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Spotlight on Iran Update, December 27,2010

News on Iran for the week of December 16-23, 2010.

Hightlights of the Week

  • Ahmadinejad’s economic revolution: implementation of subsidy policy reform begins

  • Geneva talks revive debate over recent years’ performance of nuclear negotiators

  • Uproar over foreign minister Mottaki’s sacking continues

  • Iranians celebrate Yalda winter solstice amidst concerns over price increases

  • Pictures of the week: Emir of Qatar visits Iran


Ahmadinejad’s economic revolution: implementation of subsidy policy reform begins

Sunday, December 19, marked the beginning of the key phase of the subsidy policy reform: the elimination of subsidies on energy products and the increase of prices. The start of the reform’s implementation had been announced by President Ahmadinejad on the previous day in a live interview given to Iranian TV. The president said that, as the subsidies are eliminated, Iranians will be able to withdraw the 81 thousand-toman (about 80 dollars) cash benefits deposited in their bank accounts in the past several months.


Ahmadinejad noted that Iranians should not be in a hurry to withdraw the funds, calling on them to cooperate in the reform’s implementation and avoid stocking fuel and other products. The Iranian people should put the cash benefits to good use, the president said, and avoid spending all the money at once. He called on the people to have faith in the government and pay no attention to the rumors circulated by Iran’s enemies against the program in an attempt to hold back the country’s economic progress.

The president announced that the government intended to double the cash benefits given to Iranians in the next phases of the reform program, expected to be implemented during the next Iranian year. Ahmadinejad further announced that an additional 4,000 tomans per month will be deposited in Iranians’ bank accounts in the coming week as compensation for the expected increase in bread prices. Ahmadinejad once again stressed the significance of the reform, saying it was aimed to streamline Iran’s energy consumption, conserve energy resources, make better and more efficient use of state oil revenues, and allow a more equal distribution of state revenues for the benefit of all citizens. According to Ahmadinejad, the expected revenues from the reform will make it possible for the government to infuse more funds to improve the people’s welfare and promote construction and development projects in the spheres of agriculture, industry, public transportation, and national infrastructure. He said that the weaker sectors of society will benefit the most from the reform (various news agencies, December 18).

Shortly after the president’s announcement, the Subsidy Policy Reform Headquarters issued two public announcements detailing the price increases of all kinds of fuel, all kinds of oil, all kinds of gas, and electricity. The price of subsidized fuel (limited to 60 liters per month per private vehicle) has been raised from 100 tomans (about 10 cents) per liter to 400 tomans. The price of non-subsidized fuel has been raised to 700 tomans. The price of cooking gas has been raised from 13 tomans per cubic meter to 70 tomans. The price of electricity has been raised from 16 tomans per kWh to an average of 45 tomans per kWh. The price of water has been raised from 80 tomans per cubic meter to 283 tomans per cubic meter. The prices vary by region. As a result of the increase in fuel prices, public transportation tickets and airline tickets are expected to increase by tens of percents on average.

Shortly after the president’s announcement, Kalemeh, a website affiliated with the supporters of the reformist opposition, reported that citizens were gathering at gas stations and that internal security forces had increased their presence in various areas of Tehran, particularly near gas stations (Kalemeh, December 18). Mohammad Reza Qazvin, the spokesman of the Headquarters of Economic Transformation, denied the reports (Fars, December 19).

ISNA News Agency reported this week that following the increase in gas prices, gas consumption in Iran dropped by 16.5 percent. On December 19, 2.4 million liters of gas were consumed in the country, 800 thousand liters less than on December 18. The chairman of the gas stations owners association said that in the first two days after the beginning of the reform’s implementation, gas sales had dropped by 15 to 18 percent (ISNA, December 20).


Earlier this week, Mehr News Agency reported long lines at bank branches across Iran. Many Iranians came to their banks to use the ATM machines to withdraw the cash benefits deposited in their accounts. The news agency stressed, however, that despite the long lines, no particular problems arose at the bank branches (Mehr, December 19). Despite the report, Economy Minister Shamsodin Hosseini said that on the first day of the reform’s implementation, Iranians had only withdrawn 0.5 percent of the cash benefits deposited in their accounts. He noted that this proved that the people carried on with their normal lives and were not in a hurry to withdraw the funds (Mehr, December 20).

The conservative press welcomed the launch of the reform. In its editorial, the daily Ebtekar congratulated the government for the reform and the transparency it had exercised in its implementation. In recent years, the president has proven that he puts the media to good use to inform the public about the reform, the article says. The daily called on the government to continue informing the public about the reform to ensure its continued trust in the government as the reform moves forward (Ebtekar, December 19).

The daily Jomhuri-ye Eslami also expressed support for the reform and for the manner of its implementation. The quiet on the streets and in the economic centers, such as banks and gas stations, indicates that the Iranian public is capable of dealing with the price increase or at the very least adapting itself to the new reality, says an editorial published by the daily. Jomhuri-ye Eslami called on the government to use the expected revenues from the reform to strengthen the productive sector and increase economic growth to lower the unemployment rate (Jomhuri-ye Eslami, December 20).

The reformist daily Mardom Salari, on the other hand, expressed concern over the inflationary pressure caused by the reform. The announcement on the beginning of the reform’s implementation came as no surprise, says an article published by the daily, and the need for its implementation is a well-known fact. The several-hundred-percent increase in prices, however, has Iranians concerned, considering the fact that the implementation of the program is supposed to continue gradually over five years. The daily warned about the dramatic increase in prices and its impact on Iran’s economy. While it is impossible to completely avoid the inflationary pressure caused by the reform, Mardom Salari said, the government must take the necessary measures to reduce it. Such a sharp, sudden increase in prices requires the citizens to withdraw the cash benefits from their bank accounts and make immediate use of the money to purchase the products whose prices have increased. This may lead, according to the daily, to an increase in inflation. The government acted bravely to implement the reform; however, it must take the necessary measures to keep its negative consequences to a minimum, the newspaper concluded (Mardom Salari, December 20).

Meanwhile, Fariborz Rais Dana, an economist and member of the Iranian Writers Association, was arrested earlier this week in Tehran. The internal security forces arrested Rais Dana at his residence shortly after an interview he had given to the BBC in Persian, in which he strongly criticized the reform and said that it would exacerbate the difficulties facing Iranians. Saham News, a website affiliated with opposition leader Mehdi Karoubi, claimed that the economist’s arrest was aimed to deliver a threatening message to the opponents of the reform and stop them from criticizing the program and its implementation. The website also reported that the authorities had recently prevented the publication of the results of studies conducted by Iranian universities about the reform and its consequences (Saham News, December 19).

Geneva talks revive debate over recent years’ performance of nuclear negotiators

A commentary article which spoke in favor of the Iranian negotiating team in the nuclear talks held earlier this month in Geneva provoked strong reactions from those close to Iran’s former chief negotiator, Hassan Rouhani.

Earlier this week, the conservative daily Javan published an article titled “Jalili has restored the dignity of Sa’dabad in Geneva” (referring to talks held in Tehran’s Sa’dabad palace in 2003 in which Iran announced it was willing to sign the Additional Protocol of the Non-Proliferation Treaty and suspend uranium enrichment). The article strongly criticized the performance of the negotiating team on the nuclear program held during former president Mohammad Khatami’s government.

The daily claimed that, in the talks held in Geneva in early December, the West had been forced for the first time to recognize Iran’s right for peaceful nuclear technology. The recognition is Iran’s greatest achievement, and it was made possible thanks to the policy of the current government. The success of the negotiators in Geneva, however, begs the question why the West refused to recognize Iran’s rights before, and how did the nuclear program, which proceeds in accordance with international law, became a tool for the West to exert pressure on the Iranian people. According to Javan, the answer lies in the policy followed by President Khatami’s reform government. Back then, it was the reformist diplomats who conducted the negotiations with the West, which resulted in the shut-down of Iran’s nuclear facilities and the suspension of all nuclear activity for years. The suspension led to a delay in the process of Iran’s nuclearization. Western negotiators, who had obtained intelligence information on members of the Iranian negotiating team, managed to control them and force them to accept Western demands. Britain’s former PM Tony Blair admitted himself, according to the daily, that the European negotiators had no concerns whatsoever about the negotiations with Iran, and that they had submitted the demands formulated by the West to the approval of the Iranian negotiators before the talks even started.

Mistaken analysis coupled with lack of vision and insufficient information on the position of Europe and the U.S. and on Iran’s internal capabilities prompted the West to toughen its stance on the nuclear program. At that time, not only did no centrifuge spin at the nuclear facilities, but the West went as far as to demand the complete halt of all nuclear activities, including those completely unrelated to uranium enrichment. It was only well into the reformist government’s term, when the Supreme Leader intervened and gave an explicit order to resume nuclear activities, that the “nuclear train” started moving once again. The West did not agree, however, to let a new member join the nuclear club, and imposed sanctions on Iran. In light of the sanctions’ failure, the West was now forced to come to terms with a reality where Iran is a nuclear power. Iran is now the side that calls the shots, and the West has to accept its terms. Comparison of Iran’s current situation, where it enriches uranium to 20 percent and sets the agenda for the talks with the world powers, to its situation until several years ago clearly shows the significance of the victory achieved by Iran (Javan, December 18).

In response to the article, the Center for Strategic Research (CSR), affiliated with Hassan Rouhani, former chairman of the Supreme National Security Council and chief nuclear negotiator, issued a memorandum of opinion strongly contesting the claims made by Javan.

The previous negotiating teams were appointed by top regime officials and followed their instructions for the good of Iran’s national interests, the memo said. The talks held at Sa’dabad palace led to significant achievements: the threats made at the time against Iran by the U.S. and Israel were removed; “forced suspension” of uranium enrichment gave way to “voluntary enrichment”; the definition of uranium enrichment was narrowed to include only enrichment using gas; an opportunity was formed to fully implement theretofore incomplete nuclear technology at the nuclear facilities of Esfahan, Bandar Abbas, Natanz, and Arak; the consensus between the U.S. and Europe over the nuclear issue was dissolved; and an opportunity emerged to solve many of the legal issues pertaining to the nuclear program through the IAEA.

Several days after the Sa’dabad talks, Supreme Leader Ali Khamenei said himself that they reflected no surrender on the part of Iran or compromised its interests.

As the government was engaged in negotiations, Iran’s nuclear scientists completed the development of nuclear technology, which included the opening and completion of the uranium enrichment facility in Esfahan, the production of 1274 centrifuges, obtaining heavy water, and the completion of more advanced centrifuges (P2 models). According to the Center for Strategic Research, Iran’s nuclear achievements have to do with previous years’ developments. Time will tell, the memo says, how each Iranian negotiating team performed over the years and what each achieved. Unfortunately, the sensitivity of the issue and the confidentiality of the documents make it impossible to discuss these matters; one must therefore be patient and wait for the right time (Aftab, December 20).

The conservative daily Jam-e Jam also showed appreciation for the work done by the Iranian negotiating team in Geneva. An article published by the daily claimed that the West, whose policy against Iran was proving to be a failure so far, believed it could attain its objectives through negotiations. Little did it know that the talks in Geneva would turn into a tribunal where it would be accused of cooperation with terrorists in the assassination of the Iranian nuclear scientist. Iran was more prepared than ever for the talks in terms of its regional, political, and economic power.

The West must abandon the mistaken strategy of the past, the daily argued, and engage in negotiations with Iran based on willingness to cooperate with it. The talks in Geneva have been a diplomatic and PR victory for Iran. It managed to prove to the international public opinion that the G5+1 had cooperated with the terrorists and that there was a division of labor between the IAEA, the Security Council, and the terrorists. Iran has proved that the Western strategy, based on exerting pressure while engaging in negotiations, was a failure, and that the sanctions, instead of breaking the will of the Iranian people, only make them more eager to progress (Jam-e Jam, December 18).

Uproar over foreign minister Mottaki’s sacking continues

A group of 16 Majles members submitted a written address to President Ahmadinejad this week criticizing the manner in which Foreign Minister Manouchehr Mottaki had been fired last week. In the address, the Majles members demanded that the president provide clarifications about his dismissal while on an official visit to Africa.

Majles member Ali Motahhari said that the sacking had been done in a dubious manner, and that the president owes the public an explanation why it was a matter of such urgency to lay off Mottaki during an official trip, and why he had to hear the news from the president of Senegal. Motahhari claimed that the manner in which the minister had been fired compromised Iran’s international status as well as Mottaki’s personal dignity. He noted that the Majles intended to continue discussing the issue (Khabar Online, December 19).

Meanwhile, this week Mottaki denied remarks made by First Vice President Mohammad Reza Rahimi, who claimed that the decision to relieve him of duty had been agreed upon by the former foreign minister and the president even before Mottaki’s trip to Senegal. Mottaki defined his sacking as humiliating, un-Islamic, and diplomatically unacceptable.

Majles speaker Ali Larijani also criticized the foreign minister’s abrupt dismissal. Speaking at the beginning of the weekly Majles session on Sunday, Larijani said that the minister could have been relieved of duty in a dignified manner instead of during a trip abroad (various news agencies, December 19).

Ali Akbar Salehi’s inauguration ceremony as acting foreign minister was held this week. At the ceremony, which was not attended by the dismissed foreign minister, Salehi laid out fundamental principles of the Foreign Ministry for the near future. He said that Iran’s foreign policy had to focus on its neighbors and on Muslim countries. In particular, he mentioned Saudi Arabia and Turkey as two countries that required special attention from Iran due to their unique regional status. Saudi Arabia is a key player in world economy and is home to numerous Islamic holy sites. According to Salehi, cooperation between Saudi Arabia and Iran may help resolve regional and Muslim world problems. On the subject of Turkey, Salehi said that the two countries were cultural and ideological partners. Turkey is a strong, strategically-significant country, and bolstering ties with it would be beneficial for the Muslim world. Salehi further stated that the status of China and Russia was special as well, and that the ties between the two countries and Iran called for particular political attention.


Salehi’s inauguration ceremony as acting foreign minister

Speaking about the relations with the European Union, Salehi said that despite its irrational and biased conduct towards Iran, the EU countries still wished to have stable relations with Iran for various reasons. If Turkey joins the EU, Salehi said, Iran will become the EU’s largest neighbor, making it necessary to start laying the political groundwork for such a scenario (IRNA, December 18).

Ali Akbar Javanfekr, the president’s media advisor, commented on Mottaki’s dismissal this week saying that the Foreign Ministry had to be majorly restructured in light of the recent changes in senior Foreign Ministry staff. Javanfekr, also the director of IRNA, the government’s news agency, said that the Mottaki-led Foreign Ministry had failed in its attempts to achieve a breakthrough in foreign policy in recent years, and that all the achievements made by Iran in its foreign policy had to do with initiatives led by President Ahmadinejad and his active presence on the international scene. Javanfekr noted that Mottaki was supposed to carry out the tasks he had been entrusted with by the president, and that he had been dismissed because of his failure to do so. He expressed hope that following the dismissal, the Foreign Ministry would attain the foreign policy objectives set by the president and his government (IRNA, December 18).

This week, Iranian commentators continued to discuss the potential implications of Mottaki’s dismissal on the Iranian foreign policy. Rahman Ghahremanpour, a journalist and foreign policy expert for the Expediency Discernment Council’s research center, said in an interview given to the Fararu website that the appointment of Salehi as acting foreign minister would have no impact on Iran’s foreign policy, which was independent of personal matters. He said that foreign policy was decided upon by the topmost echelons of the regime, and staff changes were unlikely to bring about any fundamental changes in foreign policy. He did note that the Foreign Ministry may play a more significant part than before in the nuclear talks in Istanbul, to be resumed in the near future (Fararu, December 18).

It was also the assessment of the daily Ebtekar that Salehi’s appointment would cause no strategic change in the nuclear policy. It may, however, result in greater coordination of the Iranian diplomatic apparatus, allowing it to better serve national interests (Ebtekar, December 18). The conservative daily Siyasat-e Rouz interviewed several experts this week about the potential impact of Mottaki’s dismissal on Iranian diplomacy. Various experts on international affairs commented that the minister’s dismissal would have no effect on the nuclear negotiations, since it was the responsibility of the Supreme National Security Council rather than the Foreign Ministry. The only likely change, according to one expert, is that the president will exercise more control over the Foreign Ministry (Siyasat-e Rouz, December 19).

Iranians celebrate Yalda winter solstice amidst concerns over price increases

This week Iranians celebrated Yalda, marked annually on the night of December 21, the longest night of the year and symbol of the beginning of winter.

The holiday dates back to a pre-Islamic Zoroastrian tradition. On Yalda, families traditionally get together to eat dried fruit, watermelons, and pomegranates. Tradition has it that eating summer fruits in early winter ensures good health and keeps disease at bay during the cold season. Storytelling and reading the poems of 14th century poet Hafez are also customary. Each family member makes a wish, opens a book with the poems of Hafez at random, and asks the oldest family member to read the chosen poem aloud. It is believed that the poem is in fact a commentary on the wish, answering the question whether and how it will come true. The tradition is called Fal-e Hafez (“The Draw of Hafez”).


The word ‘Yalda’ comes from the Assyrian word for ‘birth’, referring to the rebirth of the sun on December 21. In ancient Persian belief, darkness, symbolizing evil, is defeated by sunlight at the end of the first winter night, and therefore the entire night must be celebrated. Early Christians attributed the festivities to the birth of Mithra, the goddess of light and sun, and to the birth of Jesus. According to one tradition, Jesus and the sun were close to each other when they were born, hence Christmas and Yalda are close as well. 

After the Islamic revolution in 1979, the new regime in the Islamic republic attempted to ban pre-Islamic traditions common in Iran, including the Iranian New Year (Nowrooz) marked on March 21 as well as the Yalda festivities—it was unsuccessful, however. In recent years conservative circles in Iran have expressed their reservations over holding the Yalda ceremonies in the Islamic republic, and criticized the mention of those ceremonies on Iran’s media.

This week, ISNA News Agency has reported a certain drop in holiday shopping (mostly of sweets), saying that reasons may include the holiday’s proximity to the Shi’ite mourning ceremonies marked last week and Iranians’ reluctance to shop too much in light of the overall price increase as a result of the subsidy cuts (ISNA, December 20).

Pictures of the week: Emir of Qatar visits Iran


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