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Eye on Iran: Gas Prices Soar in Iran as Subsidy Is Reduced

Eye on Iran: Gas Prices Soar in Iran as Subsidy Is Reduced

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NYT: "Gasoline prices nearly quadrupled on Sunday and the riot police guarded filling stations around the capital as deep cuts in subsidies on fuel and other essential goods took effect. After midnight on Sunday, the price of subsidized gasoline jumped to about $1.44 a gallon from about 38 cents a gallon. Similar increases went into effect for compressed natural gas and diesel fuel, with subsidy reductions for other commodities expected to be phased in gradually. Security forces with riot shields took positions at gas stations in Tehran, bracing for a possible repeat of the unrest that followed the introduction of gasoline rationing in 2007, but there were no reports of violence. President Mahmoud Ahmadinejad announced the long-anticipated subsidy reductions in a live television interview on Saturday night, calling the reform 'a great victory for Iran.' Policy makers have described the program as a 'rationalization' or 'targetization' of Iran's vast and inefficient subsidies system, but some analysts fear it could increase living costs for millions of middle- and low-income households. Mr. Ahmadinejad said that the government was spending $114 billion a year on energy subsidies. 'If we can save one-quarter of that, it will amount to a vast economic transformation,' he said. He said that the prices of water, electricity and natural gas would increase 'gradually,' and that the subsidy for bread would also be gradually eliminated. He predicted that the bottom 60 percent of income earners would be better off under the new plan while the wealthier 40 percent would 'need to economize.'"

"The U.S. and representatives of the European Union have agreed to impose joint sanctions against Iran in January and are considering breaking off talks with the country, as patience with Tehran's nuclear activities wears thin, according to people familiar with the matter. Western officials are discussing making further talks with Iran contingent on Tehran's progress toward compliance with existing United Nations Security Council resolutions, which call on Iran to cooperate fully with the International Atomic Energy Agency, the U.N.'s nuclear watchdog... Some Western officials accuse Iran of playing for time by agreeing to talks but refusing to engage in meaningful negotiations. Senior diplomats from the U.S., U.K. and France met in Paris on Tuesday to chart the new course, amid growing frustration over Iran's obstruction of IAEA inspections. London and Paris help to coordinate policy for the entire EU on Iran. The three nations plan to finalize details of the plan by the end of the year, then deliver the proposal to the EU sanctions committee to get the new measures in place before talks resume in Istanbul."

"Iran is trying to build a nuclear bomb, posing a threat to its neighbors, and the United States is 'very ready' to counter Iran should it make a move, the top U.S. military officer said Saturday. Adm. Mike Mullen, chairman of the Joint Chiefs of Staff, reassured Persian Gulf nations nervous that an increasingly militarized government in Iran might try to start a war. 'The United States takes very seriously our security commitments in the Gulf region,' Mullen said following a meeting with Bahrain's king. Bahrain, directly across the Gulf from Iran, is home to a large U.S. Navy base that would be on the front lines of any war with Iran. 'We're very ready,' Mullen said, an unusually direct acknowledgment that the United States has contingency plans to counter Iran should it make a move. 'There are real threats to peace and stability here, and we've made no secrets of our concerns about Iran.'"

Iran Disclosure Project

Nuclear Program & Sanctions

AFP: "President Mahmoud Ahmadinejad on Saturday hailed this month's Geneva talks on Iran's nuclear programme and reiterated that world powers should cooperate with Tehran rather than confront it. 'The Geneva talks were very good and it is time that they (world powers) change the policy of confrontation to engagement,' he said in a live interview on state television in his first reaction to the December 6 and 7 talks. He said the 'best way' for the two sides was to move towards cooperation. 'We are moving on this path and I hope in the talks in Istanbul and then Brazil and then Tehran, we will reach a framework of cooperation,' he said, suggesting more talks may be held in Brazil and Iran after Istanbul next month. 'This will benefit all, and everyone's face will be saved,' he said."

"The Central Bank of Iran has decided to repatriate an unspecified amount of its deposits from foreign bank accounts, its governor said on Monday, citing global economic conditions as the reason. 'The CBI decided to lower the volume of its foreign deposits and transfer them inward by depositing them at domestic banks,' the official IRNA news agency quoted Mahmoud Bahmani as telling a banking seminar. 'It was agreed these deposits should be used to meet the financial needs of domestic projects through hard currency rather than rials so that the domestic inflation rate would not be aggravated,' he said. Iran has come under tighter economic sanctions since June, aimed at pressuring it to curb its nuclear programme which some countries fear is aimed at making atomic weapons. Some of the measures restrict financial transactions."


Bloomberg: "Iranian President Mahmoud Ahmadinejad will discuss deepening economic ties with Turkey during a visit to the country this week, Sabah said. Ahmadinejad till attend a meeting of the Economic Cooperation Organization, a regional group comprising Turkey, Iran, Pakistan, Afghanistan and Central Asia nations, in Istanbul on Dec. 23, the newspaper reported.  Iran and Turkey signed agreements in October covering trade, agriculture, education, banking and customs regulations, Sabah said." 

Domestic Politics

AFP: "Iran's atomic chief Ali Akbar Salehi officially took charge on Saturday as the Islamic republic's new foreign minister after his predecessor was fired by President Mahmoud Ahmadinejad, media reports said. Iranian media reported that Salehi will be the interim foreign minister until the parliament officials endorses his appointment. Under Iranian law, the president has to submit his nominations for ministerial posts to parliament for approval. Salehi, who continues to head Iran's atomic energy body, took charge officially at a function which was also the farewell ceremony for his predecessor Manouchehr Mottaki who however was not present, media reports said."

"Iran's former foreign minister Manouchehr Mottaki has hit out at his sacking this week by President Mahmoud Ahmadinejad, branding the move both 'un-Islamic and offensive.' 'Sacking a minister while (he is) on a mission is un-Islamic, undiplomatic, offensive and outside the practices of politics,' Mottaki was quoted as saying by the Mehr news agency on Sunday. Ahmadinejad announced his decision to oust Mottaki on Monday while the 57-year-old career diplomat was on an official visit to Senegal. 'I was never told about the appointment of a new person within 24 hours of my departure for the mission,' Mottaki said, referring to a meeting he had with the president on the eve of his departure, Mehr reported."

"Iran has executed 11 people linked to a Sunni rebel group that claimed responsibility for deadly suicide bombing attacks on a Shia mosque last week, it emerged today. The 11 were hanged at dawn in Zahedan, the capital of Sistan-Baluchistan province, in eastern Iran, on Monday. Zahedan is where Jundollah, said to be based in Pakistan, has carried out a series of atrocities in recent years. 'These corrupt and Mohareb [an enemy of God] elements have been identified and arrested by security and intelligence forces,' Ebrahim Hamidi, the head of the provincial justice department, said. The Irna news agency quoted him as saying: 'The sentence was carried out after receiving confirmation from the country's senior judicial bodies.' It was not clear whether those hanged were directly linked to the bombings."

Foreign Affairs

Reuters: "A committee in Iran's parliament voted on Sunday to cut diplomatic relations with Britain, a day after President Mahmoud Ahmadinejad called for 'cooperation' with major powers. The decision by parliament's national security and foreign policy committee, reported by the semi-official Fars news agency, follows criticism by Britain's ambassador to Tehran of Iran's human rights record. 'After voting by the members of the committee, it was decided to have diplomatic relations completely severed with Britain,' Fars quoted lawmaker Mohammad Karami-rad as saying. If the motion is backed by the full parliament it would put pressure on the government to downgrade relations with Britain at a time when a new foreign minister has called for 'positive interaction' with the European Union."   

"A shipment of Iranian arms discovered in Nigeria in October and destined for Gambia, to the chagrin of neighbouring Senegal, has stirred up diplomatic troubles between Tehran, Dakar and Banjul. 'There are many things I will not say on this subject. Diplomacy does not happen in broad daylight,' Senegal's Foreign Minister Madicke Niang told reporters in Dakar last week. The arms cache mystery, which has strained international diplomatic ties, began in July when a ship belonging to the French group CMA-CGM docked in Lagos, Nigeria, offloading containers loaded in Iran's Bandar Abbas port. Officially, the shipment contained construction material, but customs discovered at least 10 containers holding grenades, mortars and heavy weapons ammunition. The trader designated by CMA-CGM as the sender, Iranian businessman Azim Aghajani, took refuge at Iran's embassy in Abuja but was charged along with three Nigerians on November 25 for trafficking illegal arms. According to Nigeria, Aghajani is also a member of Iran's ideological army, the Revolutionary Guards."

"Iranian Supreme Leader Ayatollah Ali Khamenei said on Monday any findings by an international tribunal into the 2005 assassination of former Lebanese Prime Minister Rafiq Hariri would be invalid. 'This tribunal is a rubber-stamp one whose verdict is null and void whatever it is,' state television quoted Khamenei as saying during a meeting with the emir of Qatar. Iran is a supporter of Hezbollah, the Lebanese Shi'ite group which says the tribunal is a tool of Israel aimed at discrediting it by blaming its members for Hariri's murder. Hezbollah and Western diplomats say they expect members of the group to be indicted. Lebanese politicians fear a crisis, and possible relapse into sectarian violence if that happens."

"Interior Minister Mostafa Mohammad Najjar charged on Friday the CIA was involved in the suicide bombing in southeast Iran as the death toll rose to 36. 'From the inspection of equipment obtained from the terrorist elements of this crime, it has become clear that the CIA and other spy agencies were involved,' he was quoted as saying on state television's website. Najjar did not give details. Iran's supreme leader Ayatollah Ali Khamenei, meanwhile, accused the West of working to divide the Muslim world."

Opinion & Analysis

Maziar Bahari in Newsweek: "Roozbeh, a 26-year-old university student in Tehran, considers himself a revolutionary. Never mind that he rarely leaves his room at his mother's house. 'Many people of my generation hate this regime,' he tells Newsweek via Skype, asking that his last name be kept private. He says he spends 14 hours a day dodging government-imposed firewalls to share news with other Iranian cyberactivists inside and outside Iran. His strategy resonates with leaders of the country's opposition Green Movement, who are now shunning street protests in favor of online organizing. Roozbeh scares Iran's current rulers. In public they deny it, of course, dismissing him and his allies as 'losers with no significant power base,' in the words of Iran's leader, Ayatollah Ali Khamenei. But the mockery rings false: in fact, the Revolutionary Guards have grown worried enough to establish a Permanent Soft War Secretariat, dedicated to plugging what the Guards' commander, Mohammad Ali Jafari, calls 'the loopholes in our soft defense mechanism.' The massive demonstrations of 2009 have migrated behind closed doors, unseen by pro-regime Basij thugs, where activists spread the word of resistance via instant message, satellite television, and what authorities fear most: social networking. Their vehicle of choice is Facebook, as evidenced by the Revolutionary Guards-produced cautionary TV program A Monster Called Facebook, in which founder Mark Zuckerberg is depicted as a Zionist spy."

Howard LaFranchi in CSM:
"US foreign policy conservatives are pressing for a new approach to Iran that ramps up support for the Iranian opposition and revives the Bush-era goal of regime change in Tehran. Borne of two catalysts - frustration over President Obama's attempts at engagement with the Iranian regime, and anticipation of the more-Republican Congress taking office in January - the push for a harder line toward Iran looks beyond economic sanctions for pressuring the Tehran regime. Pro-democracy initiatives and overt support for the Iranian opposition are touted as the best way of felling two birds with one stone: Iran's advancing nuclear program, and the regime developing it. The hardliners are more likely to espouse military action against Iran's nuclear facilities, but support for that route is by no means universal among them. Among the top priorities of the members of Congress, former Bush administration officials, and Iran experts touting an overtly anti-regime policy is removal of an exiled Iranian opposition group - the People's Mojahedin of Iran or the MEK (Mujahideen-e Khalq) - from the State Department's list of foreign terrorist organizations. 'Our effort to support freedom in Iran is ... weak and inconsistent at its very best,' says Frances Townsend, former national security adviser to President Bush for homeland security and counterterrorism."

Abbas Milani in The National Interest:
"But this culture war continues to play out in the background of politics-the ethos of the 'conquered' people working quietly but relentlessly to subvert, change and eventually replace the alien culture of their usurping rulers. And this current manifestation was clear during the June 2009 uprising. Once again, that same democratic coalition that formed a foolhardy alliance with the clerical regime-and now numerically stronger than ever but still denied a chance to organize itself politically-came together to invigorate what Khomeini's successor, Ayatollah Ali Khamenei, and his conservative allies hoped would be an anemic presidential campaign by a dour, uncharismatic Mir Hussein Moussavi. But the remarkable surge of social energy in support of Moussavi forced the conservatives to steal the election for Ahmadinejad. And then suddenly, the country's seemingly docile population rose up around a beguilingly simple slogan: Where is my vote? In Tehran alone, 3 million people marched in remarkable discipline to demand their democratic rights. Their slogan pithily captured in a mere four words the hundred-year-old dream of modernity and democracy in Iran. Using thugs and guns, prison and torture, the ayatollah has so far succeeded in intimidating the people back into their homes. But a critical look at the past shows the bleak future of Khamenei and other champions of despotism. Violence can only delay but not destroy the rights of man in a nation that has embraced the cultural ethos of modernity. The hushed, brutalized quiet of today is at best a prelude to the liberating storms of tomorrow."

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