Spotlight on Iran

Highlights of the week:

• Iranian media portrays recently completed round of nuclear talks in Istanbul as achievement for Iran.
• Government’s economic policy strongly criticized as second stage of subsidy policy reform is about to be launched.
• Political struggle between president, Majles continues over Sa’id Mortazavi’s appointment as Social Security Organization chairman.
• Debit cards hacked: Iranian employee exposes details of 3 million cards online.
• Pictures of the week: Iranians change PINs following exposure of debit card details

Iranian media portrays recently completed round of nuclear talks in Istanbul as achievement for Iran

This weekend, after a fifteen-month break, the two rounds of nuclear talks between Iran and Group of Five Plus One representatives came to an end. Held in Istanbul, the talks concluded in a positive atmosphere; however, no substantial agreements were reached. Once negotiations were wrapped up, E.U. foreign affairs representative Catherine Ashton said that the talks were effective, and that the two parties agreed to meet for another round of talks in Baghdad on May 23.

Iran’s chief negotiator Sa’id Jalili also referred to the talks as a success, saying that for the first time Western representatives had shown a positive attitude towards Iran and expressed their willingness to cooperate with it. However, he ruled out any possibility of freezing the enrichment of uranium to 20 percent, and added that the proposal to lift the sanctions imposed on Iran in exchange for halting its nuclear activity is no longer relevant.

On the eve of the resumption of the talks, President Ahmadinejad said that Iran will not retreat even one millimeter from its nuclear rights. In a speech given during a visit to south Iran, the president called on Western countries to change their attitude towards Iran and keep in mind that the Iranian people will protect their fundamental rights and never give them up even under the most extreme pressure.

The conservative media’s position ahead of the Istanbul talks was also one of no compromise. An editorial published by Keyhan said that Iran’s situation has significantly improved in the 15 months since the last round of talks. If in early 2011 Iran still needed to rely on importing enriched nuclear fuel for operating the research reactor in Tehran, it now enriches uranium whose quantity and quality have made Western assistance no longer necessary. Regional and international developments in the past year have also benefited Iran’s interests and weakened the position of the United States. According to Keyhan, negotiations with the West in recent years have proven that Iran must continue pursuing a strategy based on courageous resistance and technological progress, while simultaneously holding talks in order to demonstrate its power. The daily noted that Iran’s choice not to develop nuclear weapons does not have to do with fear of the West, but rather with the fact that developing such weapons goes against Islamic and humane principles, which go against Western ideology. An article by Keyhan’s editor-in-chief Hossein Shariatmadari published earlier this week said that it is Western countries, rather than Iran, that now need to make concessions in the negotiations, and that the West needs to regain Iran’s trust by lifting the sanctions imposed on it.

As the two rounds of talks in Istanbul came to an end, Iranian media was quick to portray the talks as evidence indicating the beginning of a change in Western countries’ stance towards Iran and a newfound willingness on their part to recognize Iran’s power and the reality that their policy, based on threats and sanctions, has been defeated.

An article authored by Yadollah Javani, advisor to the Supreme Leader’s representative to the Revolutionary Guards, published in the daily Javan, said that the talks signal a change in the attitude shown by the West, which stems from a recognition of Iran’s strengthening position. The internal developments in Iran, the situation in the Middle East, and the crisis in Western countries have all improved Iran’s strategic status, Javani said, which requires the West to take advantage of the resumption of the nuclear talks to abandon its hostile policy towards Iran and adopt a new cooperation-based approach.

After the resumption of the talks, Keyhan also said that, while there has been no strategic change in the position of the West, it is clear that the negotiating style used by the Western representatives has changed somewhat. Western countries no longer insist on trust-building measures from Iran as a precondition for concessions towards it, having realized that threats cannot be used to put pressure on Iran.

Government’s economic policy strongly criticized as second stage of subsidy policy reform is about to be launched

President Ahmadinejad announced this week that he is determined to continue implementing the subsidy policy reform plan, as the government and the Majles remain split over the plan’s second stage. The president said during a visit to south Iran that the government is determined to continue with the reform despite attempts by self-interested parties to undermine its ongoing implementation by causing turmoil on the gold and foreign currency markets.

For the second stage of the subsidy policy reform, the government is expected to once again increase food and energy prices, while also increasing the compensation paid to Iranians who belong to the lower income deciles. At this point it is unlikely that the government will cut the benefits for several million Iranians belonging to the upper income deciles; however, the organization in charge of implementing the subsidy policy reform has recently called on people who do not require the cash benefits to voluntarily give them up.

Gholam-Reza Mesbahi-Moqaddam, chairman of the Majles Economic Reform Committee, strongly criticized this week the government’s implementation of the first stage of the reform. He said that 15 Majles members had sent Majles speaker Ali Larijani a letter requesting a closed-door meeting with the president to hear his explanations on the implementation of the reform. The Majles member said that in recent months the government had sold 53 billion dollars from its foreign currency reserves and borrowed large sums of money from the Central Bank and other banks to pay the cash benefits. The Majles speaker recently sent the Supreme Leader a letter asking him to prevent the president from implementing the second stage of the reform before it has been approved by the Majles.

The Tabnak website also criticized the implementation of the reform, saying it has led to an increase in unemployment and had a serious impact on the middle class and the productive sector.

Meanwhile, the government is increasingly criticized for the sharp price increases in recent months. This week such criticism was also heard from a number of top clerics who demanded that the government take strong action to curb the inflation. Ayatollah Mohammad Javad Fazel Lankarani argued that over 50 percent of Iranians are unable to keep up with their water, electricity, and gas bills, saying that the government needs to solve the problems caused by the implementation of the first stage of the subsidy reform before launching the second stage.

Criticism of the price increases was also heard during Friday sermons in mosques across Iran. Ayatollah Yahya Ja’fari, the Supreme Leader’s representative and Friday prayer leader in Kerman, went as far as to call on the Majles to stop the government from launching the second stage of the subsidy reform to prevent further damage to the weaker sectors of society.

Keyhan’s editor-in-chief Hossein Shariatmadari, too, criticized the government’s economic policy, saying that the price increases are partly the fault of the heedlessness of top officials, who have estranged themselves from the people and are not sensitive enough to the plight of ordinary Iranians.

Political struggle between president, Majles continues over Sa’id Mortazavi’s appointment as Social Security Organization chairman

The political struggle over the controversial appointment of Tehran’s former prosecutor general Sa’id Mortazavi as chairman of the Social Security Organization continued this week after Mortazavi was pressured by Majles members into declaring his willingness to resign from the position.

Following the announcement, the Majles withdrew a no-confidence motion against Labor and Welfare Minister Abdolreza Sheikholeslami, which was scheduled to be debated on Sunday, April 15. Several hours before the motion was supposed to be brought for debate, Gholam Ali Haddad-Adel, a Majles member who will likely run for Majles speaker, reported that, during the weekend, Mortazavi had accepted his proposal to step down in order to ease the strain in government-Majles relations caused by his appointment.

Criticism of the president’s decision to appoint Mortazavi as chairman of the Social Security Organization continued even after his resignation announcement, particularly when it turned out that President Ahmadinejad had refused to accept it. A number of Majles members threatened to re-file the motion to impeach the welfare minister if it happens that Mortazavi is reinstated.

Last month, Mortazavi’s appointment as director of the Social Security Organization, which provides security services to about 32 million Iranians, stirred a public controversy due to his involvement in the Kahrizak detention facility affair, in which a number of political prisoners detained in the wave of riots after the 2009 elections died in the facility as a result of torture and abuse. A parliament inquiry committee appointed to investigate the events put the responsibility for the affair on Mortazavi, who had decided to relocate approximately 150 people arrested in the riots to Kahrizak, originally planned as a detention facility for dangerous criminals and drug addicts. Prior to Mortazavi’s announcement on his intention to resign, Tehran’s prosecutor general announced that the judiciary intends to put Mortazavi on trial for his involvement in the Kahrizak events.

Debit cards hacked: Iranian employee exposes details of 3 million cards online

Iran’s Central Bank confirmed this week that the debit card details of 3 million Iranians have recently been exposed online, and called on people who have not changed their PINs in the last several months to do so.

The announcement of the Central Bank was released after the card details were exposed by Iranian citizen Khosrow Zare Farid, a former software engineer for Eniak, a company which provided electronic payment services to several Iranian banks. Farid, who released on his personal blog information on cards associated with ten banks, claimed that he had done so in order to expose security issues in the systems provided by his former company to various banks. Farid detected security breaches in the systems about a year ago and alerted the bank directors, who according to him did not give the issue serious consideration.

He was laid off over disagreements with the company managers, and claimed that he had received threats from the Iranian Cyber Army, which attempted to track him down. As a result of the threats, he was forced to flee from Iran with secret banking information, which he decided to expose on his personal blog.

After the bank card details were exposed, the Iranian media reported earlier this week that citizens were lining up at bank offices to change their PINs.

In an attempt to calm the public, a Central Bank official explained that the information exposed online cannot be used to withdraw funds from clients’ accounts, since a withdrawal requires the debit card itself. Speaking at a press conference, the director of the Central Bank’s payment systems department said that an investigation conducted by the bank had shown that a third of the cards whose details were exposed were not even active. He noted that the license of the company which provided the debit card services had been revoked, and that from now on similar companies will receive their licenses only after the security of their information systems has been extensively examined.

After the affair surfaced, Arsalan Fathipour, chairman of the Majles Economy Committee, said that it will be discussed at a Majles session attended by the governor of the Central Bank, who will be required to address the way the bank handled the breach.

The economic daily Donya-ye Eqtesad pointed out that the security of electronic banking systems needs to be improved. The daily said that the use of electronic banking systems has grown in recent years, and warned that if the growth is not matched by an increase in the security of banking transactions performed using the systems, the public will lose their trust in electronic services.

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