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Daily Report for Wednesday, May 18, 2016

1 Report for

Wednesday, May 18, 2015

Ordibehesht 29, 1394

Highlights, Page 2 News Briefs, Page 3 Other Stories, Page 4

Javan: European banks demand $15 billion from Iran, Page 6 Will King Salman be Saudi Arabia’s last monarch? Page 10 Rouhani to shuffle cabinet? Page 13

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2 Highlights

 On Friday May 13, US Secretary of State John Kerry met with heads of 10 European banks. According to a report by Javan newspaper, a source has commented that while publically, these banks did not respond positively to re- engaging with the Iranian financial system, certain European banks have

unofficially indicated their willingness to resume ties, on the condition that they are compensated for penalties already paid to the US for their relations with Iran. (See Page 6)

 Analyst Alireza Rezakhah writes an analysis for Iran Review in which he asks: Will King Salman be Saudi Arabia’s last monarch. (See Page 10)

 A recent article published by Tehran’s Arman daily implies imminent changes in Rouhani’s cabinet. The question is who needs a change? (See Page 13)

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News Briefs

* Indian Prime Minister Narendra Modi will arrive in Tehran on May 22 for a two-day visit. Modi is expected to discuss oil imports and the development of the strategically important Chabahar port in Sistan and Baluchistan province.

* Iranian news media are highlighting the news that ISIS (also known as Daesh and ISIL) militants began to destroy the historical sites in Iraq after they took control of vast swathes of the country, and have reportedly damaged the Assyrian ancient palace in Mosul in recent days. The palace dates back to the 7th Century BCE and was built by the Assyrian King Sennacherib.

* “Shahrzad” [popular Iranian TV series aired online and in stores, not on IRIB] beats the satellite. The series, mostly Turkish-made, aired through Persian-speaking satellite TV channels.

* Etemad reformist newspaper reports that Social Welfare Organization says that in Tehran, 36% of marriages end up in divorces. It went on to say that divorce rate goes up to 58% in Shemiranat area in Tehran city.

* Etemad reformist newspaper reports that the ‘Omid’ [hope] faction in the next Majlis has already decided that Mohammreza Arif would be its leader in the next Majlis.

* Ebtekar newspaper writes that 20%

of Iranians will be elderly by 2050.

* Ebtekar newspaper writes that Deputy Education Minister for Management Development and Support Seyyed Mohammad Bahtahei says that Iranian parliament has approved 300,000 billion rials for education in this year’s budget. He went on to say that 99% of this figure would be used for his ministry’s personnel.

* Resalat newspaper reports that Iranian cleric has reportedly been killed in Syria. Iranian social media sites have reported the death of Iranian cleric and seminary student Majid Salmanian in Syria. His death has not yet been confirmed.

* Foreign Minister Mohammad Javad Zarif left Vienna for Tehran on Tuesday midnight. Zarif who travelled to Vienna on Monday to attend the international contact group’s meeting on Syria wrapped up his visit to the European country after attending the meeting and holding talks with several of his foreign counterparts.

* Deputy Foreign Minister Majid Takht-Ravanchi said has dismissed a recent report that European banks had asked Iran to provide guarantees to compensate for possible future

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penalties imposed by the US for resuming banking activities with Iran.

Iranian lawmaker: Iraq should create its own IRGC

Mohammad Saleh Johkar, a member of the National Security and Foreign Policy (NSFP) Parliamentary Commission, stressed that the IRGC is a

“good model for regional countries” and noted that Iran is ready to assist any country in the region that wants to create its own version of the IRGC.

Johkar’s comments appear to be in reaction to comments made by the commander of Saraya al-Khorasani – an Iraqi Shia militia with close ties to Iran – in support of Iraq forming its own version of the IRGC.

Life expectancy in Iran for men and women

Mohammad Esmaeil Motlaq, an official from the Iranian Health Ministry, announced the most recent life expectancy figures.

According to a report by Iranian Students News Agency (ISNA), the life expectancy of Iranian women is 74 and that of men is 72.8 years old.

The Health Ministry plans to increase it to 76 for females and 74 for males, Motlaq stated.

Street violence in Tehran down by 5.7%

Aftab News website reports that Tehran Province Coroner’s Office says that street violence was down by 5.7% in the Iranian year of 1394 [ending March 2016].

It said that a total 101,109 individuals were sent to hospital due to street violence in 1394.

Of this number, 66,551 were male and 34,447 were female.

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5 IRGC Air Force Commander: The U.S. told us to not disclose our missile tests

Jomhouri Islami conservative newspaper reports that IRGC Air Force Commander Brig. Gen. Amir Ali Hajizadeh claimed that U.S. officials instructed their Iranian counterparts to keep their missile activity secret in the wake of the nuclear deal.

He stated that the U.S. told Iran, “Don’t talk about missile affairs, and don’t mention if you conduct a test or maneuver.”

Hajizadeh also stressed that the U.S. has the end-goal of completely dismantling Iran’s missile program.

Students and principal show sympathy for classmate with cancer

Fararu news website reports that Amir Mohammad Mardi Azar, a schoolboy in southern Tehran, is suffering from cancer and also needs a kidney.

But at least he doesn’t feel lonely anymore, because some of his classmates, along with principal Issa Qavami at Hazrat-e Ali Akbar School in Shahr-e Rey, have shaved their heads to express their solidarity with him. Qavami.

The mother of one of the students have also said they are willing to donate their kidney to Amir Mohammad.

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6 Javan: European banks demand

$15 billion from Iran

Javan hard-line conservative newspaper: After a Friday (May 13) meeting with John Kerry, the heads of certain European banks said that the American official’s remarks had failed to convince them to resume banking ties with Iran.

However, an informed source in Tehran says that some of these bankers sent unofficial messages to Iran, expressing their readiness to start banking ties with Tehran on the condition that the Islamic Republic compensates them for billions of dollars’ worth of fines they have already paid to the US.

The Americans, therefore, are hypocritically suggesting that their Secretary of State, as a goodwill gesture, is encouraging European banks to resume their dealings with Iran, but that in the end it was the Europeans who refused to do so!

However, three days after Kerry’s closed-door meeting with the heads of 10 major European banks, unofficial reports relate a different story; a story that reveals European banks are aiming to demand a ransom from Iran.

Within the past five years, the US has imposed penalties of $15bn on Standard Chartered and HSBC, and $8.9bn on France’s BNP Paribas. However, an informed source close to the banking network says the European banks have asked Iran to pay

$15bn compensation.

“European banks have also informed the Iranian side that it should provide guarantees to compensate for possible future penalties imposed by the US if it wants to resume ties,” the source added.

Good cop, bad cop?

So far, it was believed that the US was the one stalling [the process of Iran’s return to the global economy]; however, Iran is now faced with ransom demands from certain European bankers. These banks claim that the remarks made by Kerry on Thursday have not only failed to allay their concerns [over the resumption of ties with Tehran], but have actually increased them.

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There are observers who do not reject the possibility of a “good cop/bad cop”

scenario. Kerry on Thursday repeatedly expressed concern over what he called Iran’s measures in the region, and in this way, he not only failed to allay the banks’

concerns, but also made them understand that the sanctions will continue on this pretext. He suggested that if these banks sign any deal with Iran, the country’s assets, and consequently part of the banks’ investments, could be easily confiscated by American courts.

This scenario is aimed at humiliating the Europeans, prolonging financial sanctions, and sanctifying the US: John Kerry, like a wolf in sheep’s clothing, is the main player behind this scenario, and is implementing it precisely. The US talks about terminating anti-Iran sanctions in the media so as to portray Europeans as cowards who are excessively terrified of this country. However, it secretly threatens them to practically scare these banks into avoiding ties with Tehran.

John Kirby, a spokesman for the US State Department, admitted on Friday, May 13, that his country’s officials had sent negative signals to European banks about their return to Iran.

“When the Secretary was in London speaking with European banking institutions, on more than one occasion in that meeting he raised very specifically our continued concerns about what Iran is doing in the region,” Kirby said in his press briefing.

The US knows that “Iran is a state sponsor of terrorism and that they have continued to support this particular group [Hezbollah] which is a designated foreign terrorist organization,” he added.

“… Here you have a country which, while living up to their commitments under the JCPOA, is certainly still conducting any number of destabilizing activities in the world and in the region. And we understand that and the Secretary was very clear about that,” Kirby told reporters.

The US spokesman, however, did not mention why Kerry had raised such an issue in a meeting aimed at giving assurance to European banks on the resumption of ties with Iran.

In a Thursday article, the Associated Press referred to US stonewalling in the JCPOA implementation, stressing that the US refusal to give written guarantees on the safety

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of trade with Iran is why European banks are reluctant to resume their ties with Tehran.

“Foreign governments, banks and other companies want written clarification from the US Treasury Department — essentially a guarantee they won’t be punished. But Washington is reluctant to do that, not wanting to appear to be softening its firm penalties for non-nuclear behavior,” AP reported.

In separate statements released after meeting with Kerry, the European banks Standard Chartered, Deutsche Bank, and HSBC announced that the American diplomat’s remarks had failed to convince them to resume their ties with Iran.

In a Friday article in the Wall Street Journal, Stuart Levey, the chief legal officer of HSBC Holdings and the former undersecretary for terrorism and financial intelligence at the US Treasury Department, provided the best explanation of why Kerry’s remarks were not convincing.

He argued that Washington’s double-standards, and its officials’ fears and hopes about the resumption of ties with Iran were the main factor behind European banks’

unwillingness to trade with Iran.

On Friday, US Republican Representative John Ratcliffe introduced the Iran Cyber Sanctions Act of 2016, which requires the administration to impose sanctions on hackers allegedly linked to the Iranian government. The measure pushes the administration to take action on an April 2015 executive order that authorized the Treasury Department to sanction individuals and entities who engage in malicious cyber activities against the United States.

“The danger posed by Iran’s increasingly sophisticated cyber capabilities has grown significantly over the past few years, and we must take these threats seriously,”

Ratcliffe said, according to his personal website.

A couple of months ago, the US Justice Department announced it has indicted seven hackers associated with the Iranian government with cybercrimes.

Foreign Minister Mohammad Javad Zarif said on Saturday, May 14, that the parties to the Joint Comprehensive Plan of Action must discharge their obligations in a tangible way so that Iranian people would feel the positive results.

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The Foreign Minister made the remarks in his speech to the inaugural ceremony of a conference entitled “JCPOA, the Economy of Resistance; Opportunities and Capacities” in Tehran, which was attended by Iranian foreign ambassadors.

The Iranian ambassadors should focus their efforts on helping the country’s economic growth and enhancing people’s living standards, Zarif said.

Referring to the opposition of certain parties in the US to the JCPOA, Zarif said that some of the opponents of the Iran deal, who have a record of supporting the Zionist [Israeli] regime, had tried to slow down the implementation of the deal by pursuing their own closed-minded views.

He said that the hostile approaches held by the JCPOA opponents in the US require Iranian ambassadors to exercise vigilance and push forward the goals of the Islamic Republic of Iran.

“We have gathered together here to exchange views on all the new chances and opportunities for making use of the JCPOA in the light of the Economy of Resistance,” he added.

Iran’s top diplomat also highlighted the significant role of Iranian ambassadors in presenting a true image of the JCPOA implementation and the efforts made by the administration to clarify the JCPOA achievements in the fields of banking and finance.

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1 0 Will King Salman be

Saudi Arabia’s last monarch?

Iran Review news website. Dated May 17, 2016. Alireza Rezakhah. Doctorate in Political Science; Political and International Analyst

Zachary Schreiber correctly predicted a drastic fall in global oil prices two years ago and is now issuing warnings over a financial catastrophe in Saudi Arabia. He has recently projected that Saudi Arabia will become bankrupt in terms of its financial structure because the country is facing two threats, that is, very high costs in the face of plummeting oil prices. Schreiber says that Saudi Arabia is undoubtedly suffering from high debts right now. According to his report, Saudi Arabia needs an oil price of over 100 dollars per barrel in order to make the ends meet. Schreiber has also noted that Saudi Arabia’s extravagant social programs are at loggerheads with reducing oil prices. The foreign exchange reserves of Saudi Arabia’s central bank previously stood at about USD 600 billion, but Saudis had totally squandered about USD 140 billion of those reserves between late 2014 and February this year. The International Monetary Fund has recently warned that Saudi Arabia will finally exhaust all its cash. The situation is so dire that even the Saudi royal court is now concerned.

It seems that recent changes among Saudi Arabian ministers are the outcome of wrong policies whose consequences are currently plaguing Riyadh. During past few years, Saudi Arabia has been consistently moving in line with the United States polices, which aimed to bring Iran to its knees and make Tehran give up its nuclear program.

To do this, Saudi Arabia greatly increased its oil output, causing a drastic fall in global oil prices and now the country’s monoculture economy, which relies on petrodollars for 90 percent of its earning, is caught in the same trap that Riyadh had laid for Tehran. Under these conditions, Saudi officials are thinking about reforms. Of course, economic reforms in Saudi Arabia are, per se, positive and even necessary in view of the country’s young and burgeoning population. However, in view of serious obstacles that exist on the way of reforms in Saudi Arabia, hasty plans offered by Saudi officials cannot be expected to work miracle and prevent economic bankruptcy of the country. Analysts, therefore, have raised doubts about the true nature of these plans, among which the following instances are noteworthy:

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Obstacles facing reforms in Saudi Arabia

First: The Saudi king is not in a situation to plan reforms, which would guarantee future prosperity of the country. Therefore, influence of American institutes must be seen behind all such plans which they have made on the future outlook of the country, and it is not still evident if the result of these plans will be exactly what Al Saud expects to see.

Second: Reforms proposed by the Saudi king and his scion are mostly of an economic nature while changes in political and social spheres are still considered a red line, though without changes in political and social spheres, any economic plan is less than likely to be viable.

Third: More than caring for reforms, the Saudi king means to show off the capabilities of his son, Muhammad, and this issue can be a sign of soaring power struggle in the country. It seems that King Salman is trying to change the country’s tradition from one in which the rule of the kingdom is handed down to sons of Abdulaziz, to a new one in which the power is handed down to the son of the king.

However, it is certain that following the demise of the king, this issue will lead to flare-up of a more serious power struggle in the country.

Fourth: Muhammad bin Salman, the inexperienced son of King Salman, has already tried through direct intervention in the case of Syria and launching the war on Yemen to show that he is a qualified successor for his father. However, his failure in both cases can convey the message that he cannot be trusted with economic issues as well.

Fifth: Analyses about the changing attitude of the United States toward Saudi Arabia as a result of which Washington sees Riyadh as an ordinary friendly country rather than a strategic ally can be another factor that has caused Saudi Arabia to hastily come up with such plans in order to get out of the current dire straits.

Sixth: Muhammad bin Salman, who has been known as Saudi Arabia’s “economic tsar” and the official in charge of the country’s energy giant, Aramco, recently announced that he plans to sell part of Aramco’s stocks in order to set up a foreign exchange fund worth two trillion dollars for Saudi Arabia. On the other hand, certain cases against Al Saud are still open in the United States, including the case of Al Saud’s role in the 9/11 terror attacks. Therefore, as dissent and other unpredictable events may surface in Saudi Arabia, the United States is possible to block the

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country’s assets on the strength of such cases, especially the case of 9/11 terrorist attacks.

Seventh: The cultural structure and educational system of Saudi Arabia is affected by Wahhabi extremist teachings, which have given birth to such terrorist groups as al- Qaeda and Daesh. The point is that the Saudi ruling system keeps supporting such groups in order to maintain its legitimacy and this issue will not finally serve to guarantee the survival of this regime.

Eighth: Economic structure of Saudi Arabia is based on state-run posts, large-scale subsidies and employment of low-wage foreign workers and there is no doubt that economic reforms will lead to social protests. Let’s not forget that in April, Salman fired the kingdom’s water and electricity minister, Abdullah al-Husayen, because al- Husayen was under fire for introducing a high water tariff and enforcing new laws for drilling wells. He had also slashed subsidies that Saudi government gives its people on energy.

All told, the above facts clearly show that a Saudi Arabia without oil is tantamount to a Saudi Arabia without kingdom and monarchy.

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1 3 Rouhani to shuffle cabinet?

Arman newspaper: A speculative article published on Sunday by Arman newspaper [seen affiliated with Hashemi Rafsanjani] suggests that Rouhani is, or should be, considering changes in his cabinet. Amid rumors that Rafsanjani is pressing Rouhani to withdraw from his chances of reelection in the upcoming presidential race, Motahareh Sharifi’s article can be a read as a manifesto of the former president.

“Now, three years have passed since the eleventh administration’s tenure began and the one year left is a golden year which means the administration’s engine should work more powerfully in order for what is offered as the achievements of the eleventh administration to be in line with what was pledged on the first day. To do so, the efficacy of the ministers proposed in 2013 should be reviewed so that other individuals, discerned to be able to realize the administration’s declared goals in a better and quicker way, can take over the ministries in question. This does not mean the sitting ministers are inefficient but signifies a shift for the administration’s success and agility, which will make public opinions content as plans materialize. If these cabinet changes and modifications are applied, there will be hope for the economy to go forward more smoothly and for good investments to take place in the country.

Furthermore, a better political spirit will be established, the results of which will show up in the 2017 presidential election. The President should not be pressed to change the cabinet so that the changes can occur in peace, after further consultation with experts, in order to benefit all social strata.”

A more aligned parliament, which takes over in a matter of days, has given rise to speculations and or expectations of the kind but the truth is there is not much time left for the Rouhani administration. However, reformist politician Abdollah Nasseri stresses the necessity of changes in Rouhani’s cabinet and tells Arman the society seeks acceleration in executive affairs to see a series of fundamental changes and that is the least Mr. Rouhani can do. “Not all the cabinet members were optimal for the President and Rouhani had no choice on certain individuals because of the considerations caused by votes of confidence,” he added. The article urges the administration to pluck up courage in the face of potential rumors and attacks and put aside standing on ceremony.

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After dropping such free bits of advice, the article suddenly comes up with a ready- made list of “likely changes”, including four ministers, a vice president, a bureau chief and director of an organization. The article goes further and pays the names: vice president for executive affairs Mohammad Shariatmadari, Labor Minister Ali Rabiei, Industry Minister Mohammadreza Ne’matzadeh, Sport Minister Mahmoud Goudarzi, Education Minister Aliasghar Fani, and the Civil Servants Pension Organization’s director Mahmoud Eslamian. A passing reference is also made to “governors who failed to live up to the administration’s expectations”.

But the article goes even further and offers an Ahmadinejad-esque recipe: “… it should be noted that some of the administration’s ministers and directors know the way to escape replacement and the President should make precise use of an element of surprise,” in dismissing them, just as Ahmadinejad did to get rid of his Foreign Affairs Minister, Manouchehr Mottaki, back in 2010.

The article makes a U-turn, here. It criticizes Rabiei for his alleged appeasement with the preceding administration whose many financial abuses have been covered up or at least not unearthed as much as they should. In yet another surprising turn, all of a sudden, Arman becomes an advocate of the tenth parliament dominated by the principlists when it quotes from the MPs who criticized Rabiei for his failure to create jobs.

The minister of industry is also handed his own share by the article as it suggests that a petrochemical products black market has been formed as the result of the ministry’s negligence. Ne’matzadeh is also lambasted for his remarks labeling a campaign to halt purchases of cars manufactured domestically as a bold treachery to national interests, a sin, or a crime masterminded by the enemies of the Revolution. His potential successors? Mohammad Shariatmadari, Rouhani’s chief advisor Akbar Torkan and Deputy Vice President for Coordination and Supervision, Reza Viseh.

The article also strokes the hot seat of the Sports Minister for its neutrality and inaction. Mohammad Dadkan and Eslamian are named as the candidates to substitute Goudarzi. Education Minister Fani is also blamed for his failure to inure educational justice and for his alleged collusion and lobbying with the critics, including the Majlis.

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According to the article, Shariatmadari and Eslamian remain in the cabinet but will assume new positions. Mohammad Hashemi, Rafsanjani’s brother and bureau chief at the Expediency Council, told Arman newspaper that changes in the cabinet will not meet success unless there is an immediate necessity.

What is for sure, June, known in Iran to be the season for political phenomena, will have a lot to offer for a better understanding of the political atmosphere in Iran and the fate of the Rouhani administration.

1 Report for

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Report for

2 Highlights

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News Briefs

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Other stories

Iranian lawmaker: Iraq should create its own IRGC

Life expectancy in Iran for men and women

Street violence in Tehran down by 5.7%

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IRGC Air Force Commander: The U.S. told us to not disclose our missile tests

Students and principal show sympathy for classmate with cancer

6 Javan: European banks demand

$15 billion from Iran

Good cop, bad cop?

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1 0 Will King Salman be

Saudi Arabia’s last monarch?

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Obstacles facing reforms in Saudi Arabia

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1 3 Rouhani to shuffle cabinet?

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