TEHRAN — With downgraded nuclear talks with world powers set to begin Tuesday, there are growing signs in Iran that Western sanctions are hurting the nation’s economy and alarming its decision-makers.
Authorities remain defiant, but they increasingly are acknowledging publicly the economic pressures that Iran is facing.
Their proposed responses range from military confrontation — including renewed threats to block the strategic Strait of Hormuz — to economic countermeasures. The reaction illustrates the range of voices vying for influence at a particularly tense period in the Islamic republic’s history.
On the eve of low-level technical talks in Turkey over Iran’s nuclear program, Iranian Foreign Minister Ali Akbar Salehi warned Monday that “the other side has no choice but to find an agreement; otherwise confrontation will be the alternative,” the semiofficial Iranian Students’ News Agency reported. The talks, following three rounds of unsuccessful negotiations between Iran and six world powers, are aimed at finding enough common ground to salvage the negotiating process.
At the same time, Iran’s Revolutionary Guard Corps on Monday began three of days desert missile tests to display its preparedness for airstrikes and show off potential responses. “In view of the enemies’ threats at this juncture, the air defense is one of the highest priority issues for the Islamic republic,” said Maj. Gen. Mohammad Ali Jafari, the Revolutionary Guard commander.
The highly publicized exercises come amid continuing threats from lawmakers in Tehran that Iran may block the Strait of Hormuz in response to new U.S. and European Union measures against the country’s oil industry.
Javad Karimi, a member of parliament’s Commission for National Intelligence and Foreign Policy, said Monday: “There is a plan in parliament to stop tankers that are carrying oil bound for the U.S., E.U. and Israel from passing through the Strait of Hormuz. . . . This is a retaliation against those countries that sanction our oil.”
As of Sunday, 100 members of Iran’s 290-seat parliament had signed the measure.
Besides flexing its military strength, Iran has been busy addressing its increasingly isolated economy.
As the economic realities of life under new sanctions become clearer, the Iranian central bank announced Sunday that it holds a reserve of $150 billion. Central Bank Governor Mahmoud Bahmani pledged, “We are implementing programs to counter sanctions, and we will confront these malicious policies.”
Bahmani also cautioned that “the rise in prices in the last few days is purely political and psychological,” and he asked Iranians not to give in to such pressures.
Interior Minister Mostafa Mohammad Najjar was more willing to acknowledge the impact of sanctions when he told a meeting of provincial governors Monday: “Sanctions are measures taken by our enemies to stop our progress. We have been able to bypass such problems, though there are difficulties like high prices. But with correct planning we can stop the rise and disappoint our enemies.”
Despite such assurances, many Iranians are worried about making ends meet in their new economic situation, as spending power has been decimated in recent months and continues to decline more quickly than the state can react.
In response to those concerns, the Ministry of Economic Affairs and Finance announced that the prices of water, cooking gas, electricity and gasoline would not increase this year. These resources were all heavily subsidized until late 2010. Utility prices went up tenfold in some cases when the subsidies were eliminated and replaced by monthly direct payments to more than 90 percent of Iranian citizens.
Foreign Ministry spokesman Ramin Mehmanparast blamed the United States and European Union, accusing them of “threatening world security” by implementing sanctions against Iran. “They have to be considered responsible for their actions, which worsen the global economic crisis,” he said.
Another source of anti-American rhetoric Monday was the anniversary of the accidental downing of an Iranian commercial airliner by the guided missile cruiser USS Vincennes on July 3, 1988, over the Persian Gulf.
Families of the victims gathered, as they do every year, to remember the 290 passengers and crew members who were killed that day. In the calm waters just off Bandar Abbas, the major Iranian port where the flight originated, they held the annual state-sponsored ceremony.
In sweltering heat, oil tankers, cargo ships and local fishing boats bobbed in the water, where much of the usual bustle of commerce has ground to a halt as sanctions take greater hold.
The port is usually the starting point for Iranian crude oil shipments to global markets, as well as the entryway for smuggled goods to be sold throughout Iran. But these days the most common activity in Bandar Abbas is simply waiting to see what will happen next.