Cablegate: Iranians Pine for Relief As Goi Tightens Grip

VZCZCXYZ0004
PP RUEHWEB

DE RUEHAK #0035/01 0081452
ZNR UUUUU ZZH (CCY AD09C213 MSI8625-695)
P 081452Z JAN 10
FM AMEMBASSY ANKARA
TO RUEHC/SECSTATE WASHDC PRIORITY 1638
INFO RUEHIT/AMCONSUL ISTANBUL 6724
RUCNIRA/IRAN COLLECTIVE

UNCLAS ANKARA 000035

SENSITIVE
SIPDIS

C O R R E C T E D COPY CAPTION
E.O. 12958:N/A
TAGS: CVIS PREL PINS PGOV PHUM SOCI SCUL TU IR
SUBJECT: Iranians Pine For Relief As GOI Tightens Grip

1. (SBU) SUMMARY: CONOFF surveyed Iranian non-immigrant visa (NIV)
and immigrant visa (IV) applicants from mid-December to early
January 2009 to gain insight into Iran's current economic and
political climate. Applicants report a bleak economic outlook due
to continued corruption and mismanagement, paired with dramatic
inflation over the past years and uncertainties at the prospect of
additional sanctions. Applicants further report that since the June
2009 elections, the Iranian government has taken measures towards
increased state control over the economy to the detriment of private
businesses. They added that the few who control the government are
diverting the country's oil money into their own pockets in order to
buy loyalty at home and to fund militant groups abroad. Most
applicants state they believe that in the distant future the
government will collapse if it does not compromise. Others warned
that the threat of military force or sanctions would only harm the
opposition by giving the government an excuse to more harshly crack
down as it did in the Iran-Iraq war. END SUMMARY.

2. (SBU) Due to soaring prices and stagnant incomes, applicants
said they have to work at least two jobs to make ends meet. As one
Tabrizi woman noted, her son works in a tractor plant from morning
to afternoon and runs a gift shop from afternoon to evening.
Applicants attribute price increases to rampant corruption,
especially among the bazaaris. One recently retired Iranian
diplomat explained that leading bazaaris periodically meet to set
prices artificially high. Other merchants follow their lead and set
prices accordingly. The bazaaris would rather let their products
rot than sell atreduced prices. He added that the Bazaar has great
political influence through the Motalafeh party headed by Habibollah
Askar-Oladi Mosalman. He claimed that it was not in the interest of
the Bazaar to open relations with the United States as that would
put at risk their oligarchic grasp of the economy. A wealthy
Khuzestan-based bazaari confirmed that the Bazaar has great economic
clout and sets prices, but dodged questions about its political
influence.

3. (SBU) A civil engineer from Hamadan voiced concerns about the
Iranian government's push to eliminate all subsidies by 2011. He
said that in contrast to privatization efforts since the 1979
revolution, the government now is trying to crush private enterprise
and centralize control over the economy. He fears eliminating
subsidies will cause massive inflation, especially for energy
prices. He added that eliminating the subsidies will take money out
of public view so that it can be used for clandestine purposes at
home and abroad.

4. (SBU) Based on applicant reports, inflation in Iran has rapidly
increased in the past four years. One applicant said the government
claims a current inflation rate of 12%, but most applicants report
the annual rate of inflation at around 20%. One Tehrani claimed
that in the past three months grocery prices have quadrupled. A
Tehrani businessman said that the current savings interest rate at a
government bank is 15% for a one year deposit or 19% for a five year
deposit. Applicants quoted average loan interest rates as anywhere
between 17% to 28%. A retired National Bank employee noted that
stocks have more or less been sluggish. He attributed this to
Ahmadinejad's efforts to harm private business in order to increase
state control. He differentiated the Bazaar from other private
businesses as being older religious establishments, which support
the government in suppressing free markets.

5. (SBU) Applicants additionally attribute Iran's economic woes to
unemployment, mismanagement, and unchecked corruption. Many retired
applicants still hold jobs to make ends meet, yet applicants report
continuing signs of unemployment problems. One Karaji factory
worker said the government forced him to retire early as enough
factories have not been built to provide jobs for the increasing
worker population. A Tehrani civil engineer said that over the past
few years he noticed a significant increase in the number of beggars
on the streets. He said that some highly educated youths are forced
to leave the country to find jobs. A Baha'i lab technician said
that as the government and Islamic Republic Revolutionary Guard
Corps (IRGC) have taken control of the private sector, it has been
much harder for Baha'i's to find non-government work. A Tabrizi
mechanical engineer said that incompetent factory managers are
ruining Iran's industry. He cited managers as impulsive with no
concern for advanced planning. An applicant said the situation is
so unregulated that prices increase arbitrarily on a weekly basis.
A Tehrani city contractor noted that corruption is so rampant that
the government sometimes fails to pay for his services. A
hydro-electric contractor working in Tajikistan explained that those
engaging in illegal activity profit the most. He said, for example,
the government puts high tariffs on cigarette imports, but does
nothing to counter the sale of illegally imported cigarettes on the
black market.

6. (SBU) Applicants report another protest will occur on February
11, Islamic Revolution Day. Some applicants said that in addition
to increased use of detainment, torture, and rape after the December
2009 Ashura protest, the government has blocked BBC and VOA
broadcasts, and increased its filtering of internet web sites and
communications. One applicant explained that the opposition

movement has support in cities around the country, but is strongest
in Tehran as it is easier to evade authorities in its immense
population. He said in other cities it is much easier for
authorities to monitor and suppress opposition activities.

7. (SBU) Although most applicants are not overly enthusiastic about
the recent opposition protest movement, many said they believe the
current regime will not survive in the long term without
compromising. All applicants voiced anger over the June 2009
elections and said the government had lost legitimacy. An applicant
from Khuzestan reported that a famous Iranian singer recently said,
now "the regime can only control the people, it cannot manage the
people." He claimed that 99% of the people dislike the regime and
only a few thousand people at the top support it. He said only
25-30 mullahs make the decisions. He labeled the current regime a
military government which only has legitimacy through the force of
the IRGC. He explained that the government recently forced
students, factory workers, and government employees to demonstrate
in support of the regime by threatening them with the loss of their
enrollment or jobs. He cited one reason more people do not come out
in support of the protesters is fear of the instability like that
seen in Iraq and Afghanistan.

8. (SBU) A Ministry of Health employee from Abadan noted that many
former American Embassy hostage-takers came out and said it was a
mistake to have taken the U.S. Embassy in light of the results.
Many applicants expressed their love of America and Americans and
they hope that America supports their efforts towards achieving
freedom. A few explained that America should not be afraid of being
seen as interfering by supporting their rights as most Iranians have
forgotten or forgiven the past and in fact prefer the past to their
current situation of repression and international isolation. A few
noted that Russia and China are especially hated due to their
protection of the current regime. Applicants warned that any
military attack would only strengthen the regime's ability to crack
down on the opposition much like they did in the Iran-Iraq war. One
Tehrani banker said that current sanctions have not effected the
government as they find loopholes around them. A Tehrani artist
said that increased sanctions may only place more burdens on the
people. He added that an embargo on the country's oil may be
effective as it is the only source of government income; however, he
feared China would block any proposed embargo due to major
investments they have made in Iran.

9. (SBU) COMMENT: In the past month, CONOFFs observed that with a
few exceptions, most applicants state they dislike the regime and
prefer change, but are not willing to take risks in supporting the
opposition. At the same time, many applicants believe if the
economy worsens, repression increases, and international isolation
continues, the public will not be able to tolerate the current
system any longer. Many note that the government cannot survive
unless it compromises with the opposition. America's options to
halt Iran's nuclear program must carefully be weighed in light of
how they might affect the government's ability to justify increase
centralization of power and government pressure on the opposition
movement. END COMMENT.

SILLIMAN

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