1 Report for

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Daily Report for Tuesday, October 31, 2017

1 Report for

Tuesday,

October 31, 2017 Aban 9, 1396

* Highlights. Page 2

* News Briefs. Page 3

* White House denies meeting request. Page 3

* Protests against credit institutes. Page 4

* Where does Iran stand in competition in post-Daesh Iraq? Page 5

* What does Switzerland have to do with Iran-Saudi relations? Page 9

* Korean news corner. Page 14

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2 Highlights

 An article by Middle East expert Mostafa Najafi published in conservative principlist website Tabnak discusses Iran’s rough road ahead in the economic race to rebuild Iraq. (See Page 5)

 A former Iranian diplomat argues that Iran and Saudi Arabia decided to be represented through Switzerland embassies because the best available remedy for the tension between the two countries was to designate a third country to represent the countries’ respective interests just the way relations between Iran and the United States and between Egypt and Iran have been managed for close to four decades. (See Page 9)

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3 Briefs

* Farsi-language reformist newspaper Shargh writes that President Rouhani’s government sent a bill to the parliament in 2015 seeking to make election campaign expenditure more transparent. However, as President Rouhani has started his second term, the Majlis has still not passed the bill.

* Farsi-language hardline conservative Tasnim News Agency [seen as mouthpiece for IRGC] has printed a series of articles and interviews which show that Mohsen Armin was an interrogator [dubbed Interrogator 209 as Section 209 was reportedly for interrogating with MKO and opposition] in the 1980s. Armin has replied that it would be a matter of pride if one were said to be working in Section 209. [Armin is a reformist politician who has served as MP from Tehran and Majlis’ Vice Speaker. He is also a central committee member and speaker of Mojahedin of the Islamic Revolution of Iran Organization.]

* Farsi-language reformist newspaper writes Ghanoon that on October 25, Deputy Foreign Minister Abbas Araghchi met a number of Tehran University’s Basij members, during which he told them that Iran did not talk [meaning negotiate] about Iran’s missile program, but “we are speaking” about this issue. For example, “I spoke to the German ambassador about this issue.” This caused many hardliners to criticize him. But Foreign Ministry spokesman Bahramn Ghassemi told reporters yesterday that “negotiating” and just

“speaking” are two different things.

* Farsi-language Iranian Students News Agency (ISNA) reports that Iranian officials are offering their condolences to IRGC’s Qasem Soleimani on the passing away of his father.

White House denies meeting request

Farsi-language BBC Persian Service reports that America’s White House spokeswoman Sarah Huckabee Sanders has told NBC News in a brief email early Monday that Iran’s statement that American President Trump had requested to meet President Rouhani was

“false.” Iranian news media have reported that Iranian Foreign Ministry spokesman Bahram Ghassemi, US President Donald Trump requested a bilateral meeting with Iranian President Hassan Rouhani in New York during this year’s United Nations General Assembly meeting in September. Iran rebuffed the request.

Mehdi Fazaeli, a conservative analyst and former managing director at Fars News Agency, first reported the story with on October 29. According to Fazaeli, the request came one day after Trump’s speech to the assembly, in which he referenced Iran a dozen times, calling its government an “oppressive regime” and a dictatorship. In the same speech, Trump also called the 2015 nuclear deal between Iran and the six world powers

“one of the worst and most one-sided transactions the United States has ever entered into.” Fazaeli described Trump’s speech as “insulting” toward Iran and contextualized it as being in line with the US objective of selling arms to regional allies.

Fazaeli wrote that French President Emmanuel Macron had offered to facilitate the meeting, but Rouhani had turned him down as well. Ghassemi, who confirmed Trump’s request when asked about it by Iranian media October 29, did not, however, confirm Macron’s reported involvement. Fazaeli, in line with his conservative positions, did not view a possible US-Iran meeting at the presidential level in a positive light.

“Efforts by the American government to negotiate with Iran are not new, and during the last four decades both Republicans and Democrats have made efforts,” Fazaeli wrote. “The Americans are certain that such a negotia-

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tion has benefits for them, but for Iran, other than damage, it has no other achievements. The Americans will offer no concessions, as has been experienced in the [Iran] nuclear deal, [with] Libya, North Korea, the Soviet Union and others.” He praised Rouhani for refusing to shake Trump’s “velvet-covered hands” and for acting within the “strategic framework” of the Islamic Republic. He claimed that the

“slightest flexibility” by Rouhani in regard to such a meeting would have made the

“American-European plot successful” and caused “irredeemable damage to national pride.”

Had a face-to-face encounter taken place, it would have been the highest-level meeting between Iran and the United States since the 1979 Islamic Revolution.

In 2013, US President Barack Obama and Rouhani spoke by phone during the annual General Assembly meeting. It was also reported that Obama shook hands with Iranian Foreign Minister Mohammad Javad Zarif behind closed doors at a General Assembly gathering. Zarif and former Secretary of State John Kerry broke a long-standing taboo by holding bilateral talks to hammer out the nuclear deal. Those meetings played a significant role in the breakthroughs that led to agreement on the landmark deal.

Protests against credit institutes

Farsi-language reformist newspaper Bahar reports that Iranians gathered yesterday to complain about bankrupted bank credit institutes in Tehran. Hundreds of Iranians

have been protested for several months to reclaim their investments and money deposited with bankrupt credit institutes, such as Caspian credit institute. The protesters have complained to the Iranian authorities about this issue in the past. This time, the protesters raised their protests with the news media. They called on the news media to give coverage to their protests and problems, just like the newspapers are highlighting corruption, rising inflation, rising number of divorces, addiction rates and other similar issues.

These protests have occurred in many cities across Iran, such as Tehran and Khorramabad. Most of these gatherings were staged by people who claim they are victims of systematic deception and fraud by the credit institutions. They say their assets have been either plundered or they have not received any interest for their deposits, as promised by the institutions.

The protesters also maintain that they have tried to withdraw their deposits with no success. Most of these so called credit institutions are in fact unofficial banks, which somehow evade regulations and even proper registration.

The state-owned Islamic Republic News Agency (IRNA) reported on May 28, 2017, that Caspian institution received a conditional license for its activities from the central bank in 2015 provided it disbands the eight coops related to it.

Therefore, the protesters have accused the CBI of nontransparent accountability. The protesters also argue that they have deposited their money with an institution approved by the CBI; therefore the bank is legally and morally accountable for it.

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5 Where does Iran stand in economic

competition in post-Daesh Iraq?

Iran was the first country to join and it has played an unmatched role in defeating the IS and restore the sovereignty of Iraq over the lost regions.

Agreements have been sealed between Iraq and Saudi Arabia during al-Abadi’s recent visit to Riyadh over the reconstruction of Sunni-majority regions of Iraq destroyed by the ISIS.

No country except Iran volunteered in 2014 to pay the cost of Iraq’s security and fight against ISIS but today every side is rushing to gain economic benefits under the pretext of rebuilding Iraq.

Iraq has invited all countries to invest in the country, without any consideration.

If so, there will be no compensation for costs Iran underwent to secure Iraq in recent years while additional security and political costs will be imposed.

This becomes even more significant as we approach the parliamentary elections in Iraq, where regional and international players try to pave the way for their influence in Iraq’s politics by empowering political parties and groups affiliated with them.

Doubtlessly, Iran could win a larger share in Iraq’s market, if it allocates credit to private firms as Turkey and Saudi Arabia have done.

At the moment, the World Bank, the International Monetary Fund, the US, the UK and others have allotted credit to rebuild Iraq, under the condition that Iraq makes

purchases from centers they have proposed.

On the other hand, Tehran shall seek to identify existing economic potentials and opportunities in Iraq and start serious talks with the Iraqi government to make investment.

The main mission of actors like Saudi Arabia is not to gain economic profits but rather security and political influence in Iraq, and more particularly in Sunni majority regions.

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Farsi-language Tabnak conservative news website. Middle East expert Mostafa Najafi: Remember June 2014 when ISIS substantially ravaged through Iraq, quickly occupying one of the main cities, Mosul. The terrorist group went on to seize control of other Iraqi cities and provinces, taking advantage of the army’s disintegration.

At the time, the Iraqi government reached out for help from many countries to fight back. Iran was the first country to join and it has played an unmatched role in defeating the IS and restore the sovereignty of Iraq over the lost regions.

With the collapse of the IS, a new competition has started in Iraq, over investment on the country’s reconstruction. This is not merely over economic interests, as many security and political considerations are subtly involved.

The Iraqi Prime Minister Haider al-Abadi has been quoted as saying that the reconstruction would take $100 billion. Baghdad has started an active multilateral diplomacy to attract the colossal amount. In response, sixty countries have announced readiness to help in a conference held on rebuilding Iraq.

Amid international enthusiasm to invest in Iraq, the US was among the first players to join. Americans were among the first to propose a well-drafted plan for rebuilding the country and obtaining the economic benefits thereof.

A few months ago, the US President Donald Trump proposed a bill to the House of Representatives to rebuild Iraq in exchange for oil. The bill would lead to the participation of certain US firms in the reconstruction of Iraq.

The plan prioritizes regions liberated from Daesh as well as deserts for proper utilization. The focus will be on accommodation, hospitals, and hotels.

These efforts to gain economic profits in the post-ISIS Iraq are not limited to the US.

Turkish President Erdogan has also expressed his country’s readiness for play a major role in rebuilding Iraq.

Beside US and Turkey, Saudi Arabia has taken unprecedented steps to make investments in Iraq. Agreements have been sealed between Iraq and Saudi Arabia during al-Abadi’s recent visit to Riyadh over the reconstruction of Sunni-majority regions of Iraq destroyed by the ISIS.

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Where does Iran stand in the race? What share has the Iraqi government reserved for Iran? Is that ex gratia? Is Tehran supposed to fall behind and leave empty-handed again?

No country except Iran volunteered in 2014 to pay the cost of Iraq’s security and fight against ISIS but today every side is rushing to gain economic benefits under the pretext of rebuilding Iraq.

Iraq has invited all countries to invest in the country, without any consideration. In fact, the Iraqi government is trying to create an atmosphere of economic rivalry regardless of security issues.

Tehran is making a great mistake if it thinks a special share is reserved for it. Serious diplomacy is needed if Iran does not want to fall behind. If so, there will be no compensation for costs Iran underwent to secure Iraq in recent years while additional security and political costs will be imposed.

It should be noted that Iraq imports $65 billion worth of goods but Iran’s exports to the country amounts only to $6.1 billion. Turkish imports are five times bigger than Iran’s. With its traditional part in the Iraqi market over the past 15 years, Turkey still stands as Iraq’s top trade partner, with a 22-percent share. Tehran is far behind Ankara. Saudi Arabia is also trying to step in the race. Iraq’s current needs allows Riyadh to find its own status and Iran will be defeated if it continues to compete without a specific strategy.

Iran should come to the understanding that the post-ISIS Iraq is quite different. The country’s people and officials, Shiites, Sunnis, Turkmen, and Kurds, want their home rebuilt as soon as possible. Therefore, any country, that is faster to step in and live up to their expectations, will find a better political status and deeper soft power. It could be Iran, Saudi Arabia, the US, or Turkey.

This becomes even more significant as we approach the parliamentary elections in Iraq, where regional and international players try to pave the way for their influence in Iraq’s politics by empowering political parties and groups affiliated with them. Many observers believe that al-Abadi is also trying to facilitate Saudi investment to gain support from Sunnis.

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8 What can Iran do?

It is natural for the Iraqi government to use the economic potentials of all regional and international players to rebuild the country. Iran should not expect a booked place in the competition.

So what can Iran do to compete? The main policy for Iran to adopt is the empower and equip the private-sector firms. Doubtlessly, Iran could win a larger share in Iraq’s market, if it allocates credit to private firms as Turkey and Saudi Arabia have done. At the moment, the World Bank, the International Monetary Fund, the US, the UK and others have allotted credit to rebuild Iraq, under the condition that Iraq makes purchases from centers they have proposed.

On the other hand, Tehran shall seek to identify existing economic potentials and opportunities in Iraq and start serious talks with the Iraqi government to make investment. An important point is not to limit investment in Iraq to Shiite-dwelling regions. Sunni-dwelling areas most hit by the ISIS should also be targeted.

However, it should be taken into account that the tribal Sunni-Arab demography of the worst-hit areas will have its own challenges for Iran to make investments as the regions are exposed to Iranophobiac policies of Saudi Arabia and the US. Cooperation and negotiation with the Iraqi government and Sunni officials of the country could help overcome the challenge.

In the end, it should be noted that participation in Iraq’s reconstruction is not merely an economic issue, but includes remarkable security and political aspects. The main mission of actors like Saudi Arabia is not to gain economic profits but rather security and political influence in Iraq, and more particularly in Sunni majority regions. One could say actor with the biggest economic wins will be able to have more influence in Iraq’s future developments.

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9 What does Switzerland have to do

with Iran-Saudi relations?

On October 25, Switzerland’s embassies in Riyadh and Tehran signed agreements to represent Iranian interests in Saudi Arabia and Saudi interests in Iran.

First of all, the Saudi Interest Section will function out of the Swiss Embassy in Tehran, whereas the Iranian Interest Section will be located not in the Saudi capital of Riyadh but in the port city of Jeddah.

But immediately after Zarif expressed Iran’s willingness and desire to improve

relations, his Saudi counterpart Adel al-Jubeir dismissed his statement as “laughable”

and indicated that improved relations were not in the foreseeable future.

Not only has there not been any flexibility in Saudi’s hard stance against Iran but Riyadh has also aligned itself with the Trump administration’s new strategy against the Islamic Republic, a point of huge irritation for Iran’s leaders.

Therefore, despite the fact that the Islamic Republic allowed its citizens to go on the hajj pilgrimage Qatar boycotted it all evidence suggests there is little hope for the resumption of diplomatic relations between the two countries, not even at the level of charge d’affaires, such as the one that currently exists between Tehran and London.

However, despite improvements with their Saudi neighbors, neither President

Hashemi Rafsanjani nor President Khatami were able to disentangle the Gordian knot of Iran’s relations with Egypt.

Cairo’s first and foremost condition for renewing relations was that Iran change the name of Martyr Khalid Islambouli Street in Tehran, named after the mastermind behind the assassination of the Egyptian President Anwar Sadat in 1981.

After Iran protested against the beheading of prominent Shia cleric Sheikh Nimr al- Nimr in January 2016 for allegedly taking up arms against Saudi forces to overthrow the government, not only did mobs attack the Saudi Embassy in Tehran and its consulate in Mashhad, but within 12 hours, Tehran City Council changed the name of the street next to the Saudi embassy, dubbing it Martyr Ayatollah Nimr Baqer al-Nimr Street.

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There cannot be even the slightest doubt that the Islamic Republic would reject and condemn any country that appeared to be celebrating such an opposition figure and refer to him as a “martyr,” then name a street after him, and still claim that it wanted normal relations with Iran.

Inevitably, the best available remedy was to designate a third country to represent the countries’ respective interests just the way relations between Iran and the United States and between Egypt and Iran have been managed for close to four decades.

IranWire news website. Hossein Alizadeh. Dated October 30, 2017. Hossein Alizadeh is a former senior Iranian diplomat who now lives in Finland.

On October 25, Switzerland’s embassies in Riyadh and Tehran signed agreements to represent Iranian interests in Saudi Arabia and Saudi interests in Iran. The embassies will provide consular services for both nations in Tehran and in Jeddah. But what impact will the agreements actually have on Iranian-Saudi diplomacy and politics? To gain a full understanding of the significance, it’s important to consider a few key points.

First of all, the Saudi Interest Section will function out of the Swiss Embassy in Tehran, whereas the Iranian Interest Section will be located not in the Saudi capital of Riyadh but in the port city of Jeddah. A number of Iranian diplomats will offer consular services through the Swiss Embassy, but Saudi Arabia refused to allow them to work from inside the embassy in Riyadh.

So why has the Islamic Republic has agreed to this humiliating discrimination? It’s perhaps more important to assess the timing of the agreement. Tehran and Riyadh broke off relations in January 2016, almost two years ago. Since then Riyadh has not appeared to show any interest in restoring diplomatic relations with Iran. Not only that, Saudi also sided with the US in applying pressure to isolate Iran even further.

On the other hand, Islamic Republic officials have clearly signaled that they are interested in restoring relations with Riyadh. “We are prepared to cooperate with Islamic countries on all issues that are important to the Islamic world,” Iran’s Foreign Minister Mohammad Javad Zarif told Al Mayadeen TV on September 6. “If the Saudi government is ready to turn the page, Iran is ready for that as well.”

Zarif’s conciliatory comments came despite Iran’s previous sharp criticism of the way Saudi officials handled the 2015 “Mina Stampede,” when more than 2,000 pilgrims,

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including 464 Iranians, were trampled to death during the annual hajj pilgrimage. But this year, with a green light from Ayatollah Khamenei, about 86,500 Iranians went to the hajj pilgrimage. Afterward, Iran expressed its appreciation for Saudi’s hospitality toward the pilgrims and indicated that it was looking for other steps to improve relations between the two countries.

It is “laughable”

But immediately after Zarif expressed Iran’s willingness and desire to improve relations, his Saudi counterpart Adel al-Jubeir dismissed his statement as “laughable”

and indicated that improved relations were not in the foreseeable future. “If Iran wants to have good relations with Saudi Arabia, it has to change its policies,” said al-Jubeir.

“It has to respect international law. At this time, we do not see... that they’re serious about wanting to be a good neighbor.”

Not only has there not been any flexibility in Saudi’s hard stance against Iran but Riyadh has also aligned itself with the Trump administration’s new strategy against the Islamic Republic, a point of huge irritation for Iran’s leaders. At a press conference in London, Adel al-Jubeir said the international community needed to support new sanctions and policies against the Islamic Republic “in order to send a very strong message to Iran” that its behavior and its “nefarious activities have consequences.”

Therefore, despite the fact that the Islamic Republic allowed its citizens to go on the hajj pilgrimage — Qatar boycotted it — all evidence suggests there is little hope for the resumption of diplomatic relations between the two countries, not even at the level of chargé d’affaires, such as the one that currently exists between Tehran and London.

But people planning to go on Mecca pilgrimages need consular services throughout the year. So the establishment of a channel to ensure these services can be provided is required. Enter Switzerland to facilitate and represent the interests of the two countries.

But now that the consular services have been taken care of, what will be the future for Iran-Saudi diplomatic relations?

Relations between the two countries have broken down before. In 1987, a hajj pilgrimage turned bloody and more than 400 people were killed. The breakdown in

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relations lasted for three years. With the end of the Iran-Iraq War, Iran’s need to rebuild its economy and the death of Ayatollah Khomeini — who had declared: “even if we forgive Saddam we will not forgive the House of Saud” — the groundwork was laid for the resumption of relations when Akbar Hashemi Rafsanjani became president. These relations peaked during the presidency of Mohammad Khatami (1997-2005).

However, despite improvements with their Saudi neighbors, neither President Hashemi Rafsanjani nor President Khatami were able to disentangle the Gordian knot of Iran’s relations with Egypt. Cairo’s first and foremost condition for renewing relations was that Iran change the name of Martyr Khalid Islambouli Street in Tehran, named after the mastermind behind the assassination of the Egyptian President Anwar Sadat in 1981. The street still bears the name and relations between the two countries have never resumed.

An even tougher knot

But now it seems as if relations between Iran and Saudi Arabia have become an even a tougher knot to unravel. After Iran protested against the beheading of prominent Shia cleric Sheikh Nimr al-Nimr in January 2016 for allegedly taking up arms against Saudi forces to overthrow the government, not only did mobs attack the Saudi Embassy in Tehran and its consulate in Mashhad, but within 12 hours, Tehran City Council changed the name of the street next to the Saudi embassy, dubbing it Martyr Ayatollah Nimr Baqer al-Nimr Street.

To understand the diplomatic consequences of such a hasty action, imagine how Tehran would react if a foreign government were to simply communicate with parties and political figures it deemed to be illegal. Now imagine a foreign government went so far as to name a street after a figure who had wanted to overthrow the Islamic Republic. There cannot be even the slightest doubt that the Islamic Republic would reject and condemn any country that appeared to be celebrating such an opposition figure and refer to him as a “martyr,” then name a street after him, and still claim that it wanted normal relations with Iran.

This is the situation that has frozen Tehran-Cairo relations for close to four decades, and it’s the same scenario that has the potential to do the same for Tehran and Riyadh.

Minister of Foreign Affairs Adel al-Jubeir has said that his government sees no difference between the terrorist Osama bin Laden and the terrorist Baqer al-Nimr.

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If we assume that Riyadh has put forward a similar condition to that of Cairo, if the Islamic Republic insists on keeping the name of Sheikh Nimr al-Nimr Street, relations will not resume.

On the other hand, if the Islamic Republic does change the name of the street, the move will be seen as the equivalent of defiling the blood of an individual Tehran regards as a “martyred ayatollah.” It will also be a confession, an admission that Iran was responsible for heightening tensions.

The choice of Switzerland to represent the interests of Iran and Saudi Arabia reveals just how hostile the two countries are toward one another, and how difficult it will be to ever unravel the knot of hatred between them.

Inevitably, the best available remedy was to designate a third country to represent the countries’ respective interests — just the way relations between Iran and the United States and between Egypt and Iran have been managed for close to four decades.

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1 4 Korean news corner

 Farsi-language Iranian Students News Agency (ISNA) reports that writes that Daily Star newspaper has reporting a breaking news that 200 people have died due to the collapse of a tunnel at a North Korean nuclear site. Japanese news media reported that at least 100 people were killed after the tunnel fell, 100 others

were caught the second time the tunnel collapsed during the rescue of the wounded. Reports indicate that the tunnel was located in Punggye Ri and 80 kilometers from the Chinese border. The Chinese authorities have warned North Korea that this incident could happen at Pyongyang’s underground nuclear sites near Chinese border. Chinese scientists had predicted that future tests at this nuclear site could lead to landslides near the border and could cause nuclear radiation along the length of the border.

 Farsi-language Iranian Students News Agency (ISNA) reports that a North Korean newspaper reported on North Korea’s plan to “send more satellites to space” in the next five years. North Korea’s Rodong Sinmun writes: This is a program to strengthen the economic and people’s lives. It is a global action to promote prosperity and economy through space programs. According to this five-year plan, we will launch more satellites, especially those for monitoring the geographic situation.

 Farsi-language state-owned Islamic Republic News Agency (IRNA) reports that South Korean Foreign Minister Kang Kyung-wha said that his country would not apologize to China for installing American anti- missile system known as Thaad. South

Korea’s Yonhap news agency reports that he made the comment before

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attending a parliamentary meeting. He said that the missile system is for defending South Korea from North Korean threat and it is not necessary to apologize to any other country. China says it opposes the deployment of this system because it could reach beyond South Korean borders and could target Chinese missiles. This, China argues, is contrary to China’s national security.

He added that talks have been held with China in this regard and we are trying to hold further discussions between the leaders of the countries in this regard in the future.

 Farsi-language Iranian Students News Agency (ISNA) reports that North Korea has condemned UK for accusing North Korea of being involved in WannaCry ransomware attack. North Korea said that UK was trying to increase

international sanctions against North Korea. The cyberattack took place in May this year, affecting state and trade services across the globe, including the British health system. One third of British state hospitals were affected by the cyberattack. Up to 300,000 computers in 150 countries were hit by WannaCry.

The victims were demanded ransom of $300 and above to be able to use their software and systems. Some researchers have pointed the finger at Pyongyang, saying that the code used was similar to past hacks blamed on Kim Jong-Un’s regime.