Sanction Pain Spurs Iran's Charm Offensive - Wall Street Journal

Written By The USA Links on Monday, 23 September 2013 | 17:12

(Top Stories - Google News)

BEIRUT—Iran’s President Hasan Rouhani aims to reshape the Islamic Republic’s image at the United Nations this week in a charm offensive motivated in large part by the dire condition of his country’s economy.


At Tehran’s international airport before departing for New York, Mr. Rouhani told reporters that he would seek “a path for negotiations and moderation” to replace the economic sanctions that have defined the West’s relationship with Tehran in recent years.


That diplomatic tone—expected to permeate Mr. Rouhani’s address at the U.N. General Assembly on Tuesday—represents a sharp reversal from the rhetoric of his predecessor, Mahmoud Ahmadinejad, who used the annual U.N. gathering to provoke the West by questioning the Holocaust and alleging a U.S. role in the terrorist attacks of Sept. 11, 2001.


The shift comes after a year in which Iran has seen its oil revenue—which the government and industry analysts say totaled $100 billion in 2011—fall to half that level because of a European Union oil embargo and banking restrictions.


The impact of sanctions has now fully trickled down to Iranian consumers, who are contending with soaring inflation, a lack of affordable medicine and a fluctuating currency. Business executives, industrialists and merchants who hold regular meetings with Iranian officials said the need for relief from sanctions often dominates their discussions.


“Everybody in Iran is hoping that Rouhani will come back with some good news about removal of sanctions from New York because the country can’t survive otherwise,” said a Tehran industrialist named Hussein, who asked that his last name be withheld.


The Supreme Leader Ayatollah Ali Khamenei has given Mr. Rouhani his blessing to shift Iran’s foreign and nuclear policy from defiance to reconciliation.


Mr. Khamenei said last week that he favored a “heroic leniency” when it comes to diplomacy.


Mr. Rouhani then said that he had full authority to make deals with the West. The statement was a departure from previous presidents, who had publicly acknowledged that they didn’t control the country’s sensitive policies when it came to nuclear negotiations or rekindling relations with the U.S.


The shift comes as international sanctions on Iranian banking and oil exports rattle Iranian leaders.


“The experience of the past year has shown that sanctions are extremely effective and naturally the regime couldn’t sustain the status quo, something had to give,” said Hossein Bastani, a political analyst based in London, who served as an adviser to Iran’s reformist government under another former president, Mohammad Khatami.


Mr. Rouhani’s representative to parliament said this week that an estimated $600 billion has been pulled out of Iran in the past few years because of market instability.


The minister of finance said recently that the economy was expected to be flat this year, with zero growth.


Iran’s Chamber of Commerce, a government-affiliated group, held its annual meeting with member chapters from across the country on Sunday.


In the keynote speech, the head of the Chamber, Mohamad Nahavandian, who is accompanying the president to New York, told the audience that the public needed to be informed about how badly the economy was suffering from sanctions and the loss of business opportunities and investments.


Mr. Nahavandian said Mr. Rouhani’s government was the country’s best hope for improving the economic hardship because of his pledge to reach out to the world.


“We are expecting better days for our economy,” said Mr. Nahavandian, according to Iranian media reports. “Iran is facing a big opportunity, therefore we have a big responsibility.”


Mr. Rouhani intertwined economy and foreign policy during his campaign for the presidency, and in his remarks since winning the vote with a landslide in June.


The Iranian president is scheduled for a five-day diplomatic blitz in New York, meeting with diplomats, journalists and scholars. Foreign Minister Javad Zarif will also hold meetings and interviews.


Mr. Zarif will meet this week with the U.S. Secretary of State John Kerry and their counterparts from the five other major powers who are negotiating to contain Iran’s nuclear program, the European Union’s foreign-policy chief said Monday.


Iranian media devoted front-page headlines to Mr. Rouhani’s trip to New York and speculations on whether he would meet and shake hands with President Barack Obama, who also addresses the General Assembly on Tuesday.


On news websites open to reader commentary, including conservative ones, the majority of comments favored a U.S.-Iran rapprochement.


“We the people have sent our representative named Mr. Rouhani to the United Nations to engage with the world,” one person wrote on the semiofficial Khabaronline news website, which is affiliated with the speaker of parliament.


Write to Farnaz Fassihi at farnaz.fassihi@wsj.com






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