Iran's Quds Commander Threatens To 'Break America's Teeth'

This was one of the rare optimistic views coming out of Iran in recent days about the nuclear negotiations in Vienna. Most political analysts are not optimistic about the likelihood of Iran and the United States returning to their commitments under the 2015 nuclear deal known as JCPOA.

Zanganeh, a relative of Supreme Leader Ali Khamenei through marriage, told the reformist Arman newspaper that the general atmosphere in Vienna shows that there is an increasingly positive trend which makes reaching a result more likely. "The fact that the new Iranian negotiators have come to the conclusion that they need to accept the previous six rounds of the nuclear talks as a basis for the current round of talks is a positive step," he said.

The former diplomat added that America's withdrawal from the nuclear deal caused big economic losses for Iran. "There will be more losses if the current situation continues," Zanganeh added that the two sides need to tweak their positions in a way that would lead to the lifting of sanctions imposed on Iran.

Asked if the situation is ripe for lifting the sanctions, Zanganeh said, "There is evidence indicating the Americans have accepted to lift JCPOA-related sanctions. Of course, the priorities for lifting the sanctions have not been determined yet." He added: "On the other hand, it is not clear what would the United States demand against lifting the sanctions and how would Iran react to those demands."

Generally, Zanganeh concluded that based on assessments made about the first two days of the negotiations, reaching results during a short period is likely if the United States and the European countries show goodwill. However, he acknowledged that while the US insists on direct talks with Iran, the Iranian delegation is still adamant that the talks should take place collectively and in the presence of other JCPOA member states.

Meanwhile, he noted that the only country that is against direct talks between Iran and America is Israel, although there might also be opposition among Arab states. The opposition might attempt to obstruct the direct talks, but both Iran and the United States need to tackle possible opposition delicately and not allow pressures from outside to affect the talks.

Zanganeh also noted that Iran has rejected the United States' call for extending some of JCPOA restrictions or imposing new limitations on Iran's nuclear program. He added that Iran will not accept the United States' demand for lowering uranium enrichment level to what was agreed in JCPOA. However, he said that Iran will accept the demand only if a proportionate reduction is made in US sanctions. Tehran also wants the United States and Europe to guarantee that Washington will not leave the agreement again.

Zanganeh also called on Iranian hardliners who have been denying the impact of sanctions on the country’s economy should change their approach and understand the reality that Iranians are calling for lifting economic pressure that has led to hardship for the great majority of the people with ordinary incomes.

The protesters, mainly supporters of Shiite factions backed by Iran, continued to level unsubstantiated claims that the vote had been rigged.

"We will continue our protest until they change the results and bow to our demands," said protester Ali Jawad.

The electoral commission confirmed Shiite cleric Muqtada al-Sadr as the biggest winner in last month's poll, securing 73 out of Parliament's 329 seats.

A Sunni party headed by Parliament Speaker Mohamed al-Halbousi came in second with 37 seats, while the Kurdistan Democratic Party (KDP) secured 31 seats, the commission said.

The pro-Iran factions - which had alleged voter fraud - lost around two-thirds of their seats. They got only 17 seats, down from 48 in the previous elections.

The results will now be sent to the Federal Supreme Court for ratification, after which the president will call for a Parliament session within 15 days, where a new Speaker is elected.

AP report

The report quoting local residents in southwestern Afghanistan said that Iranian forces crossed into Afghan territory.

Amaj News based in Kabul also quoted local sources as saying that Iranian forces used heavy weapons and the Taliban dispatched armored American Humvees to confront Iran’s border troops.

The Taliban seized a large quantity of light and heavy American weaponry when they overran the country in August.

Later, Tasnim News affiliated with the Revolutionary Guard reported that a "misunderstanding" led Taliban forces to open fire at some Iranian civilians who very close to the border line, and Iranian troops replied. The website stressed that the clashes have ended.

The Islamic Republic first welcomed the Taliban victory, presenting it as a defeat for the United States, but later terror attacks against Shiite Afghans led to protests in Iran and warnings from Tehran that the Taliban must protect minorities. Iran has also been demanding an inclusive government in Afghanistan, while the Taliban have kept their tight control.

Fars news agency close to the Revolutionary Guard reported Wednesday that based on its sources, the Budget Organization believes that two factors will lead to a jump in economic growth in 2022.

First is the huge economic retrenchment Iran has experienced since 2018 when the Trump administration withdrew from the 2015 nuclear agreement, JCPOA, and imposed crippling sanctions. The argument presented is that any country with three years of substantial negative growth is set to rebound. Iran’s economy shrank by around 7-8 percent from 2018-2020. This year, the government says growth has been slightly positive, but inflation, a 50-percent budget deficit and fall in industrial output, for example in steel, tell a different story.

Second, Iranian budget officials believe that the Covid-19 will play a less destructive role in 2022. However, with new variants surfacing every few months, the pandemic is a highly unpredictable economic factor. Even world markets experienced a jolt this week as the Omicron variant raised global alarm.

The big unknown is Iran’s illicit oil exports in the face of US sanctions. On Wednesday oil minister Javad Owji said that exports have substantially increased in the past few months compared with 2020. If this is true, it might provide some foreign currency to the government, but there are so many problems it has to address that a few billion dollars of oil sold clandestinely and cheaply would make a small dent.

It is worth noting that in its 43-year history, the Islamic Republic has had an average economic growth rate of 2 percent.

There is also the question of how the government handles the foreign currency it earns from oil. An economy website in Tehran, Donyae Eghtesad (World of Economy) this week published an analysis that said as long as successive governments used the oil income to defend the rial, an inherently weak national currency instead of real investments, growth has suffered.

The article argued that for a limited period the government should allow the currency to naturally fall against the US dollar to create an equilibrium with the existing 50-percent inflation and resist the temptation of temporarily flooding the market with petrodollars to help the rial. Dollars that the government injects in the foreign currency market is mostly taken out of the country by people and businesses who know that the rial is weak and build their economic egg nests abroad.

The rial has fallen ninefold since 2017, from around 33,000 to the dollar to 290,000. Observed from a 45-year perspective, the rial has fallen more than 4,000-fold. During the monarchy one US dollar was stable at 70 rials.

Donyae Eghtesad also argues that using earned dollars in a wise and responsible manner is half the equation to ensure economic growth. The other side of the coin is economic reform that the Islamic Republic has been reluctant to embrace. The quasi-state-controlled system must be drastically altered, the website says.

But somewhat similar to the Soviet economy, political power in Iran is closely intertwined with economic control by the government. If the government liberalizes the system and losses control over the economy, it will also lose political power.

The best example is the Revolutionary Guard, which is one of the biggest economic players in the country, despite being the main military entity in the country. The regime can hardly survive challenges by angry citizens, if it takes economic power away from the Guards. They have proven time and again that when large protests erupt, they are willing to shoot and kill hundreds to protect the political system.

Owji was speaking after a joint meeting in parliament between President Ebrahim Raisi, his ministers and lawmakers Wednesday morning. He did not provide any details about the growth in oil exports, as all sales and shipments are conducted in secret for fear of US retaliation against buyers.

Iran’s oil exports dropped from more than 2 million barrels per day in 2016-2017 to less than 200,000 in 2019, after the United States imposed third-party sanctions following its withdrawal from the Obama-era nuclear agreement, the JCPOA.

However, illicit oil exports said to be going mainly to China have increased since September 2020 and provide Iran with an undisclosed amount of revenue. The nature of the illicit trade certainly reduces the amount of foreign currencies Iran can receive. Middlemen who facilitate such shipments make hefty profits and Iran must charge much less than global oil prices to entice buyers.

The Biden Administration, which is indirectly negotiating with Iran to return to the JCPOA, has been criticized for not diligently enforcing the Trump-era sanctions, allowing China to import Iranian oil disguised as originating from other countries.