Bottom Line & Above

19 – 25 April 2023 

The Incredible Shrinking Rahbar

This past week in Iran demonstrated that, despite a recent run of foreign policy successes, it is not all beer and skittles for the Nezam. As our featured article this week details, Supreme Leader Ali Khamenei devoted much of his Eid al Fitr speech to calling for national unity,  respect for differing views and urging Iranians to “live together, work together, be kind to each other.”  He similarly called for the three branches of government to collaborate more closely and work together to solve the nation’s problems.  This is not the first time Khamenei has urged unity on the people or the government, and his plea to respect differing views must have seemed especially rich to those Iranians who lost an eye while protesting mandatory hijab. Still, his departure from his usual “hey you kids, stay off the lawn!” demeanor suggests he knows that he is trying rule a deeply unhappy and divided society.

A video released that same day revealed just how unhappy it is. As reported in the PersuMedia Daily Summary, the video showed Khamenei meeting with a group of typically vetted and hand-picked students a few days before the Eid. One of the students, a spokesman for the rightwing populist “Justice Seeker” student movement, flatly told the Supreme Leader that public despair and distrust of government was genuine and rooted in the disconnect between the government and the people, as well as in the yawning gap between declared and actual policies. He went on to criticize the mass disqualification of candidates for elective office and declared that the Justice Seekers believed many of the country’s problems could have been resolved through referenda—a topic pushed recently by reformists and rejected by Khamenei. After Khamenei again dismissed the idea of a referendum—insinuating that some voters were not sophisticated enough to understand the issues on such a ballot—and the meeting neared an end another student interrupted him, shouting “”You say transparency… but every day something bad happens to people!”  As Khamenei moved to bring the meeting to a close, the audience devolved into the kind of chaos typical of a Homeowners Association meeting (at least typical of my HOA’s meetings, which make one long for a benevolent despot) as students hurled challenging questions at the Supreme Leader.

The scene was quite different from Khamenei’s past meetings with students, which typically were marked by their deference toward the Aqa. It was an even farther cry from the adoring crowds that pressed close to view Khamenei in his armored bus when he visited Qom in October 2010. On that visit, young chador-clad women wept and swooned upon glimpsing God’s Vicar on earth.  But that was then.

Today, there is a growing trend of open criticism of the Supreme Leader. Last month, Principlists were drawing attention to Khamenei’s “generous support” for the administration of President Ebrahim Ra’isi and implying that the incompetence of Khamenei’s fair-haired boy was weakening the Nezam and distancing it from the people.  Reformists, too, are bolder and more pointed in their public criticism of Khamenei; one former MP last month dismissed the Leader’s Now Ruz address as nothing new, and criticized it for failing to inspire hope for positive change.  Perhaps most concerning to the Nezam are signs of dissatisfaction among the IRGC officer corps:  the minutes of meeting last January between senior IRGC officers and Supreme Leader Khamenei, leaked last month, included multiple complaints over poor morale, President Ra’isi’s mismanagement, and even over Mojtaba Khamenei’s interventions in IRGC affairs. The implicit criticism of the Nezam provoked one participant to scold his colleagues for failing to “stand by the leader’s side in difficult times.” (Although PersuMedia has been unable to confirm the authenticity of this particular report, it is consistent with other recent leaks of IRGC documents.)

The greater willingness of Iranians—including some of those most loyal to the Nezam—to publicly criticize Khamenei is, on one level, the inevitable outcome of the Nezam’s effort to engineer a “homogenized” government, with all branches in the hands of Khamenei loyalists. As the historically low voter turnout in the last presidential election suggested, Iranians knew they were given little choice on the ballot and recognized who really was calling the shots. As the administration and the Nezam as a whole has stumbled, especially over its botched attempt to enforce strict hijab and its failure to turn the economy around, Ra’isi has dutifully taken numerous bullets for the Leader, but Khamenei has not escaped unscathed. He owns this government more than he has owned any of its predecessors, so he also owns its failures.

The greater willingness of the public and officials to criticize Khamenei doesn’t indicate he is losing power—it is revealing that IRGC media have been leading the charge in defense of Khamenei and in criticizing calls for a referendum. But the Leader’s moral authority is slowly draining away. His claim to a sacred mandate as the Leader and Guide of the Muslim faithful doesn’t cut much ice and increasingly principlists and reformists alike are recognizing him for what he is—another politico with a responsibility to fix things. And things aren’t getting fixed.

In such a situation, it is no wonder that calls for a referendum have gained enough traction that even conservative “Justice Seeking” students endorse them. The demand for a referendum to decide key issues facing the Islamic Republic is a recognition that at a minimum, the current homogenized government is incapable of addressing the system’s shortcomings and failures. It is also a vote of no confidence in the elite that comprise the Nezam and a demand to let the people decide the way forward.

Backed by the IRGC, Khamenei can be intransigent despite such calls. But the longer he stonewalls, the more distrust in the Nezam grows. His successor will have to be especially skilled—and perhaps a little charismatic—if he is to restore public faith in the Islamic Republic and the authority of velayat-e faqih. That likely counts Ra’isi out—but is Mojtaba any more likely to be up to the challenge?

Khamenei Calls for Unity amid Growing Majles-Administration Rift

From Daily Summary of 22 April 2023

In a sermon marking the end of Ramadan, Supreme Leader Ali Khamenei briefly departed from his usual script of blaming “the enemy” for the country’s problems and instead called for unity while acknowledging that some issues stem from internal conflicts. Khamenei’s remarks appear to be directed at the ongoing divide between the Majles and the Ra’isi administration over the government’s weak economic performance. However, the divide seems to be growing wider as the inflation crisis continues to plague the country.

During his end-of-Ramadan sermon on 22 April, Khamenei advocated for close cooperation among the three branches of government, emphasizing that solidarity and synergy among them are crucial for solving problems and advancing the country. He pointed to the Constitution’s good arrangements for the formation of the branches, adding that full cooperation among the legislative, executive, and judicial branches could prevent political and economic gridlock. Khamenei further emphasized the importance of prioritizing problem-solving and avoiding what he called excessive “distraction and chatter” surrounding certain officials and issues. He noted that such challenges “may not always be the result of the enemy’s work, but can stem from neglect or other motives.” Khamenei’s comments seem to have been targeted at the recent rift between MPs and the Ra’isi administration, which has led to the resignation and removal of several cabinet members. The latest development involves hardline MP Habibollah Dahmardeh, who has begun collecting signatures to file a motion in the Majles to impeach Foreign Minister Hosein Amir-Abdollahian. Dahmardeh cited problems with Iran’s water supply from the Helmand River, border tensions with Afghanistan, and lack of progress in efforts to remove sanctions as grounds for impeachment (Daily Summary of 21 April 2023: “Iranian Foreign Minister Close to Impeachment?”). Following Khamenei’s speech, President Ebrahim Ra’isi highlighted the supreme leader’s emphasis on cooperation among Nezam entities, assuring him that all three branches of the government would prioritize resolving people’s problems and serving them sincerely through unity and synergy. In response to Khamenei’s speech, conservative MP Lotfollah Siahkali also contended that diverting attention from the economy constituted nothing more than what the supreme leader called distraction and chatter. Siahkali maintained that the primary concern for the Iranian people at present was their livelihood, and any discussion of topics beyond this issue would be misplaced. The MP further asserted that although the Iranian regime has made strides in various military and scientific domains, the challenges facing the country lie in areas that have adversely impacted the populace’s economic well-being. Despite several cabinet changes, however, bipartisan criticism of Ra’isi’s economic team persists among Majles members. Reformist MP Jalal Mahmudzadeh contended that the overall economic structure of the government is weak, attributing the country’s inflation and rising prices to its economic ministers and deputies. According to Mahmudzadeh, in just one month since the beginning of the new Persian year, the cost of many goods has increased by 50 percent, despite the government’s pledge to curb inflation and promote production.

Despite Khamenei’s recent call for unity, the divide between the Majles and the administration appears to be widening due to the ongoing inflation crisis. Economist Morteza Afqah contends that not only is there a gap between the Majles and the administration but also within the conservative camp itself, where various factions are at odds over economic matters. Afqah, however, maintains that conservative MPs share the responsibility with the administration, as they expressed their vote of confidence in the cabinet just two years ago.

Could Saudi Deal Replace JCPoA?

From Daily Summary of 20 April 2023

While Mohammad Eslami, the head of the Atomic Energy Organization of Iran (AEOI), is voicing optimism about the progress of negotiations between Iran and the IAEA, and reformist outlets remain hopeful that Oman can play a positive role in reviving the JCPOA talks, some JCPoA opponents insist the key to neutralizing sanctions depends on Iran’s regional partnerships, not the nuclear deal itself. Although reformists are inclined to tie the potential success of the recent Iran-Saudi agreement to the JCPoA, hardliners have pointed out that regardless of the future of the nuclear deal, the restoration of Tehran-Riyadh relations could help Iran’s ailing economy—sentiments echoed by some in Iran’s business community.

JCPoA enthusiasts welcomed Eslami’s recent statements emphasizing that the process of negotiations between Iran and the IAEA was progressing, and that technical delegations were in touch and communicating every day. In addition to Eslami’s comments, media reports on President Ra’isi’s phone call with Haitham Bin Tariq, the Sultan of Oman, strengthened the rumors about possible progress towards reviving the JCPoA. While the call centered on greetings for the end of Ramadan and Eid al-Fitr, some analysts believe that this phone call also included a discussion on the future of the JCPoA. The reformist outlet Arman-e Melli called the conversation between the two leaders “a phone call with the flavor of the JCPoA.” The reformist outlet Tejarat Online welcomed the positive news surrounding the potential resumption of more serious talks, highlighting the “potential opening in JCPoA talks” in its headline. Media outlets also hinted at Iran’s willingness to resume negotiations after the G-7 published a statement criticizing Iran’s nuclear program. In response to this criticism, the Iranian foreign ministry issued a statement emphasizing Tehran’s commitment to maintaining “constructive technical cooperation and interactions with the IAEA under the NPT and the Comprehensive Safeguards Agreement.” Some political figures remained unimpressed by Eslami’s latest comments. In an interview with the Moniban news site, Fereidun Abbasi-Davani, himself a former head of the AEOI and currently a hardline MP, stressed that Iran must “put aside the U.S. and the dollar,” which means “Iran should not negotiate with the U.S. at all.” Abbasi-Davani and other JCPoA opponents insist Iran can resolve the issue of sanctions by using its domestic resources and regional partnerships, not the JCPoA.

Overall, hardliners view the West’s alarmed tone over Iran’s nuclear advancement as a tool intended to prepare their audience for resuming the negotiations rather than as a genuine threat to Iran. Unlike reformists, who seem to tie the potential success of Iran-Saudi collaboration to the JCPoA, hardliners believe the agreement with Riyadh can benefit the country regardless of the future of the JCPoA. Members of Iran’s business community have expressed similar sentiments, pointing to Iran’s potential trade opportunities with Saudi Arabia. Ja’far Qannadbashi, director general of West Asia for Iran’s Trade Development Organization, asserted that Saudi Arabia’s foreign exchange capability could lead to joint investments, pave the way for the opening of banks in Iran, and create foreign exchange income for the country. Keivan Kashefi, a member of the governing board of the Iran Chamber of Commerce, underscored the importance of Saudi Arabia’s $300 billion trade balance, which could provide Iran with a market of $2–3 billion in the coming years.

Alternatives Considered as Gas Price Discussions Intensify

From Daily Summary of 21 April 2023

While authorities continue to deny plans to increase gasoline prices, there is mounting evidence that such a hike will happen and that gasoline could be imported from Russia. Some have suggested alternative options such as compressed natural gas and a third type of ration to avoid a gasoline price hike.

Amid the administration’s new restrictions on gas stations’ sale of non-ration gasoline to consumers without government-issued fuel cards, there are strong rumors circulating in the media regarding the possibility of another gasoline price hike. However, the administration continues to deny these speculations (Daily Summary of 16 April 2023: “Gasoline Restrictions, Likelihood of Price Hikes”). There is some evidence, however, that a gasoline price hike is in the cards. Lending credibility to these rumors, Iran newspaper, the administration’s official paper, recently published a report asserting that refining each oil barrel requires an investment of about $30–35 thousand. This means that building a refinery with 200,000 barrels of crude oil input would require about $6–7 billion in capital, but, currently, the production of each liter of gasoline costs 18,000 tumans, which makes it difficult to maintain the price of gasoline at the current level. In addition to these financial analyses supporting the need to raise gas prices, the plan to collect fuel cards at gas stations has also fostered the rumors of high gasoline prices. In an interview with ultra-conservative Javan newspaper, Shahbaz Hasanpur-Biglari, the vice-chairman of the Majles economic committee, denied the rumors, citing the oil minister’s assertion at the Majles that “the fuel quota has not been reduced and will not be reduced.” Meanwhile, as the media speculate about the possibility of a gasoline price increase, there are indications that the administration will import gasoline from Russia in order to avoid a price hike. Ali Ziar, the managing director of the National Petroleum Refining and Distribution Company, did not deny the possibility of importing Russian gasoline. In an interview with IRNA, Ziar suggested that imported gasoline from Russia would amount to “very little.” In addition to addressing energy consumption concerns, Ziar believes the issue of increasing and maintaining Iran’s strategic reserves is also under discussion as the country cannot afford to be without them.

In addition to the issue of gasoline consumption imports, one reality that the Iranian energy industry faces is the burden of its old refineries and the much-needed cost to their maintenance and repair, forcing the Iranian government to factor in these costs when setting gas prices. Despite the challenges facing the Iranian energy industry, there are alternative solutions that experts have proposed. According to Ehsan Hoseini, editor-in-chief of the energy desk at Fars News, there is currently enough capacity to replace 20 million cubic meters of compressed natural gas for gasoline, which could help alleviate the gasoline shortage. Hoseini suggests that creating a third gasoline quota at the import rate could restore half of this capacity and cover the 10-million-liter gasoline deficit. Proponents of this approach argue that it would avoid passing on the cost to consumers or the government.

Justice-Seekers or Reformists, Which Is Genuine Voice of Change?

From Daily Summary of 22 April 2023

Following Supreme Leader Ali Khamenei’s dismissal of the idea of a referendum, reformists have continued to stress the issue of conservative monopolization of power and called for fundamental change. However, justice-seeking students were the ones who recently raised the referendum demand in a meeting with Khamenei, and have argued that the reformists are using it only to regain credibility. In light of the justice seekers’ conservative track record, their call for a referendum indicates deep-seated concerns about the country’s political future and the monopolization of power.

In what appears to be a veiled dig at Khamenei, the mausoleum of the Islamic Republic founder Ruhollah Khomeini released a video clip featuring the late leader’s remarks on the significance of popular voting and decision-making in shaping the country’s future. The mausoleum’s website, run by Khomeini’s reformist grandson Hasan Khomeini, also included a speech in which the first leader of the Islamic Republic tells officials that they are only “the people’s delegate, not their guardian.” In recent days, reformists have intensified their calls for a popular vote and have pointed to Article 59 of the Constitution, which allows for a referendum on various issues, following Khamenei’s dismissal of such a vote during his meeting with students on 18 April (Daily Summary of 19 April 2023: “Referendum Demand: Political Ploy or Genuine Call for Reforms?”). While reformists have attempted to portray Khamenei’s remarks as opposition to their referendum proposal, the video of the meeting reveals that the issue was raised by conservative justice seekers. Additionally, a student who seemed to be conservative interrupted Khamenei towards the end of the meeting and emphasized the importance of transparency. One of the speakers at the meeting was Mohammad-Saleh Torkaman, the representative of justice-seeking students, who voiced concern about the issue of people’s despair, arguing that mistrust of the government is not just a media construct but a genuine issue rooted in the disconnect between the government and the people as well as the conflict between declared and actual policies. Emphasizing the importance of maximum public participation in elections as the backbone of the government’s legitimacy, Torkaman expressed dismay about mass disqualifications during the recent election and highlighted the need to pay attention to Article 59 of the Constitution. Torkaman stressed that the justice-seeking movement believed that “many important issues could have been resolved through referenda in the past 44 years, avoiding many challenges and disputes.” Justice-seeking activist Vahid Ashtari also took to Twitter to express his thoughts. Highlighting the fact that for almost 20 years, the country has faced “large-scale plunder,” Ashtari argued that corruption and mismanagement in Iran necessitate tapping into the capacity of the constitutional referendum, which provides a way for the Iranian people to directly participate in decision-making processes.

Given that Ashtari and other justice seekers have a conservative track record, their demand for a referendum suggests that they harbor significant concerns about the future of the country’s politics and the concentration of power. While these concerns are shared by the likes of former president Hasan Rouhani, the justice seekers make a clear distinction between their motivations and objectives for reform and those of the reformists. In a remark that appeared to be directed at Rouhani, Torkaman argued that if referenda had become a process for making important decisions, “bankrupt political figures” would not have used them as a political ploy.

What Is Workers’ Role in Nezam? ’Nothing,’ Say Workers!

From Daily Summary of 24 April 2023

A few months before the start of the French Revolution of 1789, Abbé Emmanuel Joseph Sieyès wrote a pamphlet entitled “What Is the Third Estate?” in which he argued that ordinary people (the third estate) were nothing in France but should be everything. The other two estates, namely the nobility and the clerics, were everything, but the people should matter the most.

It seems the same type of question is coming up about the role of ordinary workers in Iran. An article in ILNA conveyed the sentiments of Ali Khoda’i, a workers’ representative in the Supreme Labor Council, and labor activists like Hosein Habibi who believe that the role of ordinary workers in affecting their working conditions and wages is zero. The article is written by a female staff writer Nasrin Hezareh-Moqaddam, who argues that among the three elements of production, the government and the business owners are everything and the workers are nothing. The government that is supposed to provide suitable conditions for negotiations between the workers and owners and also be an impartial arbiter of disputes between business owners and the workers always sides with the owners and thus has little by little eliminated the role of the workers in the pursuit of their rights and interests. The author argues that nothing is left of the Supreme Council of Social Welfare and Security and the Supreme Labor Council today.

Indeed, there are reports of a wave of new complaints to the court about the inadequacy and unfairness of the current 27-percent increase in the cost-of-living adjustments for workers while the country is grappling with an inflation rate of over 50 percent. The speculation is that eventually these widespread complaints will lead to the nullification of this 27 percent. The dissatisfaction of the workers and their councils does not end with wages: unpleasant and unhealthy working conditions, the lack of job security with contractors and the unfair structure of labor and management relations are parts of the contentious issues for the workers. Copper workers in Kerman protested against low wages but also against the working conditions and the reduction of loan amounts that were supposed to be available to them. Some workers even refused to work on 24 April until these demands were met. Oil, gas and petrochemical workers in Khuzestan also protested for similar reasons: fair wages, better working conditions, 10 hours of downtime for every 20 hours of work, allowing workers’ true representatives to be part of the decision-making process, and for the government to address their lawful demands.

Iran’s economic problems are mounting and the last thing it needs is widespread strikes in key industries like oil and gas or the petrochemical and transportation sectors. Adding these labor-related problems to the already volatile social crisis over hijab, combined with the political problems of infighting and succession, Iran’s current conditions may not be quite comparable to that of France’s pre-revolutionary months, but it may be headed toward a perfect storm of volatility. What is the workers’ role in the Nezam? Nothing. But that cannot be the case if the Nezam is to hold on to its base, the “dispossessed” (mostaz’afin) that it has always championed.