As Hassan Rouhani approached the first 100-day mark of his presidency, he was up against popular discontent for his inability to restock the empty treasury he inherited from his predecessor, Mahmoud Ahmadinejad.
DEBKA Weekly’s exclusive Iranian sources disclose that Rouhani jeopardized his own position by trying to convince the supreme leader, Ayatollah Ali Khamenei, that without an accord with the six world powers in Geneva for the release of sanctions, there was no money to pay the less than $20 a year direct subsidy to every consumer that was introduced by Ahmadinejad.
Not only was the $15 bn missing for this purpose, but there were no resources for meeting other essential needs. And so the economy would keep rolling down toward an abyss and eventually popular ire would explode in the streets.
On the eve of the Geneva talks, Rouhani and his foreign minister Javad Zarif confronted Khamenei and the Revolutionary Guards leaders with this quandary. They met such harsh reproof that the president and foreign minister decided to start watching their own backs, because the gulf between them and the hard-liners was widening under their feet.
Although Rouhani addressed the supreme leader courteously and respectfully, Khamenei warned him he would be punished for his “impertinence” and then humiliated him in public by seating ex-president Ahmadinejad in the president’s seat on the saluting dais at the Ashoura festive parade.
Galloping inflation and unemployment
Rouhani understood the message. But Western media and the Obama administration brushed it aside in their eagerness to press for a diplomatic achievement in Geneva. The Iranian street had meanwhile caught on to the ending of the brief period of smiles, on which Barack Obama grounded his drive for détente with the Islamic Republic, and its regression to the grim nuclear era overseen by the dour Ahmadinejad.
The data gathered by DEBKA Weekly’s sources, show that sanctions have halved Iran’s oil revenues, at the very least. Mohammed Ahmadi, a member of the parliamentary finance committee warned that the rate of inflation is galloping past the 38 percent mark. A secret report circulated among regime heads disclosed the rate of inflation as having climbed past 40 percent and unemployment soaring to 15 percent.
The vast sums needed urgently to keep the country from descending into an economic morass could be raised in part by upping the prices of fuel products or deflating the currency – or both. But these remedies could push the prices of consumer essentials up into a dizzying spiral.
Iran’s only sensible source of cash is to be found in sanctions relief, however partial. It is this message that Rouhani and his allies tried to drive home, without much success.
Zarif plays by the rules
Indeed, the supreme leader told them to shut up or pay the price for their outspokenness.
In Geneva, Foreign Minister Zarif confided that he knows a hangman’s noose awaits him at home if he steps out of the red lines set by the supreme leader. But don’t worry, he added, I won’t disobey the rules so I’ll be safe.