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Sunday, November 4, 2012
Lt. Col. (ret.) Michael Segall: Iran: Sanctions Biting, Nuclear Program Progressing

Iran: Sanctions Biting, Nuclear Program Progressing
Lt. Col. (ret.) Michael Segall, November 4, 2012
Jerusalem Issue Briefs
Vol. 12, No. 24 4 November 2012

With the sanctions on Iran tightening in recent months, its leadership has
been trying to project business as usual. Iran is waging an extensive
propaganda campaign at home, emphasizing that the sanctions have not harmed
Iran’s oil exports and indeed are strengthening its local production in many

Yet the sanctions constitute the greatest economic, political, and
governmental challenge Supreme Leader Khamenei has faced since the end of
the Iran-Iraq War. Ahmadinejad’s government did not prepare in time for the
intensity and scope of the sanctions. They probably assessed that, in light
of the ongoing crisis of the Western economies, the likelihood of biting
sanctions on the oil and banking sectors was low.

In response to the intensifying sanctions and the ongoing foreign-currency
crisis, domestic criticism of Ahmadinejad’s government’s poor performance
has mounted. Critics in the Majlis (parliament), the media, and the
religious establishment claim the Western-imposed sanctions have had only a
minor effect on the economy and the problem mainly lies in the flawed
performance of those entrusted to run the Iranian economy.

Iran is now beginning to pay dearly for its heavy dependence on oil
revenues. Although this dependence was no secret to the Iranian leadership,
they wrongly assessed the seriousness of the West. Thus, Iran’s leadership
now faces a higher potential than in the past of renewed public unrest
backed by the religious establishment. Indeed, most of Iran’s senior clerics
have withdrawn their support for Ahmadinejad and his supporters ahead of the
upcoming presidential elections in June 2013.

The Iranian regime has been encouraged by its successes so far in advancing
its nuclear program (including the reported completion of the installation
of centrifuges at the Fordo uranium enrichment site) and by the changes that
are reshaping the Middle East. There is great doubt whether the challenges
Iran faces will lead the current leadership to revise its nuclear policy and
its preparedness for compromise with the West on the nuclear issue.

Since the effects of the sanctions are evident, in the West there are those
who will exploit this fact to defer military action against Iran in order to
give the sanctions “just another chance” to work. Iran will continue to
promote the different components of its nuclear program and is prepared to
pay the price of sanctions, believing it will be able to contain any popular
protests as it has done in the past and to rely on the West’s eagerness to
avoid any military action.

“Let the high praises of God be in their mouth, and a two-edged sword in
their hand” – Psalm 149:6

With the sanctions on Iran tightening in recent months, its leadership
including Supreme Leader Ali Khamenei, President Mahmoud Ahmadinejad, and
the heads of the Iranian Revolutionary Guard Corps (IRGC) have been trying
to project a business-as-usual atmosphere and underscore that the Iranian
people are capable of coping with the “ineffective sanctions” as they have
been doing successfully for more than thirty years of the revolution, during
which they have stood firm against “the hostility of the United States and
the West.” They reiterate that Iran’s nuclear program is only an excuse for
imposing the sanctions, whereas the real reason is the West’s desire to
contain Iran’s growing influence on the rapidly changing regional reality,
especially in light of the Islamic Awakening (as Iran calls the Arab
Spring), and to try and sway the results of Iran’s June 2013 elections.

“Sanctions Against Iran”

The Sanctions Can No Longer Be Ignored

In actuality, the harsher the sanctions – particularly their dramatic effect
on Iran’s revenues from crude-oil exports, which are a crucial part of the
revenues on which Iran’s national budget depends – the greater their impact
on Iran’s economy and society. The sanctions’ impact is gradually becoming a
fundamental element of the domestic political-religious discourse conducted
among the different political camps, the religious establishment, and the
leadership, and between them and the Iranian people.

The West’s sanctions and other measures (such as stopping the broadcasts of
major Iranian satellite channels by a European satellite provider) are aimed
at pressuring Tehran to give up the problematic and military components of
its nuclear program and act with full transparency toward the International
Atomic Energy Agency.

“The Sanctions Are Creating Problems Throughout Iran”

Khamenei has asserted on a number of occasions that “the West wants to bring
the Iranian people to its knees” and bend it to its will, but is doomed to
fail.1 Khamenei, during a visit to North Khorasan Province in early October,
met with government officials and told local residents in a speech:

"Lately the Iranian nation has been facing a gang of enemies headed by the
Satanic Zionist circles….Most unfortunately, the United States and several
countries in the West are influenced by these circles….They have been
opposing the Islamic Republic of Iran since its inception….At present they
are intensifying the sanctions against us. These sanctions are not a matter
of yesterday or today; they have accompanied the Iranian Revolution since
its birth. Time after time they tighten the sanctions that are not working
while pretending they will be lifted if Iran just renounces its nuclear
capabilities; they are lying, the main reason for the sanctions is their
blind hatred and their evil designs against the Iranian people….The
sanctions are actually a declaration of war against an entire nation…."

Clearly, the sanctions are creating problems all over Iran and in your
province….The rising prices and employment are at the top of the list of the
people’s problems, but they can be solved, and the Iranian Revolution has
coped for thirty years with more difficult problems and challenges and
overcame them….The West showed very great interest and reported extensively
and in infantile elation on the “bazaar events” [referring to the strike by
bazaar merchants on Oct. 3 in the wake of a dramatic currency
devaluation]….We must ask them frankly whether the economic situation in
Iran is worse than that in some of the European countries with their street
demonstrations we have witnessed over the past year….Your economic problems
are graver than Iran’s economic problems.2

The West Wants Revenge

Khamenei has been joined by clerics in Tehran whose Friday sermons similarly
describe the reasons for the sanctions. For example, Ayatollah Ahmad Khatami
asserted in a sermon at Tehran University that “the enemies of Iran are
trying to influence the results of the upcoming presidential elections in
Iran and to create an economic crisis with the sanctions.” He said the
“real” reason for the sanctions was “the West’s attempt to get revenge on
Iran for the Islamic Revolution.” Khatami accused Europe of being an “abject
slave” of the United States and said most of the sanctions the European
Union has newly imposed on Iran have a primarily symbolic effect and no real
effect. At the same time, Khatami acknowledged (similarly to Khamenei) that
“there are problems in Iran, but not a crisis….If the Europeans are looking
for problems and crises they will find them in Europe. The Iranian people
have learned to live and cope with problems and pressures and hence the
efforts of the enemies of Iran to weaken the Iranians’ resolve are doomed to

The Greatest Challenge Since the Iran-Iraq War

The sanctions levied on Iran over the past year – whose end is not yet in
sight – constitute the greatest economic, political, and governmental
challenge Khamenei has faced since the end of the Iran-Iraq War. The
executive branch of the Iranian leadership, namely, Ahmadinejad’s
government, did not prepare in time for the intensity and scope of the
sanctions. They probably assessed that, in light of the ongoing crisis of
the Western economies, the U.S. elections, and what they regard as the
weakening of America’s status in the region and the strengthening of the
Islamist movements, the likelihood of harsh sanctions on the oil sector was
low. Hence, only in recent months has Iran begun to devise practical
solutions (such as setting up private companies through which to export the
oil) in an attempt to revive, if only partly, the inflow of revenue via
alternative oil export channels that are not susceptible to sanctions, and
to adjust the deteriorating Iranian economy to the changing reality.

Plan B

In the framework of the Iranian “answer” to the mounting sanctions, Naser
Soudani, vice-chairman of the Majlis Energy Committee, announced that the
Majlis (parliament) had drawn up a three-phase “preemptive embargo package”
as a retaliatory measure against several European states’ sanctions. In the
first stage, countries hostile to Iran “will be deprived of Iran’s
high-quality light and heavy crude oil”; in the second, imports from
European countries involved in the sanctions will be prohibited; in the
third, Iranian tourists will be forbidden to visit these countries. Soudani
said that Iran was circumventing sanctions with the help of the private
sector and that the Majlis had authorized the government to privatize 20
percent of Iran’s oil exports.4 Mohsen Khojasteh-Mehr, deputy minister of
petroleum for planning and supervision on hydrocarbon resources, has termed
this the “economy of resistance” (Khamenei’s slogan for the current Iranian
year which started on March 20, 2012). This envisions a kind of independent
economy whose main characteristics include: “handing over economic
activities to the people, reinforcing the private sector, supporting
national production,…cutting reliance on oil revenue, reforming management
and consumption patterns, and reliance on a knowledge-based economy.”5

Curtailing the Damage

Meanwhile, as part of the efforts to curtail the sanctions’ impact on public
opinion, Iran is waging an extensive propaganda campaign at home,
emphasizing that the sanctions have not harmed Iran’s oil exports and indeed
are strengthening its local production in many areas. Oil Minister Rostam
Qasemi recently rejected claims of a decline in Iran’s oil production and
said Iran was continuing to produce four million barrels of crude oil per
day. He threatened that if the West increased the pressures and sanctions,
Iran would stop exporting crude oil, a step that will lead to global price
hikes. He said, without going into detail, that Iran has an alternative plan
that will enable it to run the country without any need for crude-oil
exports.6 For its part, the Iranian media from time to time reports a rise
in Iranian exports of non-oil products. Indeed, at its inception (March
2012) Khamenei declared the Persian year as one of local production, and
many spokesmen invoke this statement to explain the dramatic reduction in
imports of basic products that are deemed “superfluous” for Iran.

“Bunch of Idiots”

In response to the intensifying sanctions and the ongoing foreign-currency
crisis, criticism of Ahmadinejad’s government has mounted. Whereas
government officials seek to blame the distress on the sanctions and foreign
actors, government critics in the Majlis, the media, and cyberspace claim
the sanctions have had only a minor effect on the economy and the problem
mainly lies in the flawed performance of the government and those entrusted
to run the Iranian economy.

For example, Ahmad Tavakoli, former chairman of the Majlis Research Center,
contended that the sanctions had only a minor impact on the foreign-currency
crisis compared to the government’s mistaken economic policy. What led to
the crisis, he claimed, was the huge amount of money that was pumped into
the economy and the ongoing economic stagnation; emerging from the crisis
required renewing the system of coupons and the rationing of some basic
commodities, steps that would, in his view, ease the distress of the Iranian

Friday sermons throughout Iran also addressed the economic situation and
maintained that it was not the sanctions that were at fault. Instead, it was
the government’s flawed decision-making process, flight from responsibility,
and a lack of coordination between the branches of government that had
caused the crisis with its dizzying price rises and escalating burden on the

The Isfahan imam Hojjatoleslam Tabtaba’inez said: “In my view, the main
reason for the protests in the bazaar were the president’s irrelevant
answers concerning price hikes…he did not blame the price hikes on the
government…he thinks that the [Iranian] people are a bunch of idiots and
morons.…In my view, a small part of Iran’s economic problems and inflation
are due to sanctions, and the main cause is [the government’s] wrong
economic policies.”8

Ayatollah Ahmad Alamhoda, Mashhad’s prayer leader, attacked the government
and said: “When you were elected you told the revolutionary people that you
would be able to cope with every problem that the arrogant superpowers [the
United States] would place before Iran and now it turns out that you have
been traitorous to the people who demanded to live and practice their
religion.” He called for using an iron fist against the various elements who
raise prices without justification.9

Tehran’s interim Friday prayer leader, Hojjataleslam Ahmad Khatami, said
poor decision-making rather than sanctions had caused the economic pressure.
“These bad decisions should not be blamed on only one branch of government.
All three branches must join hands to reduce the pressure on this great

The Bitter Truth Is Better than Obfuscation

In an editorial, the popular Iranian website Alef analyzed the “real”
reasons for the sanctions, asserting it is not Iran’s uranium enrichment or
hostility to Israel, nor the West’s lack of trust in Iran, that is
responsible. The real reason, the author claims, is Iran’s fundamental
nature and guiding tenets, and the challenge it poses to the West as an
ideological and cultural alternative. Hence, the author argues, the truth
about the sanctions should not be concealed from the public; this candor
will enable it to prepare adequately for the damage they wreak.

"Why is the Iranian media not publicizing the fact that Iran is now selling
less than a million barrels of oil and even that with great difficulty? If
citizens come to know this truth and similar truths, will they not complain
less and be understanding and cooperative? Should one not explain to the
public that the current sanctions are by far the most severe since the
Iran-Iraq War, yet we must stand firm for the sake of the country’s future?
Even if we hide the truth from the public, it will in any case discover it
in Western media; is it not preferable that the public should hear the
explanations straight from the leadership and in a logical fashion?

We must say (candidly) that the sanctions are indeed taking a considerable
toll; the approach adopted by some of the media and the senior officials,
claiming the sanctions are having no impact, is meant to boost the public’s
morale, but is it not preferable to admit that the sanctions are having and
will have effects and consequences, but we must suffer these consequences
for reasons of one kind or another? Even if the public is told that the
sanctions are having no effect, are they not able to realize this themselves
in light of the dramatic rise in the prices of products?"

The article’s author also warns against some elements’ exploiting the
sanctions to slam the government and advance their interests in the run-up
to the elections.

"Because if they do not acknowledge the real impact of the sanctions and
cast the blame for this and all the other problems on the current government
while portraying it as unsuitable and culpable for the situation, they can
then promote themselves as candidates for the president’s seat. Is this not
a disgraceful political tack to take? To make yourself stupid and drag the
public into this stupidity for political purposes."11

And Meanwhile…the President Is Occupied with Trifles

In recent weeks an affair has rocked Iran and revealed the intensity of the
dispute between its different camps as well as the nadir to which
Ahmadinejad’s status has sunk domestically. It concerns the president’s
requests to visit Ali Akbar Javanfekr, his senior media adviser who is now
imprisoned in Tehran’s Evin Prison, and the rebuff of his requests by the
judiciary on two occasions. The affair shows again how Ahmadinejad and his
“deviant” camp are trying to move the goalposts in challenging Khamenei and
his authority.

In response to Ahmadinejad’s requests to visit Javanfekr, a spokesman for
the judiciary said:

“If we look closely at the situation, we see that under the current
circumstances it is not appropriate to permit a visit to Evin Prison, since
this is likely to arouse doubt in people’s minds, who can ask themselves why
[the president], instead of dealing with the foreign-currency situation,
with the gloomy state of the economy, is interested in a visit at Evin
Prison, a matter that is a peripheral issue….We are now on the eve of
elections in Iran and we have to avoid any problematic step or decision, as
the leader of Iran has ordered, and maintain a calm atmosphere.”12

Moreover, the religious establishment and the senior sources of religious
authority (“sources of emulation”) – who are constantly exposed to the real
sentiments and growing distress of the population – have also intensified
their attacks lately on the government in general and Ahmadinejad in
particular, calling on the government to solve the problems of rising food
prices, high unemployment, and housing. As Grand Ayatollah and source of
emulation Naser Makarem Shirazi said about the recent correspondence between
Ahmadinejad and the judiciary concerning visiting Evin Prison:

“Lately there have been such exchanges of letters of a communicative and
public nature, something that arouses tensions. Under the current
circumstances, a legal prohibition has been applied to creating tension. The
country has problems that we must grapple with. The responsible officials
must put aside the peripheral and unimportant issues and address the
problems of the public such as the high cost of living, inflation, the
sanctions, economic distress, and moral problems. Do not deal with issues
that are not essential to the country; look at the foreign media and see
what a sensation they are making out of these matters, claiming that the
leaders of the country are fighting with each other.”

The criticism of the government’s impotence before the Iranian people’s
economic distress was also joined by other sources of emulation such as
Grand Ayatollah Lotfollah Safi Golpaygani and Grand Ayatollah Hussein Nouri

Ali Saeedi, Khamenei’s representative to the Revolutionary Guard, also
criticized Ahmadinejad and even expressed regret for supporting him in the
past. The criticism mainly concerned his apparent willingness for dialogue
with the United States and his periodic challenging of Khamenei’s authority:

“I am unable to understand what goes on in his mind when he speaks of
dishonorable relations with the United States, with which we have a
fundamental, fierce, and bitter conflict….At the head of the executive
branch must stand someone with a sound worldview and basic beliefs who is
not easily influenced by external elements….His statements today are
different from his statements in the past….The problem is that the
presidents confuse between their role and the role of the leader of the
regime, they make themselves copywriters and act far beyond their
authorities. They forget that the regime has different branches. Three
branches that act under the leader.”14

“Persian Spring”? “Get Out of Syria, Find a Solution to Our Problems!”

Along with the criticism of President Ahmadinejad and his government’s poor
performance and inability to deal effectively with the economic crisis,
there are signs of life among the reformist elements. These elements stress
what they say is a link between, on the one hand, the ongoing
foreign-currency market crisis in particular and Iran’s problems in general,
and on the other, Iran’s ongoing massive assistance to the regime of Bashar
Assad (similar claims having been made in the past about Iran’s aid to the
Palestinians). The reformists claim that the “Green discourse” continues
under the surface and has taken hold in certain sectors.

This tendency was exemplified by the “bazaar demonstrations” which, even if
not directly organized by the Green Movement, well reflect the Green and
reformist discourse. Seyed Mustafa Tajezadeh, a political prisoner who
served as a deputy minister in the Khatami government and later as President
Khatami’s adviser, has joined the Islamic Iran Participation Front (Jehbe-ye
Mosharekat). Speaking from prison, Tajezadeh said after the bazaar
demonstrations that when the demonstrators cried “Get out of Syria, find a
solution to our problems!” it was clear that their economic demands were
closely linked to the political reality and to Iran’s foreign involvements
at the expense of the country’s own residents. The involvement in Syria, he
asserted, is a good example and a poor policy that has led to the
devaluation of the rial against the dollar and to the burning of Iranian
flags and passports in Syria.15

In any case, the developments in Syria are likely to have far-reaching
implications for the domestic Iranian arena. The fall of Bashar Assad – who
is perceived in Iran as one of the symbols of steadfastness against the West
and Israel – is likely to be perceived by the opposition as weakness and
they are likely to exploit it by intensifying their protests.

Nobel Prize winner Shiran Abadi recently expressed optimism about a possible
“Persian Spring,” saying, “It is not going to be too long before that day
arrives,” although just when this would happen “was difficult to predict.”
She said an uprising against the government would be “a function of Iran’s
relationship with the United States, Iran’s relationship with neighboring
states, and the economic situation of the country.” She noted that while the
disturbances sparked by the June 2009 presidential elections had indeed
subsided, “they are continuing but in different forms” including
“cyberspace” and “civil disobedience” as well as contacts with foreign
media. Abadi added that anger remains intense because “the economic
situation of the people is becoming worse every day. In the past year, the
value of our national currency has devalued by some 60 percent, and human
rights violations in Iran are rife and widespread.” In her view, a change
would not be brought about by elections since “they are not free and fair in
Iran….It is a power struggle, and it all depends on which side the Islamic
Guards of the Revolution decide to support.…What emerges from the election
is not the vote of the people; this is a battle for power.”16

The Price of Dependence

Iran is now beginning to pay dearly for its dependence on oil revenues.
Although this dependence was no secret to the heads of the regime, they
wrongly assessed the seriousness of the West, which, while it indeed wants
to avoid military action against Iran, seeks instead to impose biting
sanctions at a time of global economic travails. Iran’s leadership, which
wants to downplay as much as possible the economic crisis caused by the
sanctions, especially with the ongoing loss of oil revenues, now faces a
higher potential than in the past of renewed public protest backed by the
religious establishment. That is why the leadership broke up the bazaar
demonstrations sparked by the foreign-currency crisis. Nevertheless, the
regime’s ongoing involvement and strong support for Syria, in the face of
the escalating economic crisis, continues to fan public criticism of the
regime among different sectors.

So far, however, the sanctions’ impact on the public has not caused a
substantial change in the nature of the anti-regime protest; it is still
confined to cyberspace with only a few manifestations in physical reality.
At the same time, most of Iran’s senior religious officials have withdrawn
their support for Ahmadinejad. They attack him for pursuing a personal
agenda that ignores the public and blame his government, not the sanctions,
for the socioeconomic crisis. Should the social protest gather steam,
figures from the religious establishment, some of whom already support the
Green Movement and reformist elements, will likely join the protest and give
it religious-legal validation. Any change in Iran will indeed require
validation by the religious establishment, as was the case with other
revolutions in Iranian history.

In any event, the June 2013 elections have already begun to play a central
role in Iran’s domestic discourse and are already directly associated – at
home and abroad – with the issue of the sanctions and the economic crisis.
Iran’s leadership claims – as it did in the previous elections – that the
West is trying to use the sanctions to determine the results of the election
and bring about a change in the Iranian regime. The closer the date of the
elections, the more the regime is likely to beef up security measures. It is
already warning elements in the domestic security forces against any attempt
to disrupt the elections and the preparations for them.

Prepared to Pay the Price

Despite the growing challenges in the domestic arena and in the economic
sphere and the difficulties the regime is encountering regarding its efforts
to unite the Iranian people around the price it is required to pay for Iran’s
nuclear independence, the ideological components and the goal that Iran has
set for itself to lead the Islamic world have remained strong and firm, as
well as its resolve to continue to develop its nuclear program. Recently, it
was even reported that Iran is completing the array of centrifuges at the
Fordow site near Qom.

Khamenei and his main base of support in the Revolutionary Guard also
present the West and particularly the United States (the Great Satan) as a
sworn and bitter enemy of Iran. They stress the sanctions that harm the
Iranian people, the removal of the Iranian dissident Mujahideen-e-Khalq from
the U.S. State Department list of terror organizations, the assassinations
of nuclear scientists, the disconnection of the Iranian satellite channels
from the European satellite, and Iranophobia. Therefore, any decision to
compromise, given this background, would be unbearably difficult from
Khamenei’s standpoint. He apparently backs the attacks on Ahmadinejad and
his government in order to distance himself from the storm of criticism and
public protest. Following recent press reports of direct negotiations
between U.S. and Iranian officials (involving Khamenei’s senior
international affairs advisor, Ali Akbar Velayati), and ongoing discussion
of the issue in the local media, the Institute for Preserving and Publishing
the Works and Words of Ayatollah Khamenei has republished his comments
during Friday prayer sermons in 1997 regarding relationships with the U.S.:
“Talks with the U.S. have no benefits for the Iranian people.”17

The Iranian regime has been encouraged by its successes so far in advancing
its nuclear program and by the changes that are reshaping the Middle East.
For the moment, it is not deterred by the price it has to pay in the
domestic arena for continuing its defiance of the West on the nuclear issue
and with its continuing support for Syria. In general, there is great doubt
whether the challenges Iran faces – and at their head the intensifying
sanctions that levy a heavy price from Iran – will lead the regime to change
its nuclear policy and its preparedness for compromise with the West on this

Sanctions and Military Action

In sum, as the Iranian leadership admits, the sanctions are affecting Iran’s
economy and presenting challenges of a kind unknown in the past. At the
moment the leadership is following a policy of concealment from the public.
Yet since the effects of the sanctions are evident, in the West there are
those who will exploit this fact to defer military action against Iran in
order to give the sanctions another chance to work. Iran will continue to
promote the different components of its nuclear program and is prepared to
pay the price of sanctions, believing it will be able to contain any popular
protests as it has done in the past and to rely on the West’s eagerness to
avoid any military action.
* * *


1. http://www.farsnews.com/newstext.php?nn=13910725000725

2. http://www.leader.ir/langs/fa/index.php?p=contentShow&id=9952

3. http://tinyurl.com/ISNAKhatani6


5. http://www.shana.ir/197018-en.html

6. http://tinyurl.com/8lgoo7

7. http://www.khabaronline.ir/detail/252121/politics/parliament

8. http://www.farsnews.com/newstext.php?nn=13910714000308

9. http://www.farsnews.com/newstext.php?nn=13910714000308

10. http://www.mehrnews.com/fa/newsdetail.aspx?NewsID=1712579

11. http://alef.ir/vdcayan6649nie1.k5k4.html?168341

12. http://tinyurl.com/9enope8

13. http://tinyurl.com/9nq35ay;

14. http://www.entekhab.ir/fa/news/80964

15. http://www.kaleme.com/1391/07/29/klm-116573/


17. http://farsi.khamenei.ir/speech-content?id=21379
About Lt. Col. (ret.) Michael Segall

IDF Lt.-Col. (ret.) Michael (Mickey) Segall, an expert on strategic issues
with a focus on Iran, terrorism, and the Middle East, is a senior analyst at
the Jerusalem Center for Public Affairs and the Terrogence company.

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