Afghanistan Mystery: What's Behind the US, Pakistan, and the Captured Mullah?

UPDATE 1145 GMT: The Washington Post this morning has a very different view of US-Pakistan relations and the Mullah Baradar case:

The capture of senior Afghan Taliban leaders in Pakistan represents the culmination of months of pressure by the Obama administration on Pakistan's powerful security forces to side with the United States as its troops wage war in Afghanistan, according to U.S. and Pakistani officials.

A new level of cooperation includes Pakistani permission late last month for U.S. intelligence officials to station personnel and technology in this pulsating megacity, officials said. Intercepted real-time communications handed over to Pakistani intelligence officials have led to the arrests in recent days of Mullah Abdul Ghani Baradar, the Afghan Taliban's No. 2 commander, and two of the group's "shadow" governors for northern Afghanistan.

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Gareth Porter, writing for Inter Press Service, goes behind the official story of the US-Pakistan joint operation to break the "Old Taliban" in Afghanistan with the capture of the organisation's second-ranking leader:

Contrary to initial U.S. suggestions that it signals reduced Pakistani support for the Taliban, the detention of Mullah Abdul Ghani Baradar, the operational leader of the Afghan Taliban, represents a shift by Pakistan to more open support for the Taliban in preparation for a peace settlement and U.S. withdrawal.

Afghanistan: The Latest on the US Military-Covert Offensive

Statements by Pakistani officials to journalists prior to the arrest indicate that the decision to put Baradar in custody is aimed at ensuring that the Taliban role in peace negotiations serves Pakistani interests. They also suggest that Pakistani military leaders view Baradar as an asset in those negotiations rather than an adversary to be removed from the conflict.

Pakistan has long viewed the military and political power of the Taliban as Pakistan's primary strategic asset in countering Indian influence in Afghanistan, which remains its main concern in the conflict.

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.

Latest on Iran (18 February): Watching on Many Fronts

2120 GMT: Author, translator and journalist Omid Mehregan has been released from detention.

2100 GMT: So all our watching on many fronts is overtaken by the "Iran Might Be Getting A Bomb" story. Little coming out of Iran tonight; in contrast, every "Western" news outlet is screaming about the draft International Atomic Energy report on Iran's nuclear programme. (Funny how each, like CNN, is implying that it "obtained" an exclusive copy.)

1830 GMT: Political Prisoner News. "Green media" pull together reports that we carried last night: 50 detainees were released, including Shahabeddin Tabatabei, member of the Islamic Iran Participation Front and head of youth in support of Mir Hossein Mousavi and Mohammad Khatami, Parisa Kakaei of the Committee of Human Rights Reporters, student activist Maziar Samiee, and Khosrow Ghashghai of the Freedom Movement of Iran.

An activist adds that Ardavan Tarakameh was released on bail this evening.

NEW Iran Document: Today’s Mousavi-Karroubi Meeting (18 February)
NEW Iran Analysis: The "Now What" Moment (Farhi)
NEW Iran: Getting to the Point on Detentions & Human Rights (Sadr)
NEW Iran: Another Rethink on Green Opposition (Ansari)
Iran Analysis: Ahmadinejad Stumbles; “Karroubi Wave” Surges
Iran Nuke Shocker: Clinton/White House “Tehran Not Building Weapons”
Iran Document: Fatemeh Karroubi “My Family Will Continue to Stand for the People’s Rights”
The Latest from Iran (17 February): Psst, Want to See Something Important?

1745 GMT: Here We Go. Reuters proves our hypothesis within five minutes with "IAEA fears Iran may be working to make nuclear bomb":

The U.N. nuclear watchdog is concerned that Iran may now be working to develop a nuclear payload for a missile, the agency said in a confidential report on Thursday obtained by Reuters....

"The information available to the agency is extensive ... broadly consistent and credible in terms of the technical detail, the time frame in which the activities were conducted and the people and organizations involved," the report said.

"Altogether this raises concerns about the possible existence in Iran of past or current undisclosed activities related to the development of a nuclear payload for a missile."

1. The report can't be that confidential if Enduring America got a copy of it off the Internet earlier this afternoon.

2. There is nothing new in the passage cited by Reuters. The IAEA has said repeatedly that information "raised concerns" about a possible military nuclear weapons programme. That is different from saying that the information establishes that Iran is pursuing such a programme.

(1840 GMT: We might as well whistle in the wind. BBC and National Public Radio in the US are following the leader with "UN Nuke Agency Worried Iran May Be Working On Arms".)

Meanwhile, from the other side, Speaker of Parliament Ali Larijani has taken a swing at "Western pressure": "The Westerners say, 'You have a reactor in Tehran and its fuel should be supplied by us, and you should acquire fuel in the way we want, and give us your enriched uranium as well." And Deputy Speaker Mohammad Reza Bahonar has declared, "If they (Western countries) accept to swap (uranium) simultaneously in Tehran, we will stop the production of 20 percent fuel."

1740 GMT: On the Nuclear Front. Oh, well, you can pretty much put every internal story in Iran into cold storage for 48 hours --- the International Atomic Energy Agency has just released its latest report on Iran's nuclear programme. There's little, if anything, new in substance, but the IAEA's worried tone is likely to feed those who are pushing for tougher action against Tehran. And it most certainly will feed a media frenzy for the rest of the week.

We've posted the conclusion of the report as well as a snap analysis.

1600 GMT: Mousavi-Karroubi Meeting (see 1110 GMT). We have posted the English text of the statement from today's two-hour discussion.

1540 GMT: Confirmed. Norway has granted asylum to the Iranian diplomat, Mohammed Reza Heidari, who resigned his post in January .

1515 GMT: On the Nuclear Front. Worth watching --- the Turks are now reporting back to the US after Foreign Minister Ahmet Davutoglu's talks in Iran on Tuesday. A Turkish website writes that Davutoglu chatted by phone with Hillary Clinton on Wednesday night. Davutoglu will meet US Undersecretary of State William Burns today, and he told reporters, "Turkey's Prime Minister Recep Tayyip Erdogan will discuss this issue with U.S. President Barack Obama."

1420 GMT: Column of the Day. Roger Cohen of The New York Times asserts that, rather than slapping on further sanctions, US authorities should focus on assisting Iranians with access to and dissemination of information: "With the Islamic Republic weaker than at any time in its 31-year history, fractured by regime divisions and confronted by a Green movement it has tried to quash through force, U.S. sanctions are abetting the regime’s communications blackouts."

1315 GMT: What's Mahmoud Saying? Yet another installment in the tough-guy posturing between the US and Iran. From Press TV's website:

Iran's President Mahmoud Ahmadinejad has said the Zionist regime of Israel is so terrified of the Lebanese resistance and people. The Iranian president made the remark in a phone conversation with the Hezbollah Secretary General Seyyed Hassan Nasrallah, ISNA reported on Thursday.

President Ahmadinejad and Nasrallah also discussed the latest developments in Lebanon and the region. He further praised Nasrallah's latest stance on the Israeli threats. "The Zionists are really terrified of the resistance and people in Lebanon and the region," President Ahmadinejad emphasized. "But they (the Israelis) are looking for opportunities to make up for their past defeats in Gaza and Lebanon as they feel their credibility and existence are in jeopardy."

However, the president insisted, "They don't dare to do anything as they are afraid of the consequences."
[He] further underlined the need for maintaining readiness against any potential Israeli threats adding, "If the Zionist regime want to repeat the same mistakes they previously made, they must be gotten rid of once and for all, so that the region will be saved from their nuisance for ever."

1215 GMT: We've posted a second analysis today, this one from Farideh Farhi, of the "Now What?" moment for Iran after 22 Bahman.

1200 GMT: Purging Iran of Mousavi. Kayhan newspaper has called for the removal of Mir Hussain Mousavi’s name from a road and a College of Art in Khameneh, a city near Tabriz.

1150 GMT: Rafsanjani Watch (and Much More). Key MP Ali Motahhari has not only defended Hashemi Rafsanjani, he has used that defence to launch another attack on the President in an interview with the pro-Ahmadinejad newspaper Vatan-e-Emrooz.

Motahhari said that Ahmadinejad, during the Presidential campaign, had insulted Rafsajani and his family on television in front of an audience of 50 million. Rafsanjani, Motahhari continued, was not given even a few minutes to defend himself when he requested airtime.

Motahhari's conclusion? To gain support, Ahmadinejad is ready to destroy "revolutionary characters".

1110 GMT:The Facebook site supporting Mir Hossein Mousavi has a brief Persian-language report, "Mousavi and [Mehdi] Karroubi met with each other; soon we will talk to the people."

1035 GMT: Britain's Channel 4 is featuring a video interview with a former Basij member who claims he was jailed and abused for refusing to beat protesters.

1015 GMT: We've posted, as a response to those who dismiss "human rights" in the consideration of post-election Iran, a concise comment by lawyer and human rights activist Shadi Sadr.

0920 GMT: Economy Watch. The Islamic Republic News Agency has a budget deficit of 6 billion toman (just over $6 million).

0910 GMT: Habibollah Asgharowladi, a leading "conservative" member of Parliament and one of the proponents of last autumn's National Unity Plan, has declared in the pro-Larijani Khabar Online that some politicians "still have the illusion of having a majority", a likely reference to Mir Hossein Mousavi. Asgharowladi advises, "They should wake up."

Khabar, which is carrying out a two-front political campaign against both Ahmadinejad and the Mousavi/Green Movement, also features the comments of MP Esmail Kousari that "Greens are a gift from the USA". He denounces their attempt to rally and insists that the Revolutionary Guard and Basij military were not involved in security on 22 Bahman.

0900 GMT: Soroush "Hold A Referendum". In an interview with Rooz Online, leading Iranian intellectual Abdolkarim Soroush considers the Islamic Republic and "religious democracy", calling for a public referendum on the system of velayat-e-faqih (ultimate clerical authority).

0855 GMT: Karroubi Watch. Add another statement from the Karroubi family. Ali Karroubi's wife Nafiseh Panahi has told Deutsche Welle of the 22 Bahman attack on the Karroubi entourage with pepper spray: "The bodyguards remained mostly around [Mehdi Karroubi] and one of the colleagues noticed that the special guards had captured Ali and were taking him away. Had he not seen this, we would not have know that Ali had been arrested.”

Panahi said that she was told, wrongly, that Ali Karroubi had been taken to Evin Prison: "Honestly I felt better, because we know that Evin is more law-abiding than other detention centers. But when he was released and returned home last night and described his ordeal, we realized what kind of a place he had been kept in.” Panahi added:

After interrogations were over they had told him, to go and thank God that they had asked us to release you, because if you had stayed here over night we would have killed you. His eyes were closed until the last moment. Then they opened the door and throw him onto the street. A car suddenly stopped and took him home.

When Ali Karoubi arrived home, his pants were bloody, his head was cut open, and his hands were so injured that they had given him something to wrap them with. They beat him with a baton, fracturing his arm.

0845 GMT: Your Morning Mystery. In early January, Iran's armed forces loudly declared via state media that they were going to hold a large military exercise in early February to improve "defensive capabilities". Infantry, cavalry, telecommunication, and intelligence units of the Army would be carrying out drills in cooperation with some units of the Islamic Revolution Guards Corps.

Well, it's mid-February, and I must have missed the big show. Did it ever take place? Was the Iranian military merely blowing a bit of smoke (and, if so, wouldn't some folks in Iran have noticed the false declaration)? Or were the exercises planned, presumably at a great deal of expense, and then cancelled?

Any answers, especially, from the Iranian Armed Forces, welcomed.

0830 GMT: And A Very Big Diversion. I am not sure the Obama Administration thought through the results of this week's combination of Hillary Clinton's tough talk on Iran "dictatorship" and the visit of Admiral Mike Mullen, the Chairman of the Joint Chiefs of Staff, to Israel.

Here's one Washington may want to note. The Chief of Russia's Armed Forces General Staff, General Nikolai Makarov made his own grand declaration on Wednesday, warning that the US could strike Iran if it gets out of its current commitments in Iraq and Afghanistan.

That's an easy read: Russia reassures Iran, even as it is delaying the sale of S-300 missiles (partly in response to an appeal by Israeli Prime Minister Benjamin Netanyahu), that it is watching Tehran's back. And it warns the US Government to chill out a bit on the regional posturing.

[youtube]http://www.youtube.com/watch?v=BHaZzJE7C14[/youtube]

0820 GMT: Meanwhile, beware of distractions, notably those of "Nuclear Watch". Iranian state media throws up the latest diversion, quoting Turkish Parliament Speaker Mehmet Ali Sahin in a meeting with Iranian Education Minister Hamid-Reza Hajibabaie in Ankara: "Turkey will continue its support for the peaceful Iranian nuclear program. All the countries have the right to develop nuclear technology for peaceful purposes and Turkey has a clear policy regarding nuclear programs."

That's a cover for the more news-worthy but less convenient episode of Turkish Foreign Minister Ahmet Davugotlu's mission to Iran on Tuesday. With no break-through on a deal for uranium enrichment, it's the minor encounter (what role would an Education Minister have in Iran's nuclear programme?) that gets played up. Loudly.

0800 GMT: A busy Wednesday means that we now have several fronts to cover as the post-election conflict takes on new shapes in Iran.

There's "Economy Watch", which is an umbrella term to cover the renewed "conservative" challenge to President Ahmadinejad. For the moment, it appears that those who have been unsettled for months and who have been planning for weeks to push aside Ahmadinejad will focus on the President's budget and alleged economic mismanagement for their attacks. (There will be a significant exception in MP Ali Motahhari, who is now the point man to put wider demands, all the way to release of political prisoners.)

There's "Rafsanjani Watch". With the Government and its supporters still fearing that former President Hashemi Rafsanjani will "choose a side" and come out in direct opposition to Ahmadinejad, attacks on Rafsanjani have been stepped up in the last 48 hours. This front, for the moment, is likely to be more of a skirmish than an all-out battle: Rafsanjani will take cover in declared loyalty to the Supreme Leader. (Watch out, however, for the activities of Rafsanjani's children, notably his daughter Faezeh Hashemi. Yesterday they expressed open sympathy with the Karroubi family after the attack on Mehdi Karroubi's son Ali on 22 Bahman.)

And there's "Karroubi Watch". Count up the statements and letters to Ayatollah Khamenei in the last five days: Mehdi Karroubi, his wife Fatemeh, his son Hossein, even the mother-in-law of Ali Karroubi. No coincidence for me that a group, the "Sun Army", would try and silence the Karroubis by hacking the website Saham News, which is still rebuilding this morning.

None of this is to ignore the Green Movement as it considers its next moves. We have an analysis by Nazenin Ansari this morning.