tehran has boosted its reserves by buying “hundreds of tons” of gold at a price that has since doubled [IRNA, 30 October].

Iran to Sue Europe Oil Firms Over Refusal to Refuel

Iran is suing oil companies in The Hague for refusing to refuel its Europe-bound flights, a top Iranian aviation official said today.

“Iran is taking legal measures and the issue has been raised in The Hague tribunal and lawyers have been appointed to pursue the issue,” said Farhad Parvaresh, the CEO of Iran Air [AFP, 30 October].

The ban on refueling includes airports in London, Amsterdam, Stockholm and several German airports. Iran Air flights from Europe now are making stopover at Vienna where Austrian oil firm OMV still refuels its planes.

Iran to Attend P5+1 Nuclear Talks

Iran has accepted the invitation by European Union foreign policy chief Catherine Ashton to attend the P5+1 talks on its nuclear program. The talks are expected to be held in Vienna in mid-November [Press TV, 29 October]. In the past two weeks, senior Iranian officials had sent confusing and often contradictory signals on Iran’s intentions to attend the talks, some wanting preconditions for the talks. Today’s announcement by Iran’s Supreme National Security Council did not contain any preconditions.

Iran & Iraq: The Search for the Missing

Iran and Iraq have held talks on the fate of soldiers and civilians still missing since the end of their eight-year war in 1989. The International Committee of the Red Cross (ICRC) will support the efforts to expedite the long-stalled search for the missing from both sides.

"Over 20 years have passed since the war ended, and tens of thousands of Iranian and Iraqi families still do not know what happened to their missing loved ones," Eric Marclay, ICRC’s deputy chief of operations for the Middle East, said on Thursday [AFP, 28 October].

"We very much welcome the progress achieved, and the commitment and determination of the authorities on both sides," Marclay added.

Nearly a million people were killed in the war, with thousands soldiers and civilians still missing. The two countries insist that they no longer have prisoners of war.

Iran-Iraq War: Press TV file photo

Iran Cracking Down on Journalists “Remorselessly” - RWB

Reporters Without Border (RWB), the international NGO that advocates freedom of press, today warned that Iran is cracking down on journalists “remorselessly.” In the past two weeks alone, a journalist was arrested for the second time in a year and two women journalists whose journalist husbands are already in jail received jail sentences.

In its annual press freedom report released on 22 October, RWB had ranked Iran 175^th out of 178 countries. Some of the journalists arrested recently:

• Mohammad Reza Moghisseh, editor of Bist Saleha. He was arrested on 22 October for the second time in a year. In October 2009, he was arrested and spent 150 days in solitary confinement in Tehran’s notorious Evin prison.
• Jila Bani Yaghoob, a blogger and reporter, was sentenced to one year in prison on 22 October by Tehran revolutionary court and banned from journalism for 30 years. Her husband, Bahman Ahmadi Amoee, in detention since June 2009, has been given a five-year jail sentence. Amoee’s blog, We are Journalists, won “Best of the Blogs” prize given by Deutsche Welle last April.
• Mahssa Amrabadi, another women journalist, was sentenced to a year in prison by Tehran revolutionary court on 14 October. Her husband, Masoud Bastani, has been in prison since July 2009. He was arrested and tried along many other journalists in the Stalinist-style mass trials of August 2009.

For viewing today’s RWB report, visit here.

EU to Allow Import/Export of Iran Oil & Gas

The European Union on Wednesday issued regulations covering Iran sanctions that allow for the import and export of oil and gas to Iran. Although the regulations are tougher than the UN sanctions, but the sections dealing with oil and gas leaves an opening for Iran to offset the effects of sanctions imposed by the US against the Iranian oil and gas industry.

"If you want to send a tanker filled with refined petrol to Iran, and you have proved that you are not carrying any other goods that we deem illegal, Europe has no problem," said a European official [Washington Post, 28 October 2010]. "We don't want any negative effect on the Iranian population or to deprive them of energy, so we do not follow US measures that go beyond United Nations sanctions."

The EU will also permit financial transactions needed to import of oil and gas to Iran. The US does not.

The practical effect of the EU action might be minimal because European oil companies might still refuse to supply Iran with fuel for fear of appearing to thwart US sanctions, said the Washington Post.

"We have complained to the U.S. about the extraterritorial effects of their measures on European companies," the European official told the Post. "If those companies submit to U.S. wishes, it is their decision, but we are against these policies. This is a major issue for us."

US officials said Wednesday that they were broadly pleased with the European regulations, which they said could devastate Iran's oil and gas industry by sanctions against investments.

"We are going at the supply, while they are going at the back end," said a senior administration official [Washington Post, 28 October].

US Sanctions Against Iran Shipping Companies

The US Department of the Treasury announced on Wednesday the designation of 37 front companies based in Germany, Malta, and Cyprus for being owned or controlled by, or acting on behalf of, the Islamic Republic of Iran Shipping Lines (IRISL) and its affiliates. The Treasury also sanctioned five Iranian individuals who were managing these companies. The designation would practically prevent the companies to process banking transactions or obtaining liability insurance needed to run their operations.

- Fifteen shipping companies, each the registered owner of a vessel already on US Treasury’s List of Specially Designated Nationals and Blocked Persons (SDN List), as blocked property of IRISL, and 15 holding companies that own the shipping companies. All of the holding companies and shipping companies are based at the same address in Hamburg, Germany.

- Six companies are based at the same address in Malta, and one in Cyprus.

- The five Iranian individuals sanctioned:

• Mohamad Talai, manager of the 11 Hamburg-based holding companies and an authorized representative of IRISL Europe.
• Mansour Eslami, co-manager of several of the Hamburg-based holding companies and also a director of IRISL, Maltta.
• Ahmad Sarkandi, the director of all IRISL front companies in Malta and director of IRISL UK, He also manages Lancelin Shipping, a Cyprus-based IRISL company.
• Ghasem Nabipour, the Managing Director and a principal shareholder of Soroush Sarzamin Asatir Ship Management Company.
• Naser Bateni, the managing director for HTTS Hanseatic Trade Trust and Shipping GmbH, and IRISL Europe GmbH.

For a complete list of the individuals and entities designated by US Treasury, visit here.

What an "isolated" Iran looks like

by Amir Taheri

Two weeks ago we saw the Iraqi Prime Minister Maleki heading to Iran to seek its support for a new government. The press has reported that he was rewarded after months of behind the scenes discussions with Al Sadr and Iran. Last week we saw Ahmadinejad with cheering crowds in Lebanon. Then we saw "brothers" one from as far as South America Hugo Chavez hugging the Iranian President in Tehran. Chavez took the 3 days to give the West a big fat 11 finger wave (11 agreements signed mostly in oil, gas, and petrochemical in the areas that Europe and the US promised to sanction any country that invested in Iran). It almost seemed like there is just too much going on in Tehran these days as the Prime minister of Armenia and the president of Bolivia both arrived in Tehran on the same day. Iran's Vice president picked up the Armenian guest and Ahmadinejad made the courtesy to meet the head of state traveling the farthest, President Evo Morales of Bolivia. In between these state visits, Ahmadinejad squeezed in two phone calls with the Saudi King. Apart from the great photos and opportunity to show publicly Iran's regional power, these two conversations with the Saudi King are what probably was the most important thing that has happened in the last couple of weeks. The Israeli newspaper Haaretz is reporting that these calls have been about coming to an understanding between the two countries on how to split their spheres of influence in Iraq and Lebanon. As it seems that both in Lebanon and Iraq, Iran's star is rising and Saudi Arabia's millions invested have had no returns, Saudi Arabia is coming to the realization that it is better to come to an agreement with Iran before losing completely all influence in these two countries.

It seems though that something surprising happened. Europe and the US have been pushing Saudi Arabia for the last 2-3 years to pull Syria away from its alliance with Iran. Countless promises have been made by both the European, US, and recently the Saudis for billions in investments opportunities and to bring Syria into the "civilized world" of nations if it complies. As these have all been rejected by Syria, the surprising thing that is still playing out before our eyes is that it seems with Ahmadinajad's picking up a phone and calling the Saudi's last week the Iranians have been able to turn the tables on the West. The kingdom of Saudi Arabia has seen the cards that have been played in Lebanon and Iraq and with President Assad meeting the Saudi King in Riyadh two weeks ago, what might have been happening then was the Syrians pushing the Saudi's into an agreement with Iran instead. This doesn't mean that we will see an alliance between Iran and Saudi Arabia happening any time soon but it is for sure signs of improvement in relations ahead. The words of a Saudi recently interviewed by Al Jazeera seem almost foretelling of the future "Iran is not the enemy, Israel is the enemy," the head of the Center for Strategic Studies in Saudi Arabia declared in an interview with Al Jazeera. An American spokesman recently claimed Iran is becoming more and more isolated day after day. Iran isolated? Ask the Iraqis, Venezualians, Armenians, Lebenones, Bolivians, Saudis, and Syrians what they think after only the last two weeks.

Reference

Bushehr to Go Online by January

Iran began loading fuel into the reactor core of Bushehr nuclear power plant on Tuesday. The plant’s construction started during the shah’s regime in 1970s. Now after nearly four decades of delays, the facility is expected to generate electricity by January.

Photo: Bushehr nuclear power plant; AFP file photo

Electricity Price Increase

The Iranian government’s working group on subsidy reforms has decided to increase the price of electricity from 160 rials/kWh to 400 rials/kWh, a 250% increase in price [ISNA, 25 October].

ISNA also reports that 110 rials/kWh of the new price, or 28% of revenues generated by the sale of the electricity, will be funneled to the Targeted Subsidy Fund. The Fund was created to offset the effect of subsidy reforms and the rapid rise in consumer prices on poor families.