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Playing for Time, Iran Realizes the U.S. Is Losing Patience

A photo of Dr. Zvi Bar'el.
Zvi Bar'el
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Iran's newly elected President Ebrahim Raisi speaks during his swearing in ceremony at the Iranian parliament in the capital Tehran, August.
Iran's newly elected President Ebrahim Raisi speaks during his swearing in ceremony at the Iranian parliament in the capital Tehran, August. Credit: Atta Kenare/AFP
A photo of Dr. Zvi Bar'el.
Zvi Bar'el

The thousands of Iranian drivers waiting hours in line at gas stations following a cyberattack that affected the online payment system became a great hope for those wanting to topple the country's regime. Israeli and Western sources rushed to suggest such an attack could inflame Iranian public opinion, hurt the middle classes in particular and shake public trust.

From there the road is short to a revolution that could oust the regime, or at least force it into negotiations over a new nuclear deal.

Despite all the failures of the past, people apparently haven’t abandoned hope in a strategy of toppling the Tehran regime by way of the streets and thereby freezing Iran’s nuclear program. This year, that strategy was reflected in a series of severe disruptions to railway service and power plants, as well as attacks on facilities involved in the nuclear program, like the one in Natanz.

But the Iranian public doesn’t need cyberattacks to lose faith in the regime or demonstrate against it. In November 2019, after then-President Hassan Rohani’s government decided to cut subsidies, thousands poured out of their homes to protest the move, which raised the price of a liter of gasoline from 10 to 13 cents. At least 150 people were killed in the ensuing clashes, and thousands were injured or arrested.

Iranian President Ebrahim Raisi visits a gas station in Tehran following the cyberattack that affected 4,300 gas stations across Iran, this month.Credit: AFP PHOTO / HO / IRANIAN PRESIDENCY

Still, the regime remained in power. To soften the blow, the government decided to directly compensate poor families and increase the quota of subsidized gas to each driver. This quota, currently about 100 liters a month, is allocated via smart cards that are loaded every month. Drivers use these cards to pay the gas station. Anyone who needs more gas than the quota allows has to buy it at the full price of 26 cents per liter. But even that price is heavily subsidized.

Around $65 billion, roughly half the national budget, is allocated to subsidies for various products, from bread and oil to electricity, water and gasoline. Previous governments tried to cut these subsidies, but quickly realized that doing so was virtually impossible.

In September there were reports that new President Ebrahim Raisi planned to raise gasoline prices again in an effort to cope with the severe economic crisis. The minister for budget and development vehemently denied this, calling the reports “malicious rumors.”

But when Iranians discovered that their gas stations had been attacked and they couldn’t use their smart cards, they immediately interpreted this as a government plot to raise prices by forcing them to buy gas at full price. Since unsubsidized gas doesn’t require the use of smart cards, it was readily available.

The government’s explanation that this was an outside attack by forces that wanted to hurt the country didn’t convince them. Their criticism was aimed directly at the government. But contrary to the hopes of whoever was behind the cyberattack, thousands didn’t take to the streets to protest. Within less than a day, most gas stations were working normally again.

Nevertheless, Iran has experienced numerous protests over economic issues over the last three years. Workers at hundreds of government factories protested to demand compensation for the decline in the rial’s value, payment of salaries that in some cases had gone unpaid for half a year, and improved working conditions.

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At times the government gave in and signed new agreements with the unions. At other times, the protests were forcibly suppressed and their leaders arrested.

No less important is the scathing criticism by members of parliament, as well as by media outlets close to the regime, of Raisi’s failure to put forth a realistic economic program three months since taking office. Raisi, who lacks any experience in economics, replaced most ministers and other senior officials at economic ministries and even set up an economic task force to draft a roadmap for exiting the crisis. But so far no concrete plan has been submitted to parliament, nor has the government sought to amend the budget.

A group of protesters demonstrates against the Islamic Republic's troubled economy at the historic Grand Bazaar in Tehran, Iran, 2018.Credit: AP

Raisi’s promise to build a million new homes within a year has been ridiculed by the media, and rents have soared month after month, forcing families to move in with other families. The media is similarly scornful of Raisi’s demand that the governor of Bushehr Province “solve the province’s economic problems within 10 days.”

Industry Minister Reza Fatemi Amin recently said that “over the next year, Iran will produce so many cars that people won’t have to stand in line to buy them.” This statement reminded Iranians of the promise to produce so many doses of coronavirus vaccine this year that Iran would be able to export the surplus overseas.

So far, Raisi hasn’t even managed to fill all his senior public posts, including that of education minister, even though the school year started a month ago. Some cabinet ministers are former senior officers in the Revolutionary Guards, the Quds Force or the intelligence service.

Among these are Foreign Minister Hossein Amir-Abdollahian, Interior Minister Ahmad Vahidi, Roads and Urban Development Minister Rostam Qassemi, Defense Minister Mohammad Reza Ashtiani and the head of the budget and development ministry, Mohsen Rezaee, a former commander of the Revolutionary Guards. Twelve ministers, as well as Raisi himself, are under American sanctions, and two, Vahidi and Rezaee, are wanted by Interpol.

Most of the government’s economic advisers occupied similar positions under former President Mahmoud Ahmadinejad, who emptied the state’s coffers and left billions of dollars in debt for his successor, Rohani. Members of parliament told the media that even if an economic program is submitted, which they don’t expect for another three or four months, there will be no one to carry it out due to the lack of skilled, experienced managers and bureaucrats.

Iranian workers sort and clean saffron filaments during the daffron processing at Iran's Novin Saffron factory in Touss industrial zone of Mashhad, northeast of Iran, 2006.Credit: Behrouz Mehri / AFP

Anyone who still thinks that attacking civilian targets will increase public distrust in the regime evidently didn’t think the public had sufficiently shown its frustration and despair during the last election. Even according to official figures, only 40 percent of eligible voters bothered to vote, and the real figure is thought to be somewhere between 20 and 28 percent.

Nevertheless, the regime still benefits from international consensus that negotiations over the nuclear program must be conducted with it, not with the public. The assumption that it’s possible to replace or topple the regime through pinpoint attacks currently seems baseless.

Yet the question of Iran’s intentions on the nuclear deal isn’t disconnected from internal pressures, both public and political. Abdollahian’s announcement that the nuclear talks will resume by the end of November (without specifying any particular date) wasn’t due to the attack on the gas stations. It stemmed from the weighing of American warnings–which not only indicate waning patience, but also an intent to formulate a new strategy against Iran together with European countries if the negotiations don’t resume– as well as economic pressure and the potential benefits of buying time.

Abdollahian’s request that Washington unfreeze $10 billion deposited in banks in America and other countries as a goodwill gesture, his demand for guarantees from America and its partners that no additional sanctions will be imposed, and his insistence that a system be set up to supervise the removal of sanctions may indicate not only the remaining points of dispute, but also that Iran’s actual goal is economic, not military.

Iranians walk through Tajrish bazaar in northern Tehran, Iran, 2016.Credit: Vahid Salemi/AP

When the last round of talks ended in June, both sides said real progress had been made on technical issues, inspection protocols and a return to the situation as of the signing of the original nuclear deal in 2015 – that is, to the same amount of enriched uranium and the same number of centrifuges spinning – in exchange for an immediate removal of all sanctions. The question now is whether Iran is willing to resume the talks from the point at which they ended in June; it is whether Raisi’s government is willing to embrace its predecessor’s positions, or whether it seeks to start the negotiations from scratch.

A diplomat from a European country involved in the talks said U.S. President Joe Biden seems willing to be flexible on sanctions and has already effectively lifted some sanctions on Iranian institutions and individuals. For instance, he said, Washington didn’t oppose South Korea buying oil from Iran and paying by unfreezing Iranian funds in that country. Therefore he didn’t think unfreezing additional funds would be an obstacle to the negotiations.

But even he couldn’t explain what Iran gained by continuing to drag out the talks. After all, even if it stockpiles more enriched uranium, it will have to give it up once a new agreement is signed, since all the parties to the talks, including the previous Iranian government, agreed that any new agreement would be based on the same principles as the previous one, especially with regard to uranium enrichment and timetables. And that earlier deal was backed by Iranian supreme leader Ali Khamenei.

If Iran seeks to renegotiate the uranium enrichment provisions, it will meet massive opposition from the other parties and probably also new sanctions, not just from America, but also from the UN Security Council. Until Biden’s election, the council opposed international sanctions, arguing that America had no standing to seek them because U.S. President Donald Trump had withdrawn from the original nuclear deal. But now the situation is different.

Biden can present his efforts to resume negotiations, the agreements reached with the previous Iranian government and Iran’s gross violations of the nuclear deal’s terms as proof that Tehran isn’t interested in reviving the deal. And he will likely be supported by his European partners, even if Russia and China might still veto any resolution to cancel the agreement and impose sanctions.

Abdollahian’s promise that talks will resume by the end of November doesn’t guarantee that they’ll be wrapped up shortly thereafter; Tehran may resume the foot-dragging that characterized it under Ahmadinejad. But Iran’s economic situation is much worse than it was a decade ago.

The mass demonstrations that followed Ahmadinejad’s reelection in 2009 were about democracy, human rights and rejecting an election whose outcome clearly stemmed from sweeping fraud. But now, any protests will be economic – and it will be much harder to suppress them.

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