The best newspaper report on Iran since the blasted country was created. What to make of the data?

"I heard this sort of resentment all over Iran, in the poorest shanty towns and in the wealthy enclaves of north Tehran: Why are we helping the Arabs, why are we spending billions rebuilding Beirut and even more billions winning control of southern Iraq and western Afghanistan, why are we financing Hamas and Hezbollah and Iraq's Mahdi Army, when our own poverty and unemployment is overwhelming?"

Canadian journalists have been denied entry to Iran for two years -- ever since Canada's government made a huge stink about the imprisonment and murder-by-torture death of a Canadian journalist, whose only offense was photographing the outside of an Iranian prison.

So award-winning Canadian journalist Doug Saunders risked imprisonment and torture, not to mention his life, by entering Iran without the knowledge of Iran's government in order to report for his newspaper, Canada's Globe and Mail. He spent two weeks traveling around Iran to gather the news. Saunders emerged in February with the most objective and comprehensive report I've seen on the way things now stand in Iran -- and in particular how Mahmoud Ahmadinejad's presidency is holding up.

You can't make foreign policy, much less run a war, on bits and pieces of data and faith-based journalism. That's just about all we've had on Iran until Saunders's big-picture report.

In mid-December Pundita grumbled about the sorry reporting on Iran: "Much of the intelligence that Americans have taken about Iran has come from urbanized, educated, democracy advocates in the Iranian expat communities who are in close contact with university student activists in Iran."

Having been led down the garden path by rosy reports from such Iranians in the runup to Iran's presidential election, I was unwilling to be led to the assumption that Ahmadinejad had become widely unpopular in Iran. But as I wrote those words a groundswell was forming.

Doug Saunders reports that within the past three months, Ahmadinejad's failure to keep his promises and fix the badly ailing economy has whipsawed him: Iran's rich and poor and conservatives and moderates are seriously pissed off. Maddy is fighting for his political life.

Saunders does not engage in faith-based journalism, so he does not try to answer the big question, which is how the troubled presidency will play out. The most he'll allow himself to observe is that events could fall either way: toward more oppression or liberalization. But Saunders's report does make clear that a change is coming in Iran:

[...] the main effect of [Ahmadinejad's] economic policies, which have maintained the heavily state-owned economy that produces hardly any revenues beyond oil incomes, has been galloping inflation and rampant unemployment.

And in the final insult, Iran, the world's fourth-largest oil exporter, has run into severe gasoline shortages. It has had to import billions of dollars' worth of gasoline, because it has neither enough refineries to serve its people nor the investment to exploit its full reserves.

More than 6 per cent of the oil it drills is lost to leakage, and there is no apparent interest in fixing the leaks because the state monopoly has little incentive to do anything. The society, one former Finance Ministry official tells me, is “dying of petroleum poisoning." [...]

“This past year and a half has been very difficult for us,” says Hamid, 20, who with his father runs Istanbul Greengrocers, where the President used to shop. “Prices for all the fruit and vegetables have doubled. It's the inflation that's done it. And people can't afford to buy more than the absolute minimum of produce, because 100 per cent of their salary is taken up with rent, which has doubled."

[...] From its very beginning in 1979, the Iranian revolution has always been an equal mixture of Islamic fundamentalism and Marxist class-struggle rhetoric. The Ayatollah Khomaini won his core support, and most of his revolution's financing, from the moneyed merchants of the Tehran bazaar, and their desire to maintain an import-sale monopoly and tax-free status has been a big part of the revolution's continued support. The bazaaris, as they are known, have long been considered the sine qua non of the regime's hold on power.

Over tea at the bazaar one morning, I speak to two of the merchants who supported the revolution from the beginning. The mood is sour -- there is a sense that consumer spending has dribbled away and is not likely to reappear. And while the conservative families of the bazaar have no objection to Islamism and its social repressions, they become concerned when it starts to interfere with their livelihoods.

Sajjad, who imports Black and Decker tools and T-Fal appliances, says he is feeling the effects of Iran's rogue-state status. “We're having serious problems with making payments for our orders. Whenever the President says something about nuclear weapons or Israel, another European bank stops doing business with Iran. It's getting increasingly difficult to find a way to send money to the exporters. It's really hurting us and, frankly, I don't know what to do if it gets worse.”

His neighbour, who imports Braun and Philips products, fears the sabre-rattling will put him out of business. “The people don't spend money when they are doubtful — and they are doubtful now. They don't know if there is going to be a war.”

In the 1980s, Iran could get by on its own resources. But today its economy is deeply dependent on imports. Most of the cars on the road are Peugeots and Toyotas, with the Iranian-made Paykans rusting on their suspensions. Private homes, even poor ones, are equipped with imported washing machines, satellite dishes and cook stoves.

Mr. Ahmadinejad may want to keep his new Islamic revolution separate and distinct from his new economic nationalism, but the two are headed on a collision course.(1)

Many thanks to Doug Saunders and The Globe and Mail for the February 10 report -- and thanks to Regime Change Iran blog for scooping up the report, which is where I found it.

Two big surprises for me in Saunders's article are widespread anger in Iran about the costliness of Ahmadinejad's foreign policy initiatives and disenchantment in Qom (the seat of the Islamic revolution) with the revolution:

[...]But there are two enormous population movements taking place in Qom, and they are microcosms of the Iranian dilemma. For one thing, the young generation is becoming restless.

In Iran, 70 per cent of the population is under 30, because of a huge revolution-inspired baby boom, and it's hard to find a young man or woman here who has anything good to say about the President.

“Our research shows that more than 80 per cent of the young generation of Qom want to leave, ideally for Tehran, as soon as they're married, and that the overwhelming majority of them do not support the revolution any more,” says an Iranian sociologist who has just completed a major survey of Qom's youth. The study will be published in France, because its authors fear government reprisals in Iran.

Much of their anger is directed at another boom in Qom: the 11,000 foreign students who are sponsored by Mr. Ahmadinejad's government to attend Islamic schools, often with their families in tow.

This is a hugely expensive venture, a small part of the massive state effort to spread the Islamic revolution's values across the Middle East and around the world. In Qom, the resentment directed at these privileged visiting students by the local youth is palpable.

“We have no life here, no way to make a living or change our circumstances, and all the money is going to help these Arabs who are already well off,” one young man tells me as he loiters with friends in the centre of an uptown boulevard. Until last year, they would have strolled with their chador-clad girl friends along the sidewalk, but the city government banned window-shopping in order to prevent such socializing.

I heard this sort of resentment all over Iran, in the poorest shanty towns and in the wealthy enclaves of north Tehran: Why are we helping the Arabs, why are we spending billions rebuilding Beirut and even more billions winning control of southern Iraq and western Afghanistan, why are we financing Hamas and Hezbollah and Iraq's Mahdi Army, when our own poverty and unemployment is overwhelming?

This year, that dilemma was expressed for the first time by Iran's spiritual leaders. It began in December, when student protests against the President at Tehran University were broadcast on state television — seen as a clear indication that Ayatollah Khamenei, the Supreme Leader, wanted it shown. He regulates television personally.

Then, this month, the two leading opposition groups, Akbar Rafsanjani's Militant Clergy Association and Mr. Khatami's Militant Clerics League, joined forces to call for the President's impeachment, stinging him repeatedly with accusations that his failure to introduce a market economy had been a betrayal of the revolution's values.

They cited the Supreme Leader in their attacks, and the silence from the ayatollahs who oversee the government seemed to indicate that they were sympathetic.

Mr. Ahmadinejad and his opposition are in the midst of an epic battle for the attention of the Supreme Leader, and it isn't clear who will win.(1)

The battle includes a positioning struggle for Iran's top slot. See this report from World Press for a scorecard on who's where in the running for the role of Supreme Leader.

Whether or not the rumor is true that Ayatollah Khamenei is seriously ill (I note that Saunders does not mention the rumor), there's a lot of dirty pool right now. See
this link -- again from Regime Change Iran:

Safa Haeri, Iran Press Service reported that the office of former reformist president of Iran Hojjatoleslam Mohammad Khatami has been “raided” overnight by unidentified people who have taken away all the computers, documents, fax machines and other equipments.[...]

Khatamai and other so-called moderates who have been subjected to the same kind of burglaries should count their lucky stars that they haven't ended up like that murdered Canadian journalist.

Which brings me to an understandable shortcoming in Saunders's report: given his precarious situation in Iran, he couldn't very well stroll up to a barracks and ask, "So how ya doin?"

When push comes to shove, I think what really matters is how Iran's military views Mr Maddy. I've seen mentions that there is great tension between the regular military and the Quds force, which reports to the Supreme Leader. But to read into the observation a sign of the government's impending collapse is more faith-based journalism.

All that Saunders has to say about the military is that Iran is a highly militaristic society. Yet I think that one fact, more than any other, could determine the outcome of the power struggle and decide Ahmadinejad's political fate.

Next turn to Signals From Tehran, February 23 report from the Washington Post's David Ignatius (another great reporter who eschews faith-based journalism) to see how things are doing at the other end of the chain of events. If Iranians now feel themselves frying on the griddle of world opinion, Washington and the EU3 are keeping up the sanctions pressure on Tehran -- and now Moscow has added their muscle to the negotiations. As to the result, Ignatius reports:

"We're getting pinged all over the world by Iranians wanting to talk to us," Undersecretary of State R. Nicholas Burns said in an interview yesterday.

The problem, says Burns, is that the Iranians haven't yet said the "magic word," which is that they will actually suspend enrichment in exchange for the suspension of U.N. sanctions.

With Iran still publicly defying the United Nations over its nuclear program, the United States and its allies agreed yesterday to tighten the pressure another notch by preparing a second U.N. Security Council resolution with additional sanctions. Burns said Russia and China agreed to back the new resolution in a meeting yesterday with Secretary of State Condoleezza Rice. "It may not be substantially stronger, but it will be stronger," said Burns, who will travel to London [today] to negotiate the details of the new resolution.

U.S. and European officials think Iran's new interest in negotiations is a sign that pressure on Tehran is working. The campaign includes the initial U.N. sanctions resolution, which shook the Iranians because it was backed by Russia and China; tough U.S. banking sanctions, accompanied by a successful Treasury Department push to dissuade European and Japanese banks from lending to Iran; and calculated muscle-flexing by the Bush administration, which has sent an additional aircraft carrier task force to the Persian Gulf and seized Iranian operatives inside Iraq.

"We are hopeful that all these pressure points will influence the internal debate in Iran," says Burns. And they appear to be doing just that.

The multipronged squeeze on Tehran surprised President Mahmoud Ahmadinejad and other Iranian officials, who seemed confident when I visited the country in September that they were in the driver's seat and that it was the United States that was weakened and isolated. "We knocked them off stride and put them on the defensive," argues Burns. A British official who follows the issue closely agrees: "The Iranians have moved from cockiness to division and nervousness."

[...] So does all this mean it's time to go back to the bargaining table? Not yet, say a number of U.S. and European officials. They insist that the Iranians must stop haggling and agree to quit enriching uranium. Russian officials told me in Moscow last week that President Vladimir Putin passed the message to a top Iranian emissary this month that Tehran must agree to a "timeout" in enriching uranium if it wants to settle the nuclear issue.

The Iranians continue to dicker, in what Western officials regard as a tactical ploy to get out of trouble. Their efforts center on paragraph eight of the "Gentlemen's Agreement" their officials have been circulating. That part of the document proposes that if U.N. sanctions are lifted, Iran would agree to a two-month period "during which Iran in a voluntary and non-binding and temporary move avoids installation of next cascades" for enrichment.

In other words, the Iranians wouldn't add additional centrifuges that would allow industrial-scale enrichment but would continue spinning their modest initial cascade of centrifuges.No deal, say U.S. and European officials.

The only way the Iranians can escape sanctions is to suspend enrichment and sit down at the table. If they do so, an array of goodies awaits. Meanwhile, the strategy of confrontation continues, and U.S. and European officials -- who haven't had much to cheer about recently -- seem confident that it's working.

Okay, now read the rest of Doug Saunders's report so you can treat yourself to an accurate picture of present-day Iran.

1) Inside Iran, February 10, The Globe and Mail. Here's their reader-friendly one-page version of the report. And here's the one-page version of Inside Iran from Regime Change Iran blog.