Iran: "It's All Over" for the Green Movement?

It is one of the most striking articles to come out of Iran in recent weeks. A journalist for a US newspaper, who has stayed behind when his colleagues have left or been expelled, sits in a kitchen with four Iranian activists:

The opposition supporters nervously smoked cigarettes in the kitchen as loud music blared from the empty living room. A student, a businessman, a writer and an artist had planned a victory party but instead were mourning their defeat.

"It's all over," said the student, a young woman in a sleek black dress. "Our only option is to leave the country."

That is the opening of Thomas Erdbrink's atmosphere piece in The Washington Post this morning, and the bleakness is unrelenting:

"It was impossible to join up with other protesters," the student at the party said as she tried to reconstruct what went wrong. "There were just too many security forces."

She took a puff from her 10th cigarette that evening. "We were all supposed to meet up at the main square where Ahmadinejad would speak. There, we would all bring out green ribbons, to show how many we were," she said.

Instead, she found small pockets of protesters in side alleys, not knowing where to go or what to do. "We ended up with a couple thousand people running from the security forces," she said. "Our movement needs new tactics, but I have no idea what we should do."

After (or before?) the encounter in the kitchen, there are the thoughts of the Iranian blogger:

"I hope they can come up with new strategies, but I have no idea what those should be," said an influential blogger who is a member of an unofficial opposition think tank made up of Web activists. He suggested turning the first anniversary of the disputed June 12 presidential election into a day of protest.

"But I guess the government would just repeat what they do normally: declare each protest illegal and flood the streets with security forces," he said.

"In the end, the street is the only place where we can show how many people we are, but few people are ready to go to prison or get hurt," he said.

During recent demonstrations, he recalled, his friends would call him from their homes and offices while he was running from the police.

"If they are not ready to sacrifice anything, why should I be?" he asked. "My personal strategy out of this mess is to apply for a visa for Canada."

After the inclusion of former journalist Abbas Abdi, "There are moments that one person should say: This is how we will do this, whether you like it or not", Erdbrink returns to the gloom of the kitchen:

At the party, there was consensus on one issue. "Just because our protest failed, that doesn't mean we have lost our anger," the student said. "We have a very simple demand: freedom. But I don't see how we can get it."

So that's that, then? With The Post headline blaring, "Iranian opposition demoralized after failed protests at revolution's anniversary", has the white flag been unfurled?

Hmm....

Erdbrink is a very good journalist, and I don't it is possible to overestimate his tenacity in trying to report from Iran when most foreign reporters have deparated the country. That tribute, however, should not stand in the way of critiquing an article which quickly jumps from being an interesting snapshot to posting a once-and-for-all declaration.

A useful start might be another look at that opening paragraph at the failed "victory party". That indicates that Erdbrink's kitchen interview took place on 22 Bahman (11 February).

That was, indeed, a depressing day for many in the Iranian opposition. But I don't think it is a wild claim to suggest that the mood might not be permanent and/or fatal to the movement. In the following nine days, there have been re-assessments and renewed declarations. There has been not only the signal of the meeting between Mir Hossein Mousavi and Mehdi Karroubi but also statements from other reformist groups and activist organisations.

Of course, it would be a jump from analysis to speculation to argue that these numerous but often scattered signs mean that the opposition has regained the momentum of Ashura (27 December). For Erdbrink, however,
all of this can be set aside on the basis of his four depressed partiers, one blogger, and one "political analyst": "The government's strategy might eventually backfire, but for the time being, it has served to justify authorities' dismissal of the opposition as a meaningless band of foreign-backed counterrevolutionary rioters."

Reporting, especially first-hand reporting, is valuable. Sweeping predictions are dangerous. Erdbrink's article is likely to race around the Internet and discussion boards today as the definition of "defeat", but another nine days from now, its declarations will likely be another footnote to this ongoing conflict.

Marathon, not a sprint.

The Latest from Iran (19 February): Finding the Real Stories

2100 GMT: Human Rights Front. The Iran Human Rights Documentation Center has issued a statement challenging Iran's presentation on Monday at the UN Human Rights Commission: "United Nations human rights experts must immediately investigate Iran’s prisons, including allegations of rape, torture, and the detention of people for peacefully exercising their rights to freedoms of expression and assembly."

NEW Iran & the “Non-Bomb”: The Real Story on Tehran’s Nuclear Programme
NEW Iran Book Update: No More Good Reads in Tehran
NEW Iran: Are The Banks Failing?
Iran Document: Today’s Mousavi-Karroubi Meeting (18 February)
Iran Analysis: The “Now What” Moment (Farhi)
Iran: Getting to the Point on Detentions & Human Rights (Sadr)
Iran: Another Rethink on Green Opposition (Ansari)
Latest on Iran (18 February): Watching on Many Fronts

1910 GMT: And A Prisoner Released. Javad Askarian, an aide to Mehdi Karroubi, was released yesterday after a week in detention.

According to Saham News The veteran of the Iran-Iraq war had been sent to Evin prison on 10 February after being summoned by the intelligence ministry for providing “some explanations.”


1905 GMT: Another Political Prisoner. Iranian authorities have sentenced student activist Morteza Samiari to six years in prison. Samiari, an executive member of Iran’s national student union, was arrested because he received an open and official invitation to meet with representatives of a European Parliamentary Committee in Tehran.

1900 GMT: Your Friday Prayer Summary. Hardman Ahmad Khatami taking charge in Tehran today, and he is ready to gloat. Apparently "rioters" did not even bother to show up on 22 Bahman, disappointing the international media (you know, the reporters who were bused directly from the press centre to Azadi Square and back, not stopping and not Passing Go on the way) who wanted to relay “disturbances and clashes” rather than reflect the “epic” support of people for the Islamic Republic.

1740 GMT: Moscow's Slapdown. It's news that Russia has demanded "clear explanations" from Tehran about its nuclear programme. Russian Foreign Minister Sergei Lavrov said:

We are very alarmed and we cannot accept this, that Iran is refusing to cooperate with the IAEA. For about 20 years, the Iranian leadership carried out its clandestine nuclear program without reporting it to the IAEA. I I do not understand why there was such secrecy.

But it's even more news that Iranian state media is highlighting the apparent division between Tehran and Moscow.

1600 GMT: BloggingHeads. As it's a slowish afternoon, I've been listening to this discussion between Steve Clemons of the New America Foundation and former George W. Bush speechwriter David Frum about Iran. These are two of the most prominent analytic voices in Washington.

Striking to hear, therefore, the issue of whether Iran should be treated with respect and dignity reduced to "this is a country whose top three exports are pistachios, carpets, and saffron...aside from oil and gas, so it doesn't have a lot of claim to respect". And troubling to ask, after all 36 minutes....

How much knowledge of events inside Iran emerges in this discussion?



1500 GMT: We Pause for Levity. OK, this may not be serious news coverage, but it's Friday afternoon and I am already smiling at the breathless declaration, "Iran's Navy on Friday took the delivery of the first indigenously designed and developed guided missile destroyer Jamaran in the presence of the Leader of the Islamic Revolution Ayatollah Seyyed Ali Khamenei."

Then the photo comes in. I think only two words will suffice: Caption Competition:



1350 GMT: Political Prisoner Update. Radio Zamaneh summarises last night's releases: Omid Mehregan, author, translator, and journalist released after two weeks; Ardavan Tarakemeh, film student and cinema critic, on $30,000 bail, after more than three weeks; Orouj Ali-Mohammadi, former governor of Tabriz; Safoura Tofangchi (her two daughters and husband are still detained); Mohammad Dardkeshan, a political activist with ties to the late Grand Ayatollah Montazeri, after two months.

1315 GMT: The Supreme Leader Says "No Nukes". Ayatollah Khamenei on the draft IAEA report: "Iran will not get emotional in its response to these nonsensical statements, because we have often said that our religious tenets and beliefs consider these kinds of weapons of mass destruction to be symbols of genocide and are, therefore, forbidden and considered to be haram (religiously banned). This is why we do not believe in atomic bombs and weapons and do not seek them."

1245 GMT: Well, Here's a Nuclear Surprise. Not. Iran's envoy to the International Atomic Energy Agency, Ali Asghar Soltanieh, called the IAEA's draft report "baseless". He said the cited documents were "fabricated and thus do not have any validity".

1240 GMT: The Rise of Rahim-Mashai. Yet another role for President Ahmadinejad's Chief of Staff Esfandiar Rahim-Mashai (see 0815 GMT): he has been appointed the President's deputy with full authority for "Rahyan-e Nour", the caravan trips to the battlegrounds of Khuzestan in southwestern Iran.

1100 GMT: A new Green website, Mardomkhabar, has been launched.

1055 GMT: The authorities are still jittery about a show by the opposition. Tehran police chief Ahmad Reza Radan has warned that those arrested during the celebration of Chaharshanbe Souri ("Fire Festival") will not be freed until the end of Iran's New Year celebrations.

1045 GMT: Economy Watch. Khabar Online has recycled the attack of MP Mus al-Reza Servati on the President's budget --- the Parliament would question Ahmadinejad over "irregularities", but is prevented from doing so by political considerations --- by reprinting the interview in English.

Khabar is also featuring an article, "Experts are warning on a drop in the oil production of the country," even as Iran's Oil Ministry is seeking a 25 percent increase by 2015.

0938 GMT: Iran's Nuclear Spin. Press TV is portraying the International Atomic Energy Agency report as "two-sided", verifying "the non-diversion of declared nuclear material" but "call[ing] on Iran to further discuss and cooperate on alleged issues".

0930 GMT: Punishing the Cleric. Kalemeh claims that Molana Abdol-Hamid, the Sunni Friday Prayer leader in Zahedan in eastern Iran has been prevented from leaving the country.

In his Friday Prayer address last week Abdol-Hamid described the Islamic Republic as a system that gives equal freedom to both pro- and anti-Government groups and allows voices of opposition to be heard: “The people of Iran brought the Revolution to victory to achieve its goals and now they demand the reviewing and realization of those goals.”

0925 GMT: Political Prisoner Update. Reporters and Humanright Activists in Iran reports that Tehran Prosecutor General Abbas Jafar Dolatabadi has personally handed down a 16-count indictment to Bahareh Hedayat during an interrogation session at Evin Prison. Charges include spreading propaganda against the regime, taking part in post-election events, talking to foreign media organizations, insulting the Supreme Leader, insulting the President, and conspiring to act against national security.

0820 GMT: It is reported that the prominent German insurers "Münchner Rück" and "Allianz Versicherung" (the largest insurance firm in Europe) are pulling out of Iran because of the political situation.

0815 GMT: Another Office for Rahim-Mashai. President Ahmadinejad's Chief of Staff, Esfandiar Rahim-Mashai, may be widely disliked, but he continues to pile up the honours of office. The latest title is chief of pilgrimage and culture of Razavi Province, whose capital is the important religious city of Mashhad.

0810 GMT: Economy Watch. The leading reformist MP Nasrullah Torabi has criticised the flaws and the deceptive figures in the Ahmadinejad budget, claiming it is based on an estimate of 12-15% inflation rather than the true figure of 20-25% and that the development budget is only 20% of the total expenditure rather than the declared 35%.

0740 GMT: Friday is likely to be a Distraction Day. The "Western" media are likely to be possessed and obsessed by the nuclear story, running the Iran Imminent Threat headlines. They will do that even though the real story is that Tehran is nowhere close to nuclear weapons capability. How do we know? Well, because the Obama Administration said so on Thursday --- see our separate analysis as well as the draft of the International Atomic Energy report.

In Iran, the regime will maintain its post-22 Bahman strategy, declaring that all is now well while condemning foreign instigation of a supposedly marginal protest. Friday Prayers in Tehran will be one venue for the display.

We'll be looking elsewhere, however. The meeting between Mir Hossein Mousavi and Mehdi Karroubi (see separate document) was a big signal yesterday that the opposition is re-assessing and preparing for its next surge. Theirmessage from the two men was "Be Patient. We're Working on This"; we'll be looking for reactions.

And of course the "establishment" challenge to President Ahmadinejad continues to pick up momentum. Economy Watch today has a piece assessing the state of Iran's banking sector.

We also report this morning from the  Cultural Front: it appears that the Iranian Government is blocking the booklovers' social site Goodreads as a threat to the regime.

Iran & the "Non-Bomb": The Real Story on Tehran's Nuclear Programme

The dominant narrative in the "Western" media today will be "Iran Is Working on a Bomb", based on the recycling (but not necessarily close reading) of the draft report from the International Atomic Energy Agency.

There is a twist, however, in the tale. Some folks in the US Government are trying to re-direct the story. Reuters, which was the first agency to run the Bomb Threat headline, now reports:

Senior Obama administration officials said on Thursday they were struck by the number of significant technical problems Iran appears to be encountering on the road to a nuclear weapon.

The U.S. officials, briefing reporters on a new International Atomic Energy Agency report, said Tehran is showing more evidence of trying to move toward a nuclear weapons capability but may be running out of uranium.

Iran’s Nukes: The Latest IAEA Report (18 February)

"The fact that they have increased the level of non-cooperation indicates to me that unless we can mount the international pressure to stop it, this program is heading more and more in the direction of seeking a weapons capability," one official said.

It may take Iran longer to build a weapon because of the technical problems, the official said, "but the pattern of behavior is one that I think is very disturbing."

Interpretation? The Obama Administration's drive will be to "keep the lid" on Iran by holding out for an uranium swap deal with tight international controls and supervision, by pushing directed sanctions against essential equipment for Iran's programme, and by limiting Tehran's access to uranium.

That's the real story here, not the extrapolations and mis-interpretations of an IAEA report which actually said little new. Iran is not on the verge of The Bomb:

The [Administration] official said Iran seems to be "at least several years" away from accumulating sufficient quantities of 20 percent enriched uranium that would be necessary for converting into bomb-grade material. Uranium enrichment of 90 percent or more is needed for a weapon.

Iran Book Update: No More Good Reads in Tehran

Goodreads does not look like a dangerous website. Its welcome message is an innocent, "Have you ever wanted a better way to:

Get great book recommendations from people you know?
Keep track of what you've read and what you'd like to read?
Form a book club, answer book trivia, collect your favorite quotes?

Apparently, however, that is now enough to constitute a political threat. Last week, a Goodreads blogger wrote:

Last Friday, February 5, 2010, we were saddened to see Goodreads traffic in Iran plummet (screenshot above), which can only mean that Goodreads has joined the ranks of sites blocked by Iranian President Mahmoud Ahmadinejad's regime. One Iranian Goodreads member wrote to us and confirmed the news: "your site is recently been filtered by our horrible govrnmt. pls help us! spread it...books make no harm."

Inadvertently, there may have been a clue to Goodreads' fate in the next paragraph:

We couldn't agree more. Books make no harm. In an interview last year, Goodreads Author Azar Nafisi, author of Reading Lolita in Tehran, commented presciently on the Iranian phenomenon on Goodreads: "People constantly find ways of connecting. If [Goodreads] is banned in Iran, we need support for those people who just want to connect to the world."

Nafisi's work is despised by some prominent academics in Tehran, in part because of the content of Lolita, in part because of her connections with "right-wing" US think tanks.

Still, it is not Nafisi but Becca Fitzpatrick with Hush, Hush ("For Nora Grey, romance was not part of the plan. She's never been particularly attracted to the boys at her school, no matter how much her best friend, Vee, pushes them at her.") who is Goodreads' most popular author at the moment. So I'm still thinking that the site isn't necessarily the advance force for an American "regime change".

Perhaps the authorities in Tehran could enlighten us?

Iran: Are The Banks Failing?

Jahangir Amuzegar, who was Finance Minister in Iran's pre-1979 government, sifts through the rumours and realities of Iran's banking sector. Originally published in Foreign Policy:

Rumors have recently spread among Iran's jittery populace regarding the state of their country's banking system. Although these rumors happen to be nothing but a false alarm, the financial sector really is, and has been, in crisis for a number of different reasons.

The current spate of rumors began on Jan. 28, when Iran's commercial banks were ordered by the central bank to limit each depositor's daily cash withdrawal to 150 million rials (about $15,000). The order was explained by authorities as a means of implementing the anti-money-laundering legislation just passed by the Majlis, Iran's parliament, and combating what the finance minister called "financial terrorism."



This announcement coincided with an unrelated statement by President Mahmoud Ahmadinejad two days earlier regarding the elimination of "three zeros" from the currency, due to its drop in value, and the government's intention to restore the Iranian currency to its "real value." These dual developments aroused widespread suspicions among the traditionally cynical rank and file, who were already rightly skeptical of the often exaggerated and frequently contradictory economic statistics coming out of Tehran over the past five years. Sporadic news reports about the banking system's undercapitalization and the rising number of its nonperforming loans added to mounting anxieties.

Within a few hours, Facebook and Twitter messages spread and amplified rumors about a run on banks, customers rushing to withdraw their savings, and street clashes among depositors. Two of the largest state-owned commercial banks -- Mellat and Melli -- were said to be on the verge of declaring bankruptcy. Neither the vigorous denials by the two banks, nor the government's solemn assurances regarding the banking system's solid financial position, managed to quash the false alarms, and there were reports of ugly encounters in some provincial bank branches.

Curiously enough, the obvious absurdity of the bankruptcy rumors was missed even in some quarters that should have known better. Commercial banks facing liquidity problems in any modern state can always resort to the central bank's "open window" to borrow needed funds. And the central bank, with a printing press at its disposal, can never run out of money to lend. The bankruptcy of a state central bank, and by implication the failure of state banks, is a theoretical as well as existential impossibility. Depositors in state banks never lose their savings overnight through bank failures, but only through a hidden tax called inflation. Although the Islamic Republic has never established formal deposit insurance, as in the United States, all state bank deposits are de facto guaranteed by the full faith and credit of the central government.

The real problems faced by the Iranian state banking system are rooted in a host of other shortcomings. The banking sector is the most laggard area of the Iranian economy. Iran's state-owned banks suffer from high overhead costs -- too many branches, too many employees, and poor management -- with operating costs estimated at four times the world average. Furthermore, the Majlis and government-dictated loans to state entities and public projects at below-inflation rates make them highly unprofitable.

Finally, Iran's state banks suffer badly from enormous nonperforming assets. These unrepaid loans -- estimated at $48 billion, or 2½ times the banks' own capital -- have increased sevenfold in the last five years. To put that figure in perspective, Iranian banks accumulated less than $4 billion in nonperforming assets during the previous hundred years of Iranian banking history! These loans constitute nearly 20 percent of total bank assets -- compared with a world average of 3 to 5 percent. Around half of the arrears are owed by state-owned corporations. Seventy percent of the total is owed by only 1,000 entities (including some "shell," or nonexisting, paper corporations). Some $23 billion is owned by four state banks -- Melli, Mellat, Saderat, and Tejarat -- with Melli carrying the largest burden.

Borrowed funds are not paid back on time for several reasons. Ahmadinejad's administration limited the banks' annual lending interest rate to 12 percent -- in an economy that is experiencing much higher inflation rates, reaching 29.5 percent in September 2009 -- a heaven-sent incentive for borrowers to renege on their obligations and postpone repayment for as long as possible. The difference between the state banks' borrowing rate on the one hand, and informal bazaar rates on the other, create what economists call an intrinsic "rent" element. That is, the unsupervised funds, borrowed from an Iranian state bank at 12 percent, may be re-lent in the bazaar at rates up to 30 to 45 percent -- or even placed in other banks as long-term savings deposits, accruing 18 percent interest. As a result, borrowers rationally decide to forego the "late payment" penalty of six percent and postpone repayment as long as they can.

The Islamic Republic's endemic cronyism and flawed policies represent a constant impediment to the profitability of Iran's financial sector. Influential and well-connected borrowers -- state entities connected with the Islamic Revolutionary Guard Corps, siblings and grandees of clerical leadership, and clever apparatchiks -- easily manage to borrow large amounts without sufficient guarantees for repayment. One single borrower is reported to have obtained $100 million! These politically connected debtors often refuse to pay back their loans, and suffer no penalties. Under one government project, hundreds of small businesses promising to create jobs have managed to receive funds without proper scrutiny of their projects and are now unable to service their debts due to causes that range from the recession to their own incompetence. The sanctions imposed by the United Nations and the United States, and the poor performance of the Iranian economy -- GDP growth was just 1 percent last year, even with rising oil prices -- has dealt another blow to Iran's banking sector. An estimated 6,700 businesses were unable to service their financial obligations last year and received a one-year grace period by their banks.

The real problems facing Iran's state banks -- poor management, undue political interference, and the incongruity of mixing seventh-century Islamic finance principles (the foundation of the Iranian banking system) with the exigencies of the highly complicated world of modern international finance -- should inspire Iranians to keep a wary eye on their economy's bottom line.