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The Latest from Iran (5 October): The Regime Prays for the Weekend

A discussion on Al Jazeera English's Inside Story of the currency crisis

See also Iran Feature: The Political Propaganda Around An Analysis --- "Economy Is Not on the Verge of Collapse"
Iran 1st-Hand: Life in the Time of a Currency Collapse
EA Video Analysis: Iran --- The Currency Collapse, The Closing of the Bazaar, and Wednesday's Protests
The Latest from Iran (4 October): Protest Resurfaces --- A Ripple or a Wave?

1953 GMT: Currency Watch. Khabar Online claims that, despite favourable exchange rates compared to the open market, the trade of US dollars and Euros in the Central Bank's "trade room" was down by 20% on Thursday.

The Government claims that $100 million is being traded daily in the room, set up to give a discount on the open-market rate to importers and other selected customers.

1833 GMT: Friday Prayer Update (Economy Edition). The Iran Tracker offers extracts from the Tehran Friday Prayer of Ayatollah Ahmad Khatami:

The circumstances in the country are normal and there is no crisis. We do have problems, and will also have them in the future. But there is no crisis....

If you are looking for crisis-ridden countries, take a look at those very countries which sanctioned Iran. Just take a look at the enormous economic and social problems they are facing. Take a look at the United States, where the number of the poor exceeds the entire population of our country. This is not just propaganda; it is based on statistics they themselves release....

What the Global Arrogance tried to achieve during the eight years war [with Iraq, 1980-1988], they want to achieve in the "Imposed Economic War"....The people resisted in that war, and would constantly say. "We will not capitulate." We are experiencing something similar. Today, the people will tolerate this pressure believing in divine promises. The nation has demonstrated that it will not tire under pressure and has experienced harsh conditions....

In circumstances when the enemy has targeted our country's economy, disturbing the country equals aiding the enemy....

While some of the pressure is due to sanctions, we must not ignore other dimensions....Bad policies are also to blame.

Outside Tehran, however, the criticism of the Government was more prominent. Alongside the claim by Mashhad's Ayatollah Alamalhoda of the "betrayal of the people" (see 1447 GMT), Ayatollah Shabestari in Tabriz chided: "Manipulating the foreign exchange rate in order to balance the [budget] deficit created by the cash handout is neither constructive nor logical. The government should show its abilities in the currency issue."

Hojatoleslam Hosseini in Ardakan chided, "The executive branch of the country is in the hands of the president and the cabinet, and it is also the government which is responsible for the rising prices and the economic chaos in the country... Now, the government must attend to the economic woes of the people."

And Isfahan leader Ayatollah Tabatabainejad explained, "The Bazaar protested because of the government's false economic policies. President Ahmadinejad believes people are dumb."

1511 GMT: Economy Watch. Another snapshot of life amid the economic crisis, this time from Golnaz Esfandiari of Radio Free Europe/Radio Liberty:

To get an idea of how average Iranians are coping with the currency crisis, RFE/RL spoke to Hamid (not his real name), a student in his mid-20s who works in a computer shop near Tehran, and to Reza, a 20-something living in Iran's second city of Isfahan.

Hamid says uncertainty, anxiety, and fear of the future have become part of the daily life of many middle-class Iranians and those from the lower strata of society.

"Life has become so difficult," he says with a sigh, lamenting that he and others are struggling to make ends meet.

"We don't know what the future will bring. We actually don't even know how things will be in the next few hours," he says. "Our money has become worthless, affecting all aspects of life."

Iranians feel the sting of the plunging rial when they go shopping. Prices of food staples and other goods, including imported medicines, have doubled or even tripled, in some cases. The price of home appliances and electronic devices has skyrocketed. Prices increase every day, Hamid complains.

"Let me give you a small example," he says. "I bought macaroni sauce for 11,000 rials the other day. The next night, the same sauce was 18,000 rials," he recalls. "When I told the shop owner that I had bought it the night before for 11,000, he said, 'May God bless last night. Do you have any idea how much the price of the dollar has increased since then?'"...

"I eat meat only once every two weeks," Hamid says. "I can't afford it. If you see someone carrying several kilos of meat, you think, 'Wow, he must be rich.'"

The situation is also hurting businesses, including the computer shop where Hamid is employed.

"A very simple printer that used to cost 1.4 million rials now costs 3 million rials. We can barely sell anything anymore. Before, when people's computer mouses would break, they would buy a new one," Hamid says. "Now they want us to repair it because they can't afford to buy a new one. A mouse used to cost about 50,000 rials; now it's about 190,000 rials."

Hamid spoke to RFE/RL on October 3, following a strike at Tehran's main bazaar and clashes between riot police and protesters who were angry about the plunging rial and the inefficacy of the government to deal with the crisis.

He believes more unrest is yet to come. "People can't take it anymore," Hamid says. "This can't last for very long."...

[Reza says] that, despite the misery Iranians are facing, some Isfahanis, including his relatives, remain supportive of the clerical establishment.

"My grandfather is very upset about the rapidly rising prices. But at the same time he says that we have to support this government," Reza says. "When I tell him that the government has turned our life into hell, he still says that we should stand behind the [establishment]. For him, the opposition to the United States is key. He feels that if he doesn't support the government, he would be betraying the martyrs."

In comparison to Hamid, who brings in a modest income, Reza is much better off. He works for a foreign company and gets paid in U.S. dollars. Yet even his purchasing power has significantly decreased because of the ailing economy.

"I go out with friends less than before," Reza says. "I was planning to travel abroad but had to cancel it, and I don't buy expensive clothing anymore. I wear the old ones."

Reza's father receives a modest teacher's salary, and the family pads its income through other sources, such as a shop in the city.

"We were planning to buy some home appliances, including a freezer, but we decided to repair the old one," Reza says. "Before Nowruz (March 21), a freezer was 20,000,000 rials. Now it's 50,000,000 rials."

1447 GMT: Friday Prayer Update. Ayatollah Alamalhoda, the Friday Prayer leader of Mashhad, has used his sermon to challenge the Government:

The day you got votes and claimed you can, did you know this country and people are revolutionary or not? If you knew, then you must be ready to confront any problem that imperiousness [of the US] creates for this nation. If you knew that you can’t, but you told the people you can, then without doubt you betrayed the people of their right."

1234 GMT: Communications Watch. Eutelsat, the European satellite provider, has renewed its appeal to international regulatory authorities to intervene over jamming of satellite signals by Iran.

The new appeal follows the Islamic Republic's jamming this week of networks such as BBC Persian, Voice of America Persian, and Radio Farda, amid the escalating economic and currency crisis.

1230 GMT: All-is-Well Currency Alert. MP Hojatoleslam Mohammad Rajaei has asserted that the "real" exchange rate of the Rial is 7000:1 to the US dollar --- all the rest of the open-market rate, at least 35500:1, is "psychological operations".

1210 GMT: Surveillance Watch. Rah-e Sabz reports that Saudi Arabia has warned the Islamic Republic after the discovery of a wiretap in the luggage of Grand Ayatollah Vahid Khorasani while he was on pilgrimage.

A question: were Iran's intelligence agencies seeking to monitor the Saudis or to monitor the cleric?

1140 GMT: Your Tehran Friday Prayer Update. Ayatollah Ahmad Khatami takes the podium and fulfils our prediction (see 0600 GMT) about a regime trying to settle the public before Saturday, "The three branches of Government are joining hands to solve economic problems."

Khatami claimed, "The situation is normal, the problem is not critical," while announcing that that security and intelligence agencies had identified "disruptors" and dealt with them "seriously".

The Ayatollah declared that Iran's enemies were imposing sanctions were "themselves in crisis, faced with economic and social problems".

1045 GMT: Economy Watch. A notable juxtaposition of stories on Fars, linked to the Revolutionary Guards, this morning....

The website highlights a defiant statement by Gholam Ali Haddad Adel --- MP, former Speaker of Parliament, and member of the Supreme Leader's inner circle --- "Iran is overcoming the psychological war and conspiracy that the enemy has brought to the currency and gold market and this war is constantly fluctuating. The arrogant powers, in their crude way, think that the nation of Iran is ready to let go of the Islamic revolution through economic pressure but we are establishing Iran's economic strength."

Fars also features the declaration of the head of the Jewellers Guild, after the closure of most of the Tehran Bazaar this week, that currency and gold markets are stable. However, the lead story is warning of an MP of sharply-rising imports and the need to cope with $30 billion of smuggling.

0952 GMT: Foreign Affairs Watch (Syrian Front). Claimed footage of the insurgent Al-Baraa Brigade in the Damascus suburbs, announcing it begin executing 48 Iranians --- seized this summer -- within 48 hours if the regime does not halt violence against civilians:

(Cross-posted from Syria and Beyond Live Coverage)

0930 GMT: Nuclear Watch. An important report from David Sanger of The New York Times, fed by US officials, on an Iranian initiative to break the stalemate over Tehran's nuclear programme --- and how it is already being rejected by the US:

The American officials outline a nine-step plan --- presented to European officials in July and probably reiterated to the lead negotiator for the 5+1 Powers, Catherine Ashton, in a dinner with her Iranian counterpart on 19 September --- for a gradual dismantling of sanctions while the Iranians move to end work the Fordoo enrichment plan on 20% uranium. By the ninth step, the full suspension of the Fordoo operations would be matched by a lifting of all sanctions, including those on Iran's oil and financial sectors.

Even as they told Sanger of the plan, however, the US officials were dismissing it:

The plan requires so many concessions by the West, starting with the dismantling of all the sanctions that are blocking oil sales and setting off the collapse of the Iranian currency, that American officials have dismissed it as unworkable....

“[The Supreme Leader] is erratic, and we’ve seen him walk up to the edge of deals before and walk away,” [a senior intelligence] official said....

Obama administration officials say the deal is intended to generate headlines, but would not guarantee that Iran cannot produce a weapon. “The way they have structured it, you can move the fuel around, and it stays inside the country,” a senior Obama administration official said. “They could restart the program in a nanosecond. They don’t have to answer any questions from the inspectors” about evidence that they conducted research on nuclear weapons technology, but nonetheless would insist on a statement from the agency that all issues have been resolved.

“Yet we’re supposed to lift sanctions that would take years to reimpose, if we could get countries to agree,” the administration official said.

And the officials pointed to the strategy, highlighted in EA's analysis, of bringing Tehran to its knees through economic pressure before any negotiations were resumed:

“Within the intelligence community, I think it’s fair to say that there is split opinion about whether the upper level of the regime is getting seriously worried,” one senior intelligence official said.

0600 GMT: After the turmoil of Wednesday --- with an effective suspension of Rial-Dollar trade, the closing of the Tehran Bazaar, and the first notable public protests in the capital in 18 months --- the regime's hope was to get to today, the Iranian weekend, without further trouble.

Thursday was quiet, though tense. The ban on publication of open-market Rial-Dollar rates continued. Up to 90% of the shops in the Bazaar were reportedly shut, but there was no further display of anger and frustration. Politicians muted the in-fighting, although three Grand Ayatollahs tore into the Government for the country's economic problems. The Supreme Leader put out a general statement on the necessity to stand up to the "enemy", while in a token show of authority, the judiciary said 16 "ringleaders" --- illegal currency traders --- of the economic tension were arrested.

The regime will look to the Tehran Friday Prayer to rally the public, as it takes advantage of the normal break in the week's work and trade. But then it will face the challenge: can it fulfil the promise to re-open the Tehran Bazaar "as normal" on Saturday? Can it restore the currency exchange "as normal"?

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