Iran is not relying on lifting of sanctions

Vienna means everything

Negotiations are proceeding through carrot and stick brinkmanship on both sides. Meanwhile, reports Yassamine Mather, workers are striking and protesting out of sheer desperation

Rumours about the possible failure of the negotiations in Vienna over Iran’s nuclear programme have caused yet further trauma for an economy already beset by crippling US sanctions and the Covid-19 pandemic.

Unemployment is at a record high, estimated at 40%, while the currency continues to plummet. According to the World Bank, Iran’s gross domestic product per capita has halved since 2017 when the Trump administration started reneging on the nuclear deal and reimposed sanctions. Meanwhile, the country’s public debt in 2021 is estimated to have risen to more than 50% of GDP. All in all, a dire situation, which has produced yet another wave of economic strikes and protests throughout the country.

It is difficult to assess Joe Biden’s intentions regarding Iran. Clearly the current White House administration might tighten sanctions if diplomatic efforts to restore the nuclear deal fail. But Tehran claims to be confident, citing the recent achievements of its nuclear programme in producing highly enriched uranium and progress regarding work on centrifuges.

As far as most Iranians are concerned, however, the economic hardships caused by the sanctions are not worth it - nationalist bravado over uranium, centrifuges and potential nuclear-bomb status do not put bread on the table of ordinary citizens. The Iranian government is now presenting its annual budget for the Iranian year 1401 (‘new year’s day’ is March 21 2022). President Ibrahim Raisi insists that the country should not rely on the lifting of sanctions - taking a swipe at his predecessor, Hassan Rouhani, for making the economy dependent on the whims of ‘foreigners’. So the government is proposing to fund its expenditure with a modest increase in taxation on the wealthy, as well as - potentially - higher crude oil prices: around $60 a barrel.

Surprising as it might sound, despite severe sanctions the Iranian economy grew over the past year and the government is using this as proof of the ability to survive, no matter what. This could be part of the regime’s attempts to out-bluff the P5+1 negotiators in Vienna - the economic situation is not as desperate as the Americans claim and therefore Iran does not need to make any further concessions.

But, as I have pointed out, all this stands in contrast to the mood in the country, where low wages, high prices and mass unemployment continue to trigger protests. Workers in the oil, automobile and agricultural sectors - and more recently teachers - have all moved into action, which soon takes on a political dimension.

Despite the gloomy news regarding Vienna, it appears that the US has relaxed its monitoring and penalising of those who engage in financial transactions and economic deals with Iran - or, at least, that is what the Israeli media is claiming. But there is little doubt that Iran has been able to sell more oil on the world market than it did in the Trump era.

Tanks debt

Last week a delegation from the British foreign office was over in Tehran discussing carrot: ie, the payment of a £400 million debt, superficially as part of its effort to secure the release of Nazanin Zaghari-Ratcliffe - the British-Iranian dual citizen who was jailed in 2016 for “plotting to topple the Iranian government”. She is, in fact, a mere pawn - for both sides. Once the Iranian ambassador in London let the cat out of the bag by telling the media about the visit, foreign secretary Liz Truss said this:

We do want to pay this debt - we recognise it’s a legitimate debt, but, of course, there are lots of issues. It is not simple, for various reasons. I’m also pressing for the return of our unfairly detained British nationals, including Nazanin.

The UK debt relates to Iran’s payment in the 1970s for the purchase of Chieftain tanks. But, following the 1979 revolution, the tanks were not delivered, yet the UK government sat on the money. The Islamic Republic has won a number of legal cases in the UK regarding this debt and last week there were suggestions that the £400 million can be returned in the form of ‘humanitarian aid’, prompting this response from Mohsen Baharvand, Iran’s ambassador:

It’s not aid. Our money is here and we want our money. That is very simple. We want to receive our money. We are not even insisting on interest. Otherwise it would be billions. We are talking to our UK colleagues as to which channel is the most probable to transfer that money to our accounts.

Once more there is almost no mention of all this in the British media - although BBC Persian has shown its Farsi-speaking viewers a video of the Westminster foreign affairs committee, where former foreign secretary Jeremy Hunt challenged Boris Johnson about both the debt and the possible method of payment.

Hunt refers to an occasion during the Obama presidency when a planeload of US dollars was sent to Tehran in order for the US government to avoid sanctions. Yes, you read it correctly: it avoided its own sanctions. Ordinary Iranians have faced tough penalties for just sending money home to friends and relatives. Often their accounts are frozen - while, on the other hand, the US government itself sent a planeload of cash. Anyway Hunt asked Johnson if a similar plan was now being discussed as a means of paying the “tanks debt”, while at the same time securing the release of dual nationals from Tehran. In his usual manner Boris Johnson huffed and puffed, but he did not deny the suggestion. This week there was also talk of the US giving written confirmation to the British government to allow the ‘legal’ transfer of this debt to Tehran, free from any potential penalties.


Over the last couple of weeks teachers in more than 60 towns and cities have been protesting over low salaries, poor working conditions and the constant micro-management and ‘evaluation’ of their work. They also staged a three-day strike, culminating in demonstrations on December 13.

In some major cities, including Tehran and Shiraz, demands included the release of arrested teacher activists. Videos on social media show them outside the Majles (parliament) shouting at the security forces, who were trying to break up their demonstration: “Shame on you!”

This seems to have had an effect, because on December 14 the government, and even conservative parliamentarians, seemed so concerned that they voted for pay rises for teachers as well as university lecturers. Of course, this might not amount to much. After all both teachers and university lecturers often face months when their wages go unpaid!

Having said that, the teachers are in a good position to continue their protests. They have established a nationwide network, allowing them to communicate and organise with speed and effectiveness. They are computer-savvy and they are also using mobile devices to film and distribute news of their strikes and demonstrations. However, like many similar protests, these remain defensive: a desperate response to a desperate economic situation.

We need to show solidarity with Iranian teachers and support their strikes in a principled manner. At the same time, despite our opposition to the Islamic regime, we must denounce the threats against it - from Israel, of war, and from the US, of more sanctions - if the P5+1 negotiations in Vienna fail to achieve a nuclear deal with Iran.