United States Institute of Peace

The Iran Primer

Rouhani at 100 Days: Few New Freedoms Yet

Hanif Kashani and Garrett Nada

            Iran’s new government has taken only token steps to restore basic freedoms or open up politically during Hassan Rouhani’s first 100 days in office. The cleric had campaigned on an ambitious platform that included free speech, release of political prisoners, and gender equality. He generally pledged to “break this security atmosphere.”
            “A successful domestic policy means peace of mind, security, prosperity,” he said in the June 7 presidential debate. “Freedoms should be protected.”
            After his inauguration, the government announced release of some 80 political prisoners in September, but by November only half had actually been freed. The United Nations reported in October that “hundreds of other prisoners detained solely for exercising their freedom of expression, association and assembly” remain jailed. Up to 800 political prisoners and prisoners of consciousness may be behind bars in Iran, according to an investigation by The Guardian.
            The most telling case involves the detention of Mir Hossein Mousavi and Mehdi Karroubi, two presidential candidates in 2009 who led protests against the disputed reelection of former President Mahmoud Ahmadinejad. Hardliners charged them with sedition, although they have never been tried.
 
      The slow pace of change has begun to alienate some of Rouhani’s supporters. After visiting Karroubi’s family on October 29, reformist leader and former interior minister Abdollah Nuri warned Rouhani, “Do not forget the substantial amount of supporters who voted for you because they are fed up with lawlessness, the violation of civil rights, harassment, and the narrow-mindedness of them [government officials].”
 
 
            The failure to deliver has also sparked growing criticism from the human rights community. “President Rouhani has an immense responsibility to uphold his promises to protect citizenship rights and use all means at his disposal to stop this latest onslaught against civil and human rights,” said Hadi Ghaemi, executive director of the International Campaign for Human Rights in Iran. “His silence in the face of such an affront is emboldening hardliners in the Judiciary and Intelligence who insist that Rouhani’s election will not change the status quo.”
 
Human Rights
            During the presidential campaign, Rouhani repeatedly pledged to work for the release of political prisoners. At a June 1 rally, his supporters chanted “Political prisoners must be released!” Rouhani replied, “Why just political prisoners? Let’s do something in which all prisoners [of conscience] will be released!”
            The judiciary, intelligence agencies and national security apparatus all play roles in arrests and trials, but the presidency has influence both through its popular mandate and a seat on the Supreme National Security Council. Since Rouhani’s inauguration, a handful of notable prisoners of conscience have been released, including human rights lawyer Nasrin Sotoudeh and journalist Isa Saharkhiz. Student activist Majid Tavakoli, jailed since the 2009 protests, received a temporary furlough from prison in October.
            Yet the Rouhani administration has not prevented new arrests or executions. Nobel Peace Prize laureate Shirin Ebadi dismissed government promises as “a big lie. Twelve or thirteen people have been released but these are people who had served their time,” she told the Associated Press in November.
            Recent high-profile arrests include actress and activist Pegah Ahangarani (below), who was sentenced to 18 months  in October on security charges. She campaigned for Rouhani as well as 2009 presidential candidate Mir Hossein Mousavi. Human rights groups also reported that at least 125 executions had been carried out between Rouhani’s election in June and his first three months in office.
 
Presidential Candidates
            The continued detention of former presidential candidates Mir Hossein Mousavi and Mehdi Karroubi is the most visible example of Rouhani’s failure on human rights. Both men worked closely with Rouhani in the 1980s, during the revolution’s first decade, when Mousavi was prime minister and Karroubi speaker of parliament. The opposition leaders (below) have been under house arrest since February 2011 for leading the Green Movement protests that challenged former President Mahmoud Ahmadinejad’s 2009 reelection.
            During the presidential campaign, Rouhani promised action. “I don’t think it will be difficult to bring about a condition in the next year where not only those under house arrest but also those who have been detained after the 2009 election will be released,” Rouhani said in May.
      Hopes for the Mousavi and Karroubi’s release were dampened in late October. Mousavi’s daughters were attacked by female guards after visiting their father and mother. Nargess Mousavi wrote about the encounter on her Facebook page:
      “We couldn't believe it at first, but she [the guard] unabashedly repeated her demand [to search the daughters], even saying she wanted us to take off our underwear. To try and describe her treatment of us defies basic human decency. After refusing to take off our underclothes, she attacked us and smacked both my sister Zahra and myself in the ear with a great deal of force.”
            Rouhani’s silence on the incident prompted harsh criticism from some prominent supporters. “Our first condition was for you to try to release all political prisoners, particularly to end the house arrest of Mousavi and Karroubi,”Ayatollah Ali Mohammad Dastgheib was quoted as saying on opposition websites. Dastgheib is a member of the Assembly of Experts, the powerful body charged with overseeing Supreme Leader Ayatollah Ali Khamenei.
 
Gender Equality
            Rouhani’s campaign platform promised women “equal rights and equal pay,” including equal opportunities for men and women in senior government positions. He also pledged financial support for female heads of households and promised to create a ministry of women’s affairs. In contrast, conservative candidate Saeed Jalili argued that the “main role for a woman is to be a mother.”
            During his first 100 days, Rouhani did appoint women to some prominent positions, including two vice presidencies. Elham Aminzadeh is vice president for legal affairs. Masoumeh Ebtekar is vice president and head of the Environmental Protection Organization. At the foreign ministry, Marzieh Afkham is Iran’s first female spokesperson. He vowed to appoint many more. “You’ll see women active everywhere,” Rouhani said during his New York visit in September (video below).
 
            Although he is a cleric, Rouhani also criticized police enforcement of Iran’s strict Islamic dress code, which requires women to cover their head and shoulders. “If there is a need for a warning on the hijab issue, the police should be the last to give it,” he told police academy graduates in October. “Our virtuous women should feel safe and relaxed in the presence of the police,” he added.
            But Rouhani is now trapped between hardliners who are pushing back on gender equality and women who want him to move further and faster. The Association of Iranian Women demanded that Rouhani address women’s issues and treatment of “feminism as a taboo subject” within the first 100 days of his presidency. “There is no excuse for the president to claim he is powerless to advance women’s rights in Iran,” prominent human rights lawyer Mehrangiz Kar told the Brookings Institution in October.
 
Academic Freedom
             During the campaign,Rouhani promised greater freedom of expression, especially on university campuses. In the June 5 presidential debate, he condemned the forced retirement of professors and expulsion of student activists since nationwide protests in 2009. His Twitter account even chastised hardline candidate Saeed Jalili, a close associate of former President Ahmadinejad.

             Since taking office in August, Rouhani has continued to press for more freedom in universities. “It would be a shame if professors could not express their opinions,” Rouhani saidat Tehran University on October 14. “University officials should respect freedom of expression, and we should not be involved in the bad and inappropriate tendency of sending teachers into early retirement. I call on the security services to pave the way to that diplomacy and to trust professors and students."
            In September, Rouhani dismissed Sadreddin Shariati, the president of Allameh Tabatabai University, for his role in the dismissal of faculty and politically active students. Shariati had also tried to segregate coed classrooms.
            But little has actually changed. The government also has not reversed policies that prohibit women from enrolling in 77 fields of study —including engineering, accounting, education, counseling, and chemistry— or that replace women’s studies curricula with courses on women’s rights in Islam at universities, according to a U.N. report in October. The government has also not canceled quotas that favor admission of men to universities. Few of the roughly 1,000 students who were expelled after the 2009 protests have been allowed to return to school, according to Nobel Peace Prize winner Shirin Ebadi.
 
Hanif Z. Kashani is a consultant for the Woodrow Wilson International Center for Scholars Middle East Program.
 
Garrett Nada is the assistant editor of The Iran Primer at USIP.
 

 

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Gallup: Most Iranians Say Sanctions Hurting

            Some 85 percent of Iranians said international sanctions have hurt their livelihoods, according to a new poll by Gallup World. Half of respondents said they have been hurt “a great deal.” A higher percentage of Iranians said that sanctions had hurt the country overall. Since early 2012, punitive measures have reduced Iranian oil exports by about 60 percent. And the soaring inflation rate has dramatically increased the cost of living for many Iranians.  
            Despite the economic burdens, 68 percent of Iranians said their country should continue to advance its nuclear power program. The following are excerpts from the new poll report.

           
           Despite the perceived economic toll, two in three (68%) Iranians say their country should continue to develop nuclear power despite the scale of sanctions against Iran. This higher support in the face of international pressure highlights the role Iranian nationalism plays in the nuclear standoff with the West. Support is lower when Iranians are asked if they approve or disapprove of their country developing nuclear capabilities for military (34%) and non-military purposes (56%).
           In a previous poll, Iranians held the United States chiefly responsible for the sanctions, with nearly half of Iranians (46%) pinning these sanctions on Washington. Another 13% considered their own government most responsible, followed by 9% who blamed Israel, and 6% each who blamed Western European countries and the United Nations.
 
           
 
 
 
 
 
 
 
 
 
 
 
 
 
            Iranians' blame has been similarly placed each time Gallup has asked this question in 2012 and 2013. Looking at the combined results of the two surveys, Iranians who blame their own government are significantly less likely than those who blame external actors to say that Iran should continue to develop nuclear power in the face of continued sanctions (39% vs. 76%).
 
Click here for the full report.
 

US, Iran Share Goal: Push Back Hardliners

     
      Ahead of new diplomatic talks, top U.S. and Iranian officials are scrambling to push back hardliners opposed to a nuclear deal. Tehran and the world’s six major powers are scheduled to meet from November 7 to 8 for the second time since President Hassan Rouhani took office.
       The previous negotiations, held onOctober 15-16 in Geneva, prompted a backlash from conservatives in both the United States and Iran. Some Iranian conservatives doubted U.S. honesty in negotiations. “We must never compromise with the United States," former nuclear negotiator and 2013 presidential candidate, Saeed Jalili, told crowds at a rally commemorating the 1979 takeover of the U.S. Embassy in Tehran on November 4. Many U.S. lawmakers vocally opposed compromise on sensitive issues like Iran’s right to enrich uranium.
            In an October 28 meeting with lawmakers, Rouhani basically appealed for more domestic support for his diplomatic agenda. “Stronger support inside will empower the government to proceed with the campaign against sanctions,” said the president.
            On November 3, Supreme Leader Khamenei boosted Rouhani’s efforts by publically endorsing the president’s negotiating team, led by Foreign Minister Mohammad Javad Zarif. “They have a difficult mission, and no one has the right to weaken an official who is doing his job,” said Khamenei. The supreme leader’s office also posted a decades-old photograph of Rouhani (center) with Khamenei (left) emphasizing the administration’s loyalty to the Islamic revolution, including the negotiators.
            President Obama has faced the same challenge. His administration tried to convince U.S. lawmakers to hold off on new Iran sanctions and give diplomacy a chance. Dozens of senators and representatives had called for tightened sanctions ahead of the last round of talks in Geneva. But a top U.S. negotiator, Undersecretary of State Wendy Sherman, said “This is a time for a pause in new sanctions” in an interview with the Voice of America on October 25.
            On October 31, the White House sent a high-level delegation to Capitol Hill to address lawmakers’ concerns and make the case for delaying sanctions. Secretary of State John Kerry, Vice President Joe Biden and Treasury Secretary Jack Lew held a closed-door session with key Republican and Democrat senators. Senator Dean Heller (R-NV) said Kerry and Lew “were making the argument [for delaying new sanctions], and frankly they’re doing a pretty good job of it,” according to Politico.  
            The following are remarks by top U.S. and Iranian officials who pressed back against hardliners in the run-up to new talks.
Iran
 
Supreme Leader Ayatollah Ali Khamenei
            “No one should see our negotiating team as compromisers. They are our own children and children of the revolution. They have a difficult mission, and no one has the right to weaken an official who is doing his job.
            Nov. 3, 2013 in remarks to students
 
President Hassan Rouhani
            In a November 3 cabinet meeting, President Rouhani emphasized the “unique and unprecedented opportunity” for diplomacy brought about by his election. He noted that “people may differ in their approach” to negotiations but argued that Zarif and his team are advocating for Iran’s rights. Rouhani’s office tweeted translations of his remarks.
            Rouhani also thanked Khamenei for his support in a November 3 tweet.
The United States
 
Under Secretary for Political Affairs Wendy Sherman
  
             “We think that this is a time for a pause [in new sanctions], to see if these negotiations can gain traction… Congress has its prerogatives. We don’t get to control Congress, but we are having very serious discussions. We work as partners with Congress. They’ve been very effective partners as we’ve tried to approach this negotiation. We need them to continue to be effective partners to reach a successful conclusion, and I have trust that they will be.”
             Oct. 25, 2013 in an interview with the Voice of America
 
State Department Spokesperson Jen Psaki
            “We have conveyed that any congressional action should be aligned with our
negotiating strategy as we move forward. So while we understand that
Congress may consider new sanctions, we think this is a time for a pause, as
we asked for in the past, to see if negotiations can gain traction.
“None of those sanctions have been pulled back, as we’ve discussed.”
Oct. 25, 2013 in a press briefing
 
National Security Spokesperson Caitlin Hayden
             “The window for negotiation is not open-ended, and if progress isn't made, there may be a time when more sanctions are, in fact, necessary. We have always said that there would be no agreement overnight, and we've been clear that this process is going to take some time.
             “We feel that it’s important that any new proposals take into account the progress we’re making diplomatically and leave open the flexibility. There’s always time for sanctions in the future as needed, but this is an ask we’re making to Congress now.”
             Oct. 25, 2013 to reporters at the White House
 
 

World Leaders on Upcoming Diplomatic Talks

      World leaders expressed skepticism that the second round of diplomatic talks in Geneva would produce a dramatic breakthrough agreement on Iran’s controversial nuclear program. Even President Hassan Rouhani (left), who reinvigorated diplomacy after his August inauguration, was skeptical. “The government is not optimistic about the Westerners and the current negotiations. But it does not mean that we should not have hope for removing the problems,” he reportedly said on November 4.
      Supreme Leader Ayatollah Ali Khamenei shared the president’s outlook. “I am not optimistic about the negotiations but, with the grace of God, we will not suffer losses either,” Khamenei said on November 3.

            Western leaders were as cautious as their Iranian counterparts. Secretary of State John Kerry expressed a will to test diplomacy while seeming to allude to possible military action if all else fails. “I want to emphasize, President Obama will not take any option off the table in this process, but we do seek to put to test the reality of the possibility of a diplomatic solution,” Kerry said on November 4. E.U deputy foreign policy chief Pierre Vimont noted on October 29 that Iran’s “proactive diplomacy” has yet to “pave the way to major concessions.”
            The following are excerpted remarks by top Iranian, U.S. and E.U. officials on the status of nuclear talks.
 
Iran
 
Supreme Leader Ayatollah Ali Khamenei
            “I am not optimistic about the negotiations but, with the grace of God, we will not suffer losses either… All the better if the negotiations bear fruit but if there are no results, the country should rely on itself.
            “The Americans smile and express desire for negotiation; on the other hand, they immediately say that all options are on the table… We should not trust a smiling enemy.
            “No one should see our negotiating team as compromisers. They are our own children and children of the revolution. They have a difficult mission, and no one has the right to weaken an official who is doing his job.
            “The Americans have the highest indulgence towards the Zionists and they have to. But we do not share such indulgence. The Zionist regime is an illegitimate and bastard regime.”
            “To solve the country’s problems, [we should] look inward. In diplomacy, a successful country relies on domestic capacity.”
            Nov. 3, 2013 in remarks to students
 
President Hassan Rouhani
            “The government is not optimistic about the Westerners and the current negotiations. But it does not mean that we should not have hope for removing the problems.”
            Nov. 4, 2013 in remarks published by the Islamic Republic News Agency (IRNA)
 
            In a November 3 cabinet meeting, President Rouhani was ore optimistic about upcoming talks. His office tweeted translations of his remarks.
 
            “Had it been otherwise, the [nuclear] case would have been settled much sooner and without the ongoing visit and talks… Naturally, reaching agreement and settling all the problems would take time; of course, I hope we will take the initial step to solve the problem by the year-end.
            “Stronger support inside, will empower the government to proceed with the campaign against sanctions.”
            Oct. 28, 2013 in a meeting with lawmakers
           
Foreign Minister Mohammad Javad Zarif
            “On the nuclear issue, I believe the problem we have faced in the last ten years is we have both seen the nuclear issue as a zero sum game; we have articulated two seemingly opposing objectives, and each tried to make gains for one objective seemingly at the expense of the others.
            Tehran will “do everything in our negotiations with the P5+1 [world’s six major powers] to ensure that even the perception that Iran has anything but peaceful intentions for its nuclear program will be removed, because we believe that even the perception that Iran pursues a nuclear weapons program is not only wrong, but dangerous.
            “The result has been that ten years ago, Iran had less than 160 centrifuges spinning, now it has over 18,000. Iran’s economy was prospering, now sanctions are hurting the wrong segment of the population. I hope we have come to understand that approach was wrong.
You “cannot kill all our scientists and kill our program. …You cannot destroy the technology. How to ensure [the program] is peaceful: allow it operate in a transparent fashion; you cannot push it under the rug.”
            “I believe leaders need to show leadership [on the nuclear dispute]. I think experience shows, once there is a good deal, the U.S. president will be able to sell it, and I think we will be able to sell it too.”
            Nov. 1, 2013 in a speech at the Pugwash Conference in Istanbul, Turkey
 
The United States
 
Under Secretary for Political Affairs Wendy Sherman
            “We do not approach this [dispute] on the basis of trust because we know there's great deal of mistrust on both sides.”
            “We have not offered any sanctions relief on Iran, and we have not removed any sanctions.”
            “If we can, in fact, stop the program from advancing further while we negotiate a comprehensive agreement and offer very limited, temporary, reversible sanctions relief but keep in place the fundamental architecture of the oil and banking sanctions — which we will need for a comprehensive agreement, not for a first step — then I think we are starting to make progress… No deal is better than a bad deal.”
            Nov. 1, 2013 in an interview with Israel Channel 10
 
Secretary of State John Kerry
            “Finally, on Iran, let me reiterate the position that President Obama has made clear many times:  The United States will not allow Iran to acquire a nuclear weapon.  That policy has not changed.  President Obama has stated again and again that our preference is to resolve this challenge peacefully, through diplomacy, and we are committed to giving diplomacy a real chance to succeed.  And while this window is open, while we are testing whether Iran is willing to take the steps required to satisfy the international community’s concerns, the burden remains squarely on Iran to demonstrate through credible and verifiable action that its nuclear program is indeed, in fact, peaceful and only peaceful.
            “We state clearly:  Words will not satisfy this.  It’s only actions that will speak to our concerns.  We believe that no deal is better than a bad deal.  That won’t change.  And I want to emphasize, President Obama will not take any option off the table in this process, but we do seek to put to test the reality of the possibility of a diplomatic solution.”
            Nov. 3, 2013 in remarks with Saudi Arabian Foreign Minister Saud al Faisal
 
President Barack Obama
            “I shared with the [Iraqi] Prime Minister [Nouri al Maliki] our efforts to resolve the Iranian nuclear issue in a peaceful way, but emphasized to him how important it is that Iran seize this opportunity to take the right path in accordance with previous international norms and resolutions.  My hope is, is that we can arrive at a resolution, but I emphasized to the Prime Minister how serious we are about preventing a nuclear arms race in a region that would only add to the dangers that so many people there already face.”
            Nov. 1, 2013 after a meeting with Iraqi Prime Minister Maliki at the White House
 
 
The European Union
Pierre Vimont, Secretary-General of the European External Action Service
            “The new Iranian negotiators have undoubtedly adopted a new approach, but it is still rather difficult to conclude that they have presented a new policy. The Iranian team has definitely decided to go for a very proactive diplomacy, but whether this will pave the way to major concessions on the substance of these talks remains to be seen. So far, the Iranian side has made a rather comprehensive presentation combining what could be seen as the endgame of the present talks and, at the same time, what can be depicted as the first mutual moves that both sides could agree on in an effort to engage in some confidence-building measures.”
            Oct. 29, 2013 in an interview with Al Monitor

 

US Report: Sanctions Biting Harder

            The Congressional Research Service periodically releases a comprehensive report on Iran sanctions impact. The following are excerpts from the latest update with a link to the full text at the end.
 
Summary
 
            Increasingly strict sanctions on Iran—sanctions that primarily target Iran’s key energy sector and its access the international financial system—have harmed Iran’s economy to the point where Iran’s public and some of its leaders appear willing to accept some international proposals to limit Iran’s nuclear program to purely peaceful purposes. The June 14, 2013, election as president of Hassan Rouhani, who ran on a platform that included achieving an easing of sanctions, is an indication of the growing public pressure on the regime.
 
•Oil exports fund nearly half of Iran’s government expenditures, and Iran’s oil exports have declined to about 1.1 million barrels—less than half of the 2.5
million barrels per day Iran exported during 2011. The causes of the drop have been a European Union embargo on purchases of Iranian crude oil and decisions
by other Iranian oil customers to obtain exemptions from U.S. sanctions by reducing purchases of Iranian oil. Twenty countries that buy Iranian oil have exemptions.
 
•The loss of revenues from oil, coupled with the cut-off of Iran from the international banking system, has caused a sharp drop in the value of Iran’s currency, the rial; raised inflation to over 50%, reduced Iran’s reserves of foreign exchange; and caused much of Iran’s oil revenues to go unused in third-country accounts. Iran’s economy shrank slightly from 2012 to 2013 and will likely do so again during 2013. There have also been unintended consequences, including a shortage of some advanced medicines.
 
•Iran has tried, with mixed success, to mitigate the effects of sanctions. Government-linked entities are creating front companies, and Iranian importers and exporters are increasingly using barter trade and informal banking exchange mechanisms. Iran is also increasing non-oil exports or exports of hydrocarbon products other than crude oil, such as gas condensates. Affluent Iranians have invested in—and driven up prices for—real estate and securities listed on the Tehran stock exchange.
 
            Sanctions might also be slowing Iran’s nuclear and missile programs by hampering Iran’s ability to obtain needed foreign technology. But U.S. assessments indicate that sanctions have not stopped Iran from developing new conventional weaponry indigenously. Based largely on its provision of arms to the embattled Assad government in Syria, Iran is also judged as not complying with U.N. requirements that it halt any weapons shipments outside its borders. And sanctions do not appear to have altered Iran’s repression of dissent or monitoring of the Internet.
            Some in Congress believe that economic pressure on Iran needs to increase. In the 112th Congress, the Iran Threat Reduction and Syria Human Rights Act of 2012 (P.L.112-158) made sanctionable the shipping of Iranian crude oil, and it enhanced human rights-related provisions of previous Iran-related laws. A provision of the FY2013 National Defense Authorization Act (P.L. 112-239) sanctions transactions with several key sectors of Iran’s economy. A bill in the 113th Congress, H.R. 850, passed by the House on July 31, 2013, would, among other provisions, accelerate the oil purchase reductions required to maintain a sanctions exemption. However, some argue that new sanctions should not be imposed until Rouhani’s diplomatic overtures on the nuclear issue are tested and that there be consideration of easing sanctions if a nuclear deal is reached.
 
Effect on Iran’s Nuclear Program Decisions and Capabilities
            By all accounts—the United States, the P5+1, the United Nations, the International Atomic Energy Agency (IAEA)—Iran has not complied with the applicable provisions of the U.N. Security Council resolutions requiring that outcome. Five rounds of P5+1—Iran talks during 2012 and thus far in 2013, the latest of which took place in Almaty, Kazakhstan during April 5-6, 2013, produced no breakthroughs.
            Some experts are adopting the view that sanctions might have compelled a change in Iran’s nuclear approach. On June 14, 2013, Iranians elected the relatively moderate mid-ranking cleric Hassan Rouhani as President; he ran on a platform of achieving an easing of sanctions, and outcome likely only in the event there is a nuclear compromise. Since his election—and particularly during his September 23-27, 2013, visit to the U.N. General Assembly meetings in New York—Rouhani has stressed that Iran seeks a nuclear settlement, possibly within six months. He accepted a phone call from President Obama on September 27, 2013, in which the two countries agreed to direct their teams to seek a settlement of that issue.
 
Counter-Proliferation Effects
            A related issue is whether the cumulative sanctions have directly set back Iran’s nuclear efforts by making it difficult for Iran to import needed materials or skills. Some U.S. officials have asserted that, coupled with mistakes and difficulties in Iran, sanctions have slowed Iran’s nuclear efforts by making it more difficult and costly for Iran to acquire key materials and equipment for its enrichment program. However, International Atomic Energy Agency (IAEA) reports have said that Iran’s capacity to enrich uranium more rapidly continues to expand, as does its stockpile of 20% enriched uranium. And, Director of National Intelligence James Clapper testified on March 12, 2013, that Iran “is expanding the scale, reach, and sophistication of its ballistic missile arsenal.”
 
 
Effects on Iran’s Regional Political and Military Influence
            Sanctions do not appear to have materially reduced Iran’s capability to finance and provide arms to militant movements in the Middle East and to Syria. Extensive Iranian support to Syrian President Bashar Al Assad appears is continuing, by all accounts. Some press reports, quoting the U.N. panel of experts, say Iran has been exporting arms to factions in Yemen and Somalia. Iran’s arms exports contravene Resolution 1747, which bans Iran’s exportation of arms.
 
General Political Effects
            Some experts assert that sanctions could accomplish their core goals if they spark dissension within the senior Iranian leadership or major public unrest. During 2011-2013, there was a split between then President Ahmadinejad and Supreme Leader Ali Khamenei, but the rift was driven primarily by institutional competition and differences over the relative weight to attach to Islam or to Iranian nationalism—not sanctions.
            Most of the candidates permitted by the regime to run for president in June 2014 were conservative allies of Khamenei, but the support of Iranians who want significant change powered the most moderate candidate in the race, Rouhani, to a first round victory. The Supreme Leader welcomed Rouhani’s election and has publicly affirmed that he backs, at least for now, Rouhani’s approach to settling the nuclear issue. However, it is possible that differences between
            Rouhani and the Supreme Leader will emerge over potential compromises with the P5+1 and possibly on other issues such as the potential easing of domestic social restrictions. At the popular level, since 2012, there has been labor and public unrest over escalating food prices and the dramatic fall of the value of Iran’s currency. However, public strikes and demonstrations have been sporadic and do not appear to threaten the regime
 
Human Rights-Related Effects
            U.S. and international sanctions have not, to date, had a measurable effect on human rights practices in Iran. Executions increased significantly in 2012, according to the State Department (human rights report for 2012, released April 19, 2013), but that is likely a result of a continued crackdown against opposition activity. Nor has the regime’s ability to monitor and censor use of the Internet and other media been evidently affected to date, even though sanctions have caused several major firms to stop selling Iran equipment that it could use to for those purposes.
 
Economic Effects
            Many experts attribute Rouhani’s attempts to settle the nuclear issue to the dramatic toll sanctions have taken on Iran’s economy. Before taking office, president Rouhani received briefings on the Iranian economy from the outgoing Ahmadinejad economic team, and said that the economy was in worse shape than that portrayed by the outgoing administration. However, analysis by some U.S. experts, and assertions by some Iranian officials, suggest that Iran may be adjusting to the sanctions and mitigating their economic effects more successfully than has been thought by experts.Indicators of the effect of sanctions and mismanagement on Iran’s economy include
 
•Oil Export Declines. Oil sales have accounted for about 80% of Iran’s hard currency earnings and about 50% of government revenues. As noted in Table 2,
sanctions have driven Iran’s oil sales down nearly 60% from the 2.5 mbd of sales in 2011. This drop is expected to reduce Iran’s revenue from crude oil to about $35 billion in 2013, down from over $100 billion in 2011.
 
• Falling Oil Production. To try to adjust to lost oil sales, Iran has been storing unsold oil on tankers in the Persian Gulf and it is building additional storage tanks on shore. Industry reports in June 2013 indicated Iran might have as much as 30 million barrels of crude oil in floating storage. The storage represents an attempt to keep up oil production because shutting down wells risks harming them and it is costly to resume production at a shut well. However, Iran’s oil production has fallen to about 2.6 - 2.8 mbd from the level of nearly 4.0 mbd at the end of 2011.
 
•Hard Currency Depletion. Not only have Iran’s oil exports fallen by volume, but it is no longer receiving easily usable and transferrable hard currency for its oil.
As of February 2013, as noted, oil customers must pay Iran in local currency—a sanction that is reportedly causing about $1.5 billion per month to pile up in foreign accounts (out of about $3.4 billion in the value of oil sales).Iran is unable to repatriate those funds, and it reportedly is having trouble identifying a sufficient amount of goods in those countries to import to make use of that balance. The IMF estimated Iran’s hard currency reserves to be about $101 billion as of the end of 2011, but estimates indicate the reserves have fallen to $60 billion to $80 billion as of October 2013.
 
•GDP Decline. Sanctions have caused Iran to suffer its first gross domestic product contraction in two decades. Many businesses are failing and there are a
large number of non-performing loans. An IMF global report issued in April 2013 said that Iran’s economy shrank 1.9% from March 2012-March 2013, and will likely shrink another 1.3% in the subsequent one year period. U.S. officials testified on May 15, 2013 that GDP 2012-2013 would drop even more—about 5% - 8%. The IMF report predicted the economy would return to growth, at about 1%, for the one year after that (March 2014-March 2015). As a consequence of the downturn, the unemployment rate has risen to about 20%, although the Iranian government reports that the rate is 13%.
 
•Currency Decline. The regime has been working to contain the effects of a currency drop, which took the value of the rial on unofficial markets from about 28,000 to one U.S. dollar to about 40,000 during September-October 2012. Prior to that, the rial’s value had fallen from 13,000 to the dollar in September 2011 to 28,000 to the dollar in mid-September 2012. The unofficial rate was about 37,000 to the dollar in May 2013, but optimism over Rouhani’s presidency caused the rial to appreciate to about 30,000 to the dollar by October 2013.
 
•Inflation. The drop in value of the currency has caused inflation to accelerate. An April 22, 2013, government attempt to unify the exchange rate set off a wave of hoarding of key foodstuffs by Iranians who are expecting the prices of those goods to rise sharply. The Iranian Central Bank acknowledged an inflation rate of 31% rate in April 2013, and a 45% rate in late July 2013. Many economists assert that these official figures understate the actual inflation rate substantially, and that is between 50% and 70%. Some assert that inflation has been fed by the policies of Ahmadinejad, particularly the substitution of subsidies with cash payments.
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