United States Institute of Peace

The Iran Primer

Khamenei: Iran Will Not Tolerate US Threats

On May 6, Supreme Leader Ayatollah Ali Khamenei warned that negotiating with the world's six major powers on the nuclear dispute under the shadow of threat” is unacceptable for Iran. “How dare U.S. officials threaten Iran militarily? In 2007, I said that hit-and-run attacks are no longer possible; you will get involved.” Khamenei seemed to refer to a few U.S. officials who recently tried to ease concerns about Iran’s compliance with a potential deal by noting that Washington will always have a military option if necessary:

Secretary of Defense Ashton Carter
“We have the capability to shut down, set back and destroy the Iranian nuclear program and I believe the Iranians know that and understand that.”
—May 1, 2015 in an interview with CNN’s Erin Burnett
 
Secretary of State John Kerry
“I say to every Israeli today we have the ability to stop them if they decided to move quickly to a bomb, and I absolutely guarantee that in the future we will have the ability to know what they’re doing so that we could still stop them if they decided to move to a bomb.  We don’t give one option up that we have today.  We have various options – sanctions, we have a military option.”
—April 30, 2015 in an interview with Israel’s Channel 10 News 
 
Assistant to the President and Deputy National Security Advisor for Strategic Communications and Speechwriting Benjamin Rhodes
“If Iran violates all options are on the table… The president, this president or the next president, will have all options on the table including military one. If there is a violation, all options will be considered.”
—May 4, 2015 in an interview with Israeli television stations
 
Khamenei, who viewed these remarks as threats, reacted in an address to teachers that also covered the crisis in Yemen. The following are excerpts.

“Never allow the other side to impose its will, exercise force, humiliate or threaten you.”

“They [Americans] are deeply in need to make this claim that they have made Iran sit to the negotiating table and imposed certain points on it.”
“Resolving economic problems requires our own planning, will and ability, no matter if the sanctions are in place or not.”
 
“Of course, if the sanctions are removed, the economic problems could be solved more easily, but their resolution will be possible if the sanctions continue.”

American CEOs Eye Iran

Interview with Christopher Schroeder

How often do you travel to Iran?
 
I have gone on two trips to Iran, in spring of 2014 and 2015. They were coordinated by a small group of members of the Young Presidents’ Organization and World Presidents’ Organization — a global network of some 22,000 CEOs. This subgroup, called the Presidents’ Action Network, has done previous trips to conflict areas such as Israel and the Palestinian Territories, India and Pakistan, North Korea and others. The group has organized three trips to Iran in the past three years, and I have attended the last two. About a dozen CEOs from the United States, the United Kingdom and Canada, with a few spouses, went on the 2014 trip. This year, the group was a bit larger — about 24 travelers in all.
 
What is the purpose of these tours? What did you observe?
 
In light of Rouhani's election in 2013, and the broader discussions between Iran and the United States this past year, we felt that this was a perfect time to explore in-person and on the ground what the business and economic climate in Iran is. Little of what we saw is what we are normally exposed to through American news, which tends to focus on areas of political conflict and the nuclear talks. The frame of reference for many Americans is still based on the takeover of our embassy in Tehran, the Islamic revolution and subsequent decades of tense relations — especially during the Ahmadinejad years (2005-2013).  
 
Few of us had a sense for what Tehran looked like — the quality of roads, the quantity of traffic but of newer cars, how most signs are also in English, how couples and families in parks show open displays of affection. We were deeply impressed by the quality of the infrastructure, the talent, and educational skill (especially engineering) of the youth. We were treated with great warmth and respect as Americans in both meetings and random encounters. There was strong pro-deal sentiment — even presumption of a nuclear deal — among virtually everyone we met.
 
Iran is a surprisingly wired country. Nearly 65 percent of homes have broadband access. Mobile penetration is more than 120 percent, meaning people have more than one phone or SIM card. Iranians are now using 40 million smartphones (full mobile computing devices) from brands including Samsung, HTC, a local carrier (all using Android software) and, despite the sanctions, Apple. I was told that there are more than 6 million iPhones in the country, mostly attained through Istanbul and Dubai. 
 
Last year there was very limited access to 3G data on mobile phones, perhaps as low as one million subscribers. We were told mobile carriers in Iran were going to roll this out aggressively in the following year, but we had strong doubts. One year later, however, there are 20 million 3G and now 4G subscribers.
 
Everyone across age categories accesses unfiltered internet through virtual private networks (VPNs). Not only are Facebook and Twitter ubiquitous, but, for the first time, Iranian officials noted to our group that the two social media platforms would be useful market distribution channels for Iranian businesses wanting to reach consumers. Both sites however, are technically banned.  
 
The government runs 32 tech “incubators” around the country, focused on key strategic areas such as agriculture, banking, security, education and infrastructure. There is also a nascent but rapidly growing private startup community, often hosted at universities, where entrepreneurs are creating their own version of successful companies in the West as well as services for the Iranian and regional markets. For example, the eCommerce company Digikala doubled in value since last year to a reported $300 million, and there were Iranian versions of audio books, eBay, travel booking sites and more. Government planners hope that the eHealth space will be worth more than $1 billion in 2017, and that their efforts to lead in mobile payments will “eliminate the need for plastic” (mostly debit cards) in several years.
 
We were told repeatedly that Stuxnet — the computer worm that allegedly targeted Iran’s nuclear program — was a wakeup call for people to start taking technology more seriously. The government invested over $4 billion in high tech infrastructure last year, and has plans for another $25 billion in the next three years.
 
International sanctions on hard goods seemed less concerning to everyone that we met, as almost anything was attainable at a price. Sanctions on banking and the SWIFT global financial service, however, drove the economy to its knees in recent years. Iranians talked about reducing inflation from 50 percent to 14 percent in the last year in large part due to significant currency devaluations — but there was some doubt about that, and the cost has been great. While we saw few signs of abject poverty in Tehran, many people have had to take more than one job in the last year. 
 
Our hotel was packed with Europeans — mainly Germans and Scandinavians — both business types and middle aged tourists. The great stand outs, however, were the Chinese travelers. Even the young people at startups we met said they had seen them. Chinese smartphone producer Xiomi is reportedly making moves to come to Iran’s mobile markets aggressively. Several Iranians told us that 25,000 to 30,000 or more Chinese expatriates are now in Iran, many of whom speak Farsi. But we could not confirm this.
 
Our overall sense is that Iran is one of the most advanced emerging markets we have seen waiting to re-enter the global community. Corruption is quietly mentioned as massive; the fact that people have long worked around systems has bred a strange ethic into the business culture. But the talent, tenacity, and global mindedness were concrete and universal.
 
The greatest take-away from the trip is that the new generation — people under age 35 who represent 60 percent of the country's population — came of age well after the Islamic Revolution. Many were engaged in the 2009 Green Movement protests. Most are utterly wired, and see the world around them daily. Their premises on how they see the world and ambitions are different than their parents. On the current path, the youth do not see themselves attaining their dreams, or even moving out to live in their own apartments. They see increased global engagement as the single greatest hope for self-actualization and economic success.

What are the prospects for American investment in Iran?
 
The prospects are significant. Many American brands have long been popular and accessible there, other, newer brands — often tech enabled like social networks, apps and music — have high demand and are accessible on Iranian mobile devices. From machine tools to software, there is significant opportunity. The travel business will also be significant — as there were very few four or five star hotels in and around some magnificent tourist areas.  

Who have American CEOs met with in Iran?
 
We travelled to Iran as tourists, and visited the remarkable historic and cultural centers near Shiraz, Isfahan and Tehran. But we had a strong focus on understanding the business and political landscape. So we met leading figures in banking, private equity, venture capital as well as some of the very influential heads of conglomerates across diverse industries. We met with members of the art community, and one (albeit reformist) grand ayatollah in Qom. The next generation tech startup communities and recent university grads were particularly interesting to me.
 
There is no question that the majority of what we saw is what the trip handlers wanted us to see, though we were struck by many surprises even in that lens. We were aware of hardliners that oppose more engagement with the West, but we did not meet with any during our trip.
 
We were told that only 500 to 1,000 visas are granted per year to American travelers, and mostly for tourism. But clearly more and more Americans are beginning to seek out opportunities should relationships open up. Many people positioned in Dubai, Istanbul and elsewhere are closely monitoring the situation.

What are potential obstacles to American investment?
 
Right now, beyond the obvious sanctions, they are legion. Rule of law, property rights, and the ability to repatriate capital are among the greatest challenges in emerging markets and are significant in Iran as well. Supreme Leader Ayatollah Ali Khamenei does not have an obvious successor, and that lack of clarity introduces risk. Whether or not reaching an agreement on the nuclear issue opens up the possibility for dialogue on other regional issues remains a central question. There is a sense, at the same time, that entry into the global market is essential to Iranians.
 
What could be the timetable for investment if Iran and the world’s six major powers finalize a nuclear deal by June 30?
 
The timetable would be heavily dependent on the speed of sanctions relief, especially the first wave and its size. Real success in newer markets requires trusted relationships, the time to cultivate them and a sense of co-authorship in transactions. Access to markets through technology and the quality of Iranian infrastructure may make this all move much faster there than in any other new market of the last two decades. But the challenges are significant.
 
Christopher M. Schroeder is a U.S.-focused venture investor and author of Startup Rising: The Entrepreneurial Revolution Remaking the Middle East. He was formerly co-founder of healthcentral.com, which was sold in 2012, and CEO and Publisher of Washingtonpost.Newsweek Interactive. He may be followed at @cmschroed.
 

Photo credits: Modares Expressway by Saeid Zebardast  (cropped) via Flickr (CC BY-SA 2.0), Unofficial Apple store by Robin Wright, Azadi Tower by Maral Noori

Online news media are welcome to republish original blog postings from this website in full, with a citation and link back to The Iran Primer website (www.iranprimer.com) as the original source. Any edits must be authorized by the author. Permission to reprint excerpts from The Iran Primer book should be directed to permissions@usip.org
 

 

Tags: Economy, Trade

Report: Impact of Sanctions on Iran

Sanctions have constricted Iran’s economy and played a role in bringing Iran to the negotiating table over its nuclear program, according to Kenneth Katzman in an updated Congressional Research Service report. International sanctions have caused a decline in Iran’s GDP, oil production and exports, currency value, and industrial production. But sanctions have not caused Iran to improve its human rights record or reduce its support for armed groups in Syria, Iraq, or Yemen. The following is an excerpt from the report.

International sanctions on Iran’s key energy and financial sectors harmed Iran’s economy and arguably contributed to Iran’s acceptance of restrictions on expanding its nuclear program in exchange for modest sanctions relief. The interim nuclear agreement (Joint Plan of Action, JPA) has been in effect since January 20, 2014, and extended twice (until June 30, 2015) to allow time to translate it into a comprehensive nuclear agreement. The economic pressure caused:
 
  • Iran’s crude oil exports to fall to about 1.1 million barrels per day (mbd) at the end of 2013, from about 2.5 million barrels per day Iran in 2011. The crude oil exports are capped at the 1.1 mbd level by the JPA.
  • Iran’s economy to shrink by about 5% in 2013 as Iran’s private sector reduced operations. The economy has rebounded only modestly since the JPA sanctions relief went into effect.
Sanctions have constricted Iran’s ability to procure equipment for its nuclear and missile programs and to import advanced conventional weaponry, but have not halted Iran’s provision of arms to the Assad government in Syria, the Iraqi government, and to pro-Iranian factions such as Lebanese Hezbollah or Houthi rebels in Yemen. Sanctions have not altered Iran’s repression of domestic dissent.
 
Under the JPA, Iran has obtained sanctions relief through presidential waivers of several U.S. sanctions laws and authority under several executive orders. The core of the sanctions relief is $700 million per month in access to hard currency from oil sales, plus about $65 million per month in additional hard currency provided to educational institutions for Iranians studying abroad. The JPA caps Iran’s crude oil exports at the pre-JPA level of about 1.1 mbd. The JPA also suspends sanctions on Iran’s auto manufacturing sector and on its sales of petrochemicals. The fall in oil prices since June 2014 has additionally harmed Iran’s economy, perhaps introducing an additional incentive for Iranian leaders to negotiate a comprehensive nuclear deal.
 
According to an April 2, 2015, framework for a comprehensive nuclear accord, a finalized nuclear deal will entail—upon certification that Iran has implemented its nuclear program commitments— easing of U.S., U.N., and multilateral sanctions on Iran’s energy exports and foreign investment in Iran’s energy sector. Sanctions will also be eased on Iran’s financial, shipping, automotive, and other industrial sectors. U.S. sanctions that apply only to U.S. companies and those imposed because of Iran’s support for terrorism or for human rights abuses will not be altered as a consequence of a finalized deal. The Administration has asserted that, in the event of an agreement, it will act on its own authority to suspend most sanctions on Iran and, after testing Iran’s compliance over an unspecified period of time, would request that Congress provide long-term sanctions relief. Legislation in the 114th Congress would impose additional sanctions that would go into effect immediately if diplomacy fails. One bill, S. 615, would prevent the President from suspending U.S. sanctions on Iran pending congressional review of a finalized nuclear deal.
 
Click here for the full report

 

US Tries to Sell Israel on Iran Deal

On April 30, Secretary of State John Kerry told Israel’s Channel 10 News that the United States will not “disappoint Israel” and will only sign a nuclear deal if it closes off all of Iran’s potential pathways to a bomb.  “I say to every Israeli today we have the ability to stop them if they decided to move quickly to a bomb, and I absolutely guarantee that in the future we will have the ability to know what they’re doing,” he said in an interview with Tamar Ish-Shalom in Washington. The following are excerpts.

 
QUESTION:  Mr. Secretary, the U.S., Israel’s obviously strongest ally, is advancing towards an agreement with Iran, a country that has publicly sworn to wipe my country off the map and a country that while negotiating with the West is still funding Hizballah and directing its actions.  Can you understand why some Israelis feel deep disappointment towards the Administration?
 
SECRETARY KERRY:  Well, I can understand why they feel a set of questions and skepticism.  That I understand.  But I don’t think it’s appropriate to feel disappointment because we’re not going to disappoint Israel.  We will never disappoint Israel.  We are not going to sign a deal – I’ll say this again – we will not sign a deal that does not close off Iran’s pathways to a bomb and that doesn’t give us the confidence to all of our experts – in fact, to global experts – that we will be able to know what Iran is doing and prevent them from getting a nuclear weapon.
 
President Obama has absolutely pledged they will not get a nuclear weapon, and I believe that where we are heading will, in fact, protect Israel.  Let me give you an example.  When we started this negotiation, the breakout time – what we call it to get enough fissile material for one bomb – was about two months to three months.  We have pushed that out now, and with this deal, for the first 10 years, we will know that it is one year for that period.  Now I ask you a simple question:  Is Israel safer with two months or one year?  I think the – they started out with a 12,000 kilograms of a stockpile of enriched material.  Under our agreement, that will be reduced by 98 percent to 300 kilograms for that 10-year period.  Now, there are a lot of the assurances and visibility on their program that aren’t for 10 years.  They’re for 15, they’re for 20, they’re for 25, and they’re forever, forever.  And the forever alone gives us, we believe, the capacity to know what Iran is doing.  We will not disappoint Israel.
 
QUESTION:  What many Israelis are asking themselves is what would happen in 10 to 15 years when the agreement expires and Iran will be a step from obtaining military nuclear capability. I mean, can one really guarantee that that won’t happen?
 
SECRETARY KERRY:  Well, let me tell you exactly what happens here.  Countries in the world that are signatories to the Nonproliferation Treaty have the right to peaceful nuclear power.  That’s why they signed the Nonproliferation Treaty.  Now we are going to put Iran to an extraordinarily rigorous test as to whether or not they are changing their visibility, their accountability, so that we know what they are doing, so that when they become an NPT country full-fledged, we will still know that their program is peaceful. 
 
I say to every Israeli today we have the ability to stop them if they decided to move quickly to a bomb, and I absolutely guarantee that in the future we will have the ability to know what they’re doing so that we could still stop them if they decided to move to a bomb.  We don’t give one option up that we have today.  We have various options – sanctions, we have a military option. We don’t lose any of those.  And in fact, we gain on the visibility into Iran’s program.  We will have inspectors in there every single day.  That is not a 10-year deal; that’s forever there have to be inspections. 
 
And so people need – there’s a lot of hysteria about this deal.  People really need to look at the facts and they need to look at the science of what is behind those facts.  We negotiated with the former Soviet Union.  We had 50,000 nuclear warheads facing at each other.  They were called the Evil Empire.  Even Ronald Reagan was able to negotiate with Gorbachev.  We set up systems where we could verify.  And we proceed – even today with our bad relations that we have right now with Ukraine, we’re still doing the things necessary to adhere to that agreement.
 
So this will be no different.  If we do not believe that – and if Russia doesn’t believe that and China doesn’t believe that and Germany doesn’t believe that and France doesn’t believe it and England doesn’t believe it – if all of these permanent five plus one members of the United Nations don’t believe they can live up to it, we’re not going to sign the deal.  But if we’re satisfied that we have the ability to do this, we ask people to measure carefully what the agreement is, and wait until we have an agreement to make all these judgments.
 
QUESTION:  You mentioned a military option.  Prime Minister Netanyahu repeats again and again, even after the Lausanne agreement, that Israel has the right to defend itself by itself and that all options are on the table.  Can you imagine a scenario in which you wake up one morning and discover that Israel has launched an offensive in Iran?
 
SECRETARY KERRY:  Well, that’s obviously – for the most part, that’s hypothetical until we know what the circumstances are where that choice might or might not be made.  I do not believe, frankly, that Israel – we’ll wake up one morning and find that.  I believe our relationship with Israel is such that the prime minister would talk to us at considerable length, because we would be deeply involved in what would happen as an aftermath and there are huge implications to that.
 
But more importantly, we don’t lose that option here.  If – let me give you an example of what we have here.  We have 25 years of the ability to inspect and track and trace every ounce of uranium that is mined in Iran, every movement of that uranium from the mine to the mill, from the mill to the yellowcake, from the yellowcake to the gas, from the gas to the centrifuge, from the centrifuge out into waste or enriched material.  We will follow every trace of that.  And we have set up very special processes here where we guarantee that if Iran refuses to allow us to watch one of those things, that will be a material breach of this agreement and all the options that we have today are still at our disposal.
 
So we believe that what we’ve put in place here so far – and we have to finalize this.  We don’t have the final agreement yet.  And if there’s a balking at signing that final agreement or they try to move back from the kinds of assurances that we think are necessary to satisfy our friends in Israel, to make sure we can look every Israeli in the eye and say we will know what they are doing and we will stand by you if they break out or try to, and we will not allow them to get a weapon.  And I promise you that will remain the policy of the President of the United States with this deal, without this deal, and way into the future with any other president.  We will not disappoint Israel.
 
QUESTION:  President Obama said to Israelis, “We have your back.”  What does that practically mean?  What kind of assurances will Israel receive?”
 
SECRETARY KERRY:  Well, let me give you an example of what that means.  A lot of Israelis don’t see this, but every week we step up to defend Israel in one fora or another in the world, whether it’s the Human Rights Council in Geneva, whether it’s the UN in New York, whether it’s some other entity in The Hague, at the ICC, whatever it is.  We constantly are voting, working, pushing in order to push back against unfair bias, bigoted, degrading, inappropriate assaults on Israel’s sovereignty and integrity, and we stand up for it.
 
QUESTION:  And that, of course –
 
SECRETARY KERRY:  In fact, we’re even being kicked out of entities at the UN now because we stand up and we have a law that says if the Palestinians do something, then we would not pay our dues.  Well, guess what?  Because of that we’re losing our vote in UNESCO.  We will – and we will no longer, by the way, be able to defend Israel as a result of losing that vote.  So we believe and we’ve asked the prime minister and the Government of Israel, give us a waiver so we can at least continue to be able to defend Israel, because actually this winds up being self-defeating. 
 
QUESTION:  Did you receive an answer on this –
 
SECRETARY KERRY:  We haven’t yet gotten the support we’re looking for to try to be able to get that waiver.  So really, I think it hurts Israel because we’re no longer able to be there.  I mean, we’ve done so many things, including trying to prevent the Palestinians from going to the ICC, trying to argue at the ICC that they’re not a state, and that costs us, believe me, in certain ways.  But we do it because it’s the right thing to do and we stand with Israel.  So I think people need to have some confidence that the administration that designed and deployed Iron Dome that has saved countless thousands of lives in Israel, the administration that has signed an MOU and put $3.1 billion on the table to continue to provide defense, that supported Israel through Gaza and so forth, the administration that designed and deployed a weapon that has the ability to deal with Iran’s nuclear program is absolutely an administration, a government, and a country that will stand by Israel way into the future.
 
QUESTION:  Both Israel and the Gulf states share their concerns regarding this agreement.  But while the GCC leaders were already invited to Camp David in Washington to meet with President Obama and discuss the agreement, Prime Minister Netanyahu hasn’t received an invitation yet.  Why?
 
SECRETARY KERRY:  But no, these are just the Gulf states because we already have a defense arrangement and security guarantees with Israel.  What we are doing now is addressing the concerns of many of the neighbors in the region – which we understand, by the way, and they’re legitimate.  They sit there as Israel does and say, “Well, now, wait a minute.  If the United States is making a deal with Iran on this nuclear deal, are they still going to push back against Iran’s behavior in other ways?”  And the answer is profoundly, to a certainty, yes.  We are going to push back.  We’re not going to take away the embargo on weapons transfer on day one, et cetera.  We’re not going to take away – by the way, that was put in by the UN.  We’re not going to take away the United States Iran Sanctions Act that actually imposes sanctions on them for what they did in our embassy in 19 – when they took over the embassy.  We’re not going to stand by while they play footsie with Hamas or put weapons into one place or another, as we just did where we sent the USS Roosevelt into the Gulf to push back against this flotilla that was traveling from Iran, we knew, with weapons on it.  We’re not going to do – we’re not going to let them do those things.
 
And we want to reassure not just Israel but all of the countries in the region that the United States will defend them, stand with them, work with them in order to push back against inappropriate, unacceptable, law-breaking behavior anywhere where we see it in that region.  And that’s exactly why we’re having the meeting.  I will meet with the ministers of the GCC in Paris in a week or so, and then they will come to Camp David and we will make very clear the United States’ determination to continue – in fact to raise the level, increase the level of pushback against behavior that we deem to be inappropriate.
 
Now let me just ask you something.  That will be necessary – I think you would agree – even if you don’t have a deal, because Iran has been doing everything it’s been doing on very little money even with sanctions.  And the policy of the prior administration to us and leading into the Obama Administration was there should be no enrichment at all.  But they enriched.  They went from 164 centrifuges in 2003 to 20,000 centrifuges, and that’s what I found when I came in as Secretary of State.  They had enough fissile material to be able to make eight bombs.  That’s where we were.  We’ve rolled that back.  We are the first administration to stop their program, roll it back, and begin to put in place restraints going forward.  And we think that’s very significant.
 
QUESTION:  Mr. Secretary, when Prime Minister Netanyahu was asked if he trusts President Obama in an interview to CNN recently, he chose to evade an answer again and again.  Isn’t this maybe more than anything evidence to the low point the relationship has come to that leaders on both sides can’t even publicly declare that they trust one another?
 
SECRETARY KERRY:  Well, I don’t – I didn’t see the interview.  I don’t know what he said or didn’t say, so I’m not going to comment on that except to say to you that I don’t think – I was in the United States Senate for 29 years, left in my 29th.  I had a 100 percent voting record for Israel.  I have great ties to Israel.  And I can tell you, no administration in American history has literally done as much, put as much on the line, worked as hard to try to help Israel in so many ways, from trying to work with the Palestinians on peace efforts a year and a half ago to building Iron Dome, deploying it; to providing the MOU; to providing daily work with our intelligence community, with our military that is still going on notwithstanding any tensions or misunderstandings.  President Obama wants a strong and normal relationship with the government, with the prime minister, with whatever emerges as a government.  We look forward to working with it.  I look forward to traveling there and visiting.  It was going to happen sooner; it may happen now in the next weeks when they get a government.  And I’m confident we’re going to proceed forward with a strong and healthy relationship between the United States and Israel because that’s in our DNA.  It’s not going away.
 
QUESTION:  How would you define the crisis between Netanyahu and the Administration following on the speech in Congress?
 
SECRETARY KERRY:  I don’t think there is a crisis.
 
QUESTION:  There isn’t?
 
SECRETARY KERRY:  No.  I’ve said many times – go back to every statement I made.  I welcomed the prime minister of Israel to come and speak here at any time.  I know there was a flare-up over the notification issue because it came from the speaker’s office, not through the normal process, and that raised a moment of a flurry of speculation.  But I guarantee you there’s nothing that stands between the United States and Israel, and I am confident that the relationship between the President and the prime minister will be viewed as we get a government and move forward now as one that is cooperating on all the critical issues with respect to security, the normal relationship challenges that we face, and our cooperation in order to help stand with Israel in fora where people attack it unfairly and do things that run counter to our values and to our policies.
 
QUESTION:  So there isn’t a lack of trust, a lack of chemistry?  Some commentators even –
 
SECRETARY KERRY:  I don’t get into chemistry.  Look, I’m not here to be a psychologist or psycho-babblist.  My job as Secretary of State is to work with our allies and our friends.  And Israel is a great ally and a great friend, and we will continue to work in the same way I have every day that I’ve been in public life.
 
QUESTION:  A word about the southern – about – excuse me.  A word about the northern border of Israel, which is very tense in the past couple of weeks.
 
SECRETARY KERRY:  Yeah, yeah.
 
QUESTION:  How concerned are you by the possibility of a war erupting in the northern border of Israel with Hizballah?
 
SECRETARY KERRY:  Well, I’m always concerned about what Hizballah is doing.  I mean, I personally traveled to Syria prior to the war, prior to the uprising, in order to challenge Bashar al-Assad with respect to their transfer of SCUD missiles to Hizballah and Lebanon.  And that’s something I did as a United States senator on behalf of the Administration as chairman of the Foreign Relations Committee.  So we have no illusions about why Hizballah is there, who supports Hizballah – Iran, about its activities that are dangerous and provocative.  And Hizballah has tens of thousands – 70, 80,000 rockets.  We’re well aware of that.  It’s one of the reasons why the United States built Iron Dome and it’s one of the reasons why we will stand by Israel.  We need to rid that country of those rockets.  We need to stop that kind of behavior; that is, we need to get the IRGC out of Syria.  We need to end Iran’s support for these kinds of terrorist activities.  And we will, through the GCC enhanced security arrangement that we’re working on and our continued cooperation with Israel, absolutely stand against that kind of behavior.
 
But let me ask you:  Would you rather stand against an Iran that has a nuclear weapon while you’re trying to do that, or that can’t?  We have decided the first priority is take away the ability to have a nuclear weapon.  And that will not change any of our commitment and dedication to preventing all these other terrible scenarios from unfolding.  But I’d rather do it without their having a nuclear weapon than with their having one, and that’s why we are intent on guaranteeing they don’t get a nuclear weapon.  It’s a good starting point, folks.

Click here for a full transcript.

 

Khamenei on Labor Day

On April 29, Supreme Leader Ayatollah Ali Khamenei highlighted the important role laborers play in Iran’s economy. In his address for International Labor Day, Khamenei called for resolving “problems such as delays in paying their salary, dismissals, problems related to providing and the like.” He also argued that sanctions, though effective in some respects, cannot stop a well-organized, national effort to boost domestic production. The key to solving economic problems does not exist in Lausanne, Geneva and New York. It exists inside the country,” Khamenei said. The following are excerpts from his speech. 

Today's meeting with you dear laborers from throughout the country is, in fact, a symbol of our respect for laborers. We have said and continue to say many things in this regard. Today too, we will discuss a number of issues, but the main point is that by holding this meeting, we want to show our respect for laborers and labor. We want to highlight - more than before - the significance of labor in our minds and in the minds of the people of Iran. We should pay attention that all great achievements are made in the shade of labor in its broad sense. Labor is valuable. Thanks to the value of labor, laborers are very valuable in society.
 
There is a well-known narration that the Holy Prophet of Islam (s.w.a.) kissed the hands of a laborer. This is not a mere formality. Rather, it is a lesson. Therefore, we want the value of labor to be appreciated. We want laborers to be respected. We want to draw officials' attention to matters related to laborers such as resolving the problems of laborers and their working environment. There are certain problems such as delays in paying their salary, dismissals, problems related to providing and the like. These are problems that exist at a public level and for the society of laborers. Officials should pay more attention to these matters. This is the purpose of our meeting.
 
What I feel is that from the beginning of the Revolution until today, laborers have really carried out valuable tasks for the country. These tasks are primarily related to the value of labor and laborers, secondly to their presence in difficult arenas of the country in the course of many years and thirdly to their refusal to be deceived by those who wanted to pit laborers against the Islamic Republic from the very first day. Laborers made this great self-sacrifice while they had many problems in different eras. So, laborers have emerged victorious out of this test.
 
As I said, the problems that exist are not solved by talking. It is necessary to take action and to show innovation. Second, the solution to the economic problems of the country should be found inside the country. Production is the spinal cord [of economy]. The spinal cord of the economy of resistance - which we have spoken about before - is strengthening domestic production. If this is done and if our effort is focused on this matter, then labor problems will gradually be solved, labor and laborers will become valuable, everyone will be employed and unemployment - which is a problem in our society - will gradually be reduced and removed. The main basis is production.
 
Some people might say that there are certain prerequisites for the issue of production which you always repeat and stress in your public speeches and in your meetings with officials. They might say that in the current conditions - sanctions and international pressures - it is not possible to boost and strengthen production. I do not deny that the unjust sanctions that the enemies of the people of Iran and the Revolution have imposed on our nation are not ineffectual. Without a doubt, they exert some influence, but I deny that these sanctions can prevent a public, well-organized and well-planned effort for boosting production. I do not agree with this. When I take a look at the country, I see that production has particularly increased in those areas where the enemies have exerted more pressures and imposed more sanctions. This has been achieved because of the efforts that officials and our enthusiastic laborers and youth made. I can witness this. It is in front of everyone's eyes.
 
Compare the present time with 15, 20 or even 10 years ago in terms of the country's achievement in the area of military products. We have made astonishing and mesmerizing achievements in the area of military products. This is while the enemies have exerted more sanctions on the military and these sanctions are not related to this year or last year. They have existed since long ago and they have exerted many pressures, but we made progress. We have also made many achievements in the area of biological sciences and biotechnology while the same restrictions and sanctions existed. Even some well-known universities in the world did not allow Iranian students to take these courses and to make progress in them. Despite what they did, the country has made outstanding and visible achievements in these sciences and everyone can witness them.
 
If those who are curious and want to have information in this regard- these are not confidential matters- they can obtain such information. Another achievement is in new sciences such as nanotechnology. These are among new technologies in the world and no one has helped us in them. From now on too, they are not going to help us. We are advanced in such sciences. Our experts, our youth, our researchers and our scientists are working on them and making great efforts. They have made eye-catching achievements in such areas.
 
They are also working on knowledge-based industries. Recently, an exhibition was held in this Hussainiyah and I met with the youth who are active in these industries. I also visited the different divisions of knowledge-based companies. Of course, I was already aware of their activities and I had received certain reports, but I got a chance to see these people up close. They are making great efforts and moving forward. Today, we have made much progress in the area of knowledge-based companies compared to 10, 15 years ago. All these achievements have been made while we were under sanctions. But if the cruel sanctions of the enemies had not existed, it would have been possible for us to even make more progress. We do not deny this. Of course, there is another probability. We might have shown negligence by ignoring the needs of the country. We might have attended to affairs - by relying on the money that we received from oil, imports and other such things - that do not bring about any progress for the country. This was also possible.
 
We should really pay attention to the fact that part of our achievements was made due to the obstacles that foreigners created for us. We should appreciate the value of this. They did not give us anything and we had to act on our own. When the path of importation becomes wide open and when we import whatever we like, then our desire for self-indulgence draws us towards laziness and idleness. This is another side of the matter. Therefore, when I place emphasis on the issue of production, some people should not say that production is not possible under severe and strict sanctions. This is not the case. It is possible to do so. Whatever you decide to do will be possible if you show determination, bring all your power to the arena and ask Allah the Exalted for His help and guidance. We have tested this.
 
In the present time, we play a leading role in the world in some industries. One example is in the area of building dams. Who in the world helped us reach this point in the area of building dams? Today, Iran is among leading countries in this area. Some companies in western countries build dams at an enormous cost. If Iranian youth were in charge, they would build much better dams at much lower costs. This is an area in which we have made progress. Who helped us in the course of these long years? The same is true of the nuclear issue and many other issues.
 
I believe that the economic problems of the country - the most important of which are matters related to laborers and their unemployment and living problems - will be solved if the issue of production receives attention. We receive and read certain reports about these problems, but attention to production will create job opportunities and it will engender a feeling of dignity and self-reliance. When a country relies on its domestic capabilities, it will feel self-reliant. In the process of becoming self-reliant, we may want to resolve tens of matters with the world, but our power or weakness will make a huge difference when we are at the negotiating table. When you feel powerful, you negotiate in a certain way. When you feel weak, you will negotiate in a completely different way. If the domestic structure of power is solid and firm in all areas - including the economy - then we can negotiate with different sides over all matters. In order to do so, we should negotiate with the other side in a powerful way, not in a way that it displays our needs. This will embolden the enemy and it will encourage him to set terms and say a load of nonsense all the time. I find the cure in this. I say - I said it in the beginning of the year as well - that everyone should focus all their efforts on the issue of production.
 
Of course, this has certain prerequisites. Investors, laborers, consumers and governmental organizations have certain responsibilities. This task is not an individual one. Everyone should cooperate. When we speak about the people's harmony and unanimity with the administration, this is what it means. It means that everyone should cooperate so that they can clear the path of the country from this big boulder [blocking the path].
 
Investors and those who are well-to-do should invest. I knew some individuals who could have invested their money in lucrative businesses which were not related to production, but they did not do so. They said, "We will not do this because we want to render services to the country". They invested in production with less profit because they understood that the country needs it. Well, this is an act of worship. An investor who thinks about the needs of the country, who does not invest his money in speculation or lucrative but harmful businesses and who invests it in production instead is doing a very good deed. Therefore, investors play a major role.
 
Hardworking laborers play a role as well. A laborer who endures the difficulty of work and who dedicates his life, his time and his energy to working properly is, in fact, worshipping God. Work is difficulty anyway. Physical work is a difficult task in life. In my meetings with you dear ones, I have repeatedly cited this narration from the Holy Prophet (s.w.a.): "God bless those who take on a responsibility and do it appropriately". May God show mercy on those who work properly, whether industrial, agricultural or different other types of labor. When work is done properly, one's product will turn out to be perfect. This is the role of laborers which is an act of worship.
 
Fair-minded and conscientious consumers can also help the production of the country. They should not look for famous products and brands only. Some people constantly speak about brands. They should not look for brands and popular models in the world. They should pay attention to the interests of the country. The interests of the country lie in consuming domestic products and helping Iranian laborers. There are some people who chant slogans in favor of laborers and they make extravagant claims, but in practice, they are kicking Iranian laborers. Kicking Iranian laborers means refusing to use the products that our laborers manufacture. It means using foreign products which are sometimes much more expensive.
 
In some industries, we are among leading countries in the world, but some people import the same products from outside the country. This is the responsibility of everyone including the administration. The honorable Minister of Labor is present here. I request that you bring this up and insist on it in the administration. Those products and goods that governmental organizations need and use should not at all be brought from outside the country. This is a major and great matter. Considering the vast scope of its activities, the administration is a number one consumer. Executive officials should not say, "We need such and such a thing urgently, but it does not exist in the country. Therefore, we should bring it from outside the country".
 
Well, do you not plan? If you need it urgently, why do you say it now? You should have said it two years ago so that domestic manufactures would have enough time to plan and to build and test it. This way, you could have it today. These are important, not minor, issues. The administration should prevent itself from using those foreign products which can be manufactured inside the country, ranging from pens and paper on your desks to building materials and other products. It should consider this haraam for itself. Government officials should prevent self-indulgence, the desire for ease and comfort- these are the least of problems that exist- and, God forbid, abuse.
 
We have experienced, tested and witnessed this. Once - many years ago - a task was being carried out in the country. They were building something. I summoned the officials in charge and I asked them not to use any foreign product in what they were doing. They promised to do so and they kept their promise honorably. When we received a report and carried out an investigation in the end, we found out that 98 percent of the materials were produced inside the country. Only two percent did not exist in the country and they imported it. Well, this is possible. So, consumers are one of the major bases of strengthening and promoting domestic products.
 
Another major base is the system of combating smuggling. We have placed great emphasis on combating smuggling. Different administrations have come and gone in the course of these years [but they did not attend to this matter]. Well, this is something that should be done and it is possible. They should not say that it is not. It is completely possible. They should prevent smuggling in a very decisive way. Once I said that the administration should not only pursue the issue of smuggling in our borders. Today, billions of dollars are being allocated to smuggling. Because they release many different figures, I cannot exactly say how much. You should pursue smuggling before and when they enter our borders and when they find their way into shops. This is a very important matter and task. Those who are working on it are doing jihadi work and worshipping God as well. This is also among good religious deeds.
Another important pillar are import-control organizations. These organizations should adopt a careful outlook as well. There are some affairs which are not in the hands of the administration. These tasks are carried out by the private sector and there is no other option. However, governmental organizations can manage them with supervision. They should act in a way that the issue of importation does not harm domestic production.
 
Another issue is the responsibility of promotional organizations and the media. The media can play a role as well. The IRIB and other media should work, in the real sense of the word, on promoting domestic products. All these tasks are effective.
Another issue is the stability of laws. This is the responsibility of the Majlis. They should take care not to change laws related to economic matters - such as matters related to labor - on a daily basis so that it is possible to plan.
 
The cultural officials of the country too should plan cultural work. They should criticize idleness, laziness and avoidance of hard work. Hard work should be endured. If we do not endure hard work, we do not get anywhere. We should not like easy work only. We should endure hard work, wherever it exists. Those who managed to reach a peak in industry, technology and scientific matters imposed hard work on themselves. This requires creating a culture. If we only want to do easy work, things will not move forward.
 
Officials in charge of combating corruption have a role as well. Corruption is frequently spoken about, but this is of no use. If we only shout "thief, thief", thieves do not stop their work. We should enter the arena. The officials of the country are not journalists. It is journalists in newspapers who speak about corruption. You and I who are officials should take action. Why so much talk? You should enter the arena. If we know how to act, we should combat corruption in the real sense of the word.
 
These are our responsibilities. These are the responsibilities of our different sectors. This is the cure for solving the economic problems of the country. If we want to solve the economic problems of the country, we should focus on production. Everyone is responsible in the way that we explained. Of course, some responsibilities are heavier and some are lighter, but everyone is responsible in some way. The key to solving economic problems does not exist in Lausanne, Geneva and New York. It exists inside the country. If everyone works hard and shows diligence, problems will -by Allah's favor - be solved. The people of Iran and the officials of the country have accomplished even greater feats in the course of these years. So, they can also resolve the issue of production. The current administration is thankfully working hard in an enthusiastic way. There are a number of well-informed individuals in the administration. They should make efforts, work hard and pursue the matter. By Allah's favor, they should solve problems.
 
To be fair, the society of laborers in our country is a noble society. The society of our laborers is a noble society. I was completely aware of the efforts that were made - from the very first day of the Revolution and even before the decisive victory of the Revolution - to pit laborers against the Revolution. I was aware of and I witnessed these efforts during the time of those astonishing rallies and demonstrations in the year 1357. I witnessed these efforts up close. The same effort has been made in the course of many years. Even during my presidency and after that, there were some people who wanted to pit laborers against the Islamic Republic, but our laborers have endured problems and shown resistance with complete power, stability and modesty. This is very valuable.
 
The officials of the country should appreciate the value of these great laborers who endure problems and who work hard. The reward for this nobility of character is that everyone should work hard so that by Allah's favor, they can solve their problems. Allah the Exalted too will definitely help those who have good intentions, who do good work and who move towards good goals.
 
Click here for a full translation.
 
 

Connect With Us

Our Partners

Woodrow Wilson International Center for Scholars Logo