IRAN EXPERTS REACT TO US ELECTIONS WITH SURPRISE,

S E C R E T SECTION 01 OF 03 ISTANBUL 000560

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E.O. 12958: DECL: 11/05/2028
TAGS: PREL PGOV IR US TU
SUBJECT: IRAN EXPERTS REACT TO US ELECTIONS WITH SURPRISE,
HOPE, CAUTION, AND CONCERN

Classified By: Deputy Principal Officer Sandra Oudkirk; Reason 1.5 (d)


1. (S) Summary: Our contacts in Turkey and in Iran who
follow US-Iran relations closely, including think tank
experts, correspondents, and businessmen, have expressed a
range of reactions regarding the implications for US-Iran
relations to the election of Barack Obama. Their views ran
the gamut from caution and cynicism, to hope and surprise, to
some concern that the USG, in a rush to improve relations,
might accept a deal that renews official relations but
abandons the Iranian people's desire for more freedom and
opportunity. Within the range of remarks, one theme seemed
to enjoy some consensus: that this election outcome may
offer an initial step in what could become a process of
careful diplomatic confidence-building on both sides, but
that such a process would likely be long and drawn-out, that
many risks and pitfalls (and opponents) would confront the
process, and that improved relations with the Iranian regime
and with the Iranian people are not necessarily the same
thing. End summary.


2. (C) We polled contacts in Turkey and in Iran who closely
follow US-Iran relations to gauge their reaction and their
assessment regarding the implications of President-elect
Obama's victory for future US-Iran relations. We spoke to
several Iranian think tank experts, two Istanbul-based
western correspondents with extensive Iranian reporting
experience, and two Tehran-based businessmen.

From Caution and Cynicism to Surprise and Hope
--------------


3. (S) Consulate Istanbul's "Iran Watcher" met several days
prior to the US elections with a group of visiting
researchers from the "Center for Strategic Research" (CSR)
(please protect),a think tank affiliated with Iran's
Rafsanjani-led Expediency Council, and considered by many to
be Iran's leading think-tank. (Indeed, one CSR researcher
speculated to us that in the event a "pragmatic" candidate is
elected President of Iran next June, she expects many of
CSR's staff would return to the Iranian NSC and MFA to help
steer Iranian foreign policy, "just like will happen with
Brookings in Washington.") Two CSR experts, while welcoming
an Obama election victory, downplayed its immediate impact,
cautioning that US-Iran relations were so complicated and
delicate that it would still take concerted, step-by-step
efforts "on both sides" to bring about a meaningful
improvement in relations. The issues matter at least as much
as the personalities, one added, especially the nuclear issue
and sanctions. One researcher suggested that even though
Supreme Leader Khamenei has the authority to decide whether
and when to allow improved relations, he cannot do so until
he can demonstrate that Iran has secured tangible benefits or
conciliatory gestures from the new U.S. administration. The
researchers pointed out that Iran's own presidential campaign
season will not gain full speed until March (around the same
time that the Obama administration's full team of foreign
policymakers would likely be in place). That election
campaign could complicate or even stall any moves towards
improved relations. One researcher cautioned that Iranian
Presidential candidates may try to attack each other for
being too soft on the U.S., even as they maneuver to take
credit for any improved relations.


4. (S) According to retired Iranian Ambassador Seyed Rasoul
Mousavi (ref A, please protect),the Director of the
Institute for Political and International Studies (IPIS),a
think tank affiliated with the Iranian MFA, "the situation
between Iran and the U.S. is so complicated that it won't be
solved simply by changing Presidents there or here."
Conveying his views to Istanbul's "Iran Watcher" through a
mutual acquaintance, Mousavi explained that "there are many
other internal, regional, and international factors which
affect Iran-US relations. Presidential elections are the
easiest of the factors to assess." He argued that regional
states like Israel and the Gulf states are so opposed to
improved US-Iran relations that an Obama administration would
find itself bogged down as it tries to win their support for
such a policy. "Pakistan and Turkey also have reasons to
benefit from the current state of US-Iran relations, as do
China, Russia, and some in the EU. Improved relations
between Iran and the US are not in their interests." He
acknowledged that a new US administration offered a timely
opportunity for both sides to reassess whether more common
interests might be identified and cooperated on, for example
Afghanistan, but he ultimately dismissed the US election
outcome as likely, by itself, to have an immediate impact on
US-Iran relations.


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5. (C) An Istanbul-based western news correspondent who was
previously based in Tehran cautioned that "Obama's victory is
unlikely to presage any immediate gesture coming from the
Iranian leadership that could be interpreted as a diplomatic
breakthrough." He speculated that the pragmatic element of
Iran's leadership, including Majles Speaker Larijani, former
President and current Expediency Council and Assembly of
Experts Chairman Rafsanjani and Tehran Mayor GHALIBAF,
consider President-elect Obama as someone that Iran "can do
business with." The correspondent's wife, an Iranian
national who maintains close contacts with Iranian media and
cultural intelligentsia, noted that although the election
outcome will raise Iranian popular hopes for quickly-improved
relations, Iranians are tempered enough by experience not to
expect miracles. "Relations with the US have been frozen for
so long that conceiving of something different is outside
most people's mental ability." The correspondent and his
wife identified the "great unknown in the equation" as being
the views of Supreme Leader Khamenei and President
Ahmadinejad. "Ahmadinejad wants to get any credit for
improved relations with the U.S.," to better bolster his
re-election chances, especially as falling oil prices and
rising inflation are increasingly blamed on him and his team.
But Khamenei will likely be more cautious, the correspondent
predicted, and remains suspicious of the motives behind U.S.
interest in improved relations. Our contacts speculated that
Khamenei would only allow steps leading to improved relations
if he first concludes that an Obama administration's ultimate
goal is not regime change, but rather working with the regime
on issues of mutual interest. "There will be an ample period
of wait-and-see in Tehran," the correspondent concluded,
"before the Supreme Leader feels he needs to make a decision
about whether to allow improved relations."


6. (C) Another Istanbul-based western correspondent with
extensive experience traveling to Iran and engaging Iranian
officials, predicted that Obama's election will lead, in the
short term, to palpable relief in Tehran, as most Iranians
believe the military option will no longer be on the table.
He argued, however, that the GOI will expect the first
tangible steps towards improving relations to come from
Washington. "The Iranians are often in reactive mode: when
the US sends positive signals, they have often responded in
kind, in their own way. Likewise, when Washington turns up
the rhetoric, Tehran also responds in kind." He recalled
that Khamenei in January prepared the ground for possible
improvements in relations by stating publicly that poor
bilateral relations were not necessarily a permanent
condition, and that as Supreme Leader he would decide if and
when it is in Iran's interests to renew ties. Meanwhile,
from Ahmadinejad's perspective, "the ball is in the U.S.'s
court anyway, given all his efforts to reach out during his
UNGA visit." Iranian leadership circles almost certainly
expect the next gesture to come from the U.S. side, and will
interpret the extent of the gesture as a test of an Obama
administration's intentions.


7. (C) The correspondent added that "contrary to received
wisdom that piecemeal and secret efforts are the most
effective ways of resuming this relationship -- which have
actually led every time to blow-ups and blood-letting on the
Iranian side -- and considering all the recent talk about the
need to engage Iran on issues of common interest, the one
thing this election provides both sides is an excuse to do
something much more dramatic: for top leaders on both sides
to make public commitments to proceed with
confidence-building measures, with the stated goal of
renewing diplomatic ties." He cautioned that if, in this
context, the U.S. offers a gesture along the lines of sending
U.S. diplomats to the US Interests Section in Tehran,
"Washington should not be surprised if the first reaction in
Tehran is fire-breathing opposition, which Khamenei would not
necessarily quell right away. Reacting in kind would be a
mistake, as that is how Khamenei will test US intentions."
Patience, and responding only to statements from Khamenei,
rather than from second-tier officials, will be the key to
navigating better relations, he suggested.


8. (C) A Tehran-based policy analyst suggested that with the
GOI's position already weakened by the fall in oil prices and
by tightening lines of credit resulting at least in part from
financial sanctions, the regime will be eager to look for
ways to ease the burden of sanctions. The GOI is likely to
see an Obama administration as far more willing to negotiate
an overall framework deal with Iran, including striking
compromises on the nuclear issue that would allow for a
suspension of UNSC and national sanctions. Given the wide
range and complexities of the issues involved, however, the
analyst cautioned that such an engagement would likely only

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emerge in the second half of 2009, after Iranian Presidential
elections, and may be preceded by both sides raising pressure
on each other tactically, to improve respective bargaining
positions.

Tempered by real concerns
--------------


9. (C) An Iranian businessman who works for a private
telecommunications firm in Tehran described the current
situation in Iran as a complicated puzzle, in which the UNSC
and western sanctions are bad because they are hurting the
Iranian people, but also useful because they are making the
regime feel vulnerable; and in which President-elect Obama's
election victory is inspiring because it shows the openness
of America, but also risky because Obama might not deal
firmly enough with the GOI. Our contact bemoaned that his
company has been devastated by recent economic conditions in
Iran, which he blamed in part on UNSC and western sanctions,
and in part on the GOI's economic incompetence. (Comment: We
will report more detailed views from him about the Iranian
telecommunications industry's woes by septel). He
characterized the Iranian population, presumably the
middle-class, professional, educated Iranian demographic of
which he is a member, as "desperate" for improved relations
with the West. But he believed that the Iranian regime's
hard-liners benefit from poor relations with the west, and
the GOI will therefore remain opposed to improved relations
with the U.S. under President-elect Obama unless or until it
feels it is on the verge of losing power as a result of
Iran's economic collapse. He cautioned against a quick
lifting of western pressure on the regime, despite his
despair over the impact of sanctions. "If Mr. Obama says too
many nice things to Iran right away, the regime will think he
is weak and it will not be scared into making a deal." Keep
up the pressure on the regime, he urged, but also keep giving
hope to the Iranian people that a brighter future is coming
soon.


10. (C) A retired Iranian roofing company owner, whose three
adult children all left Iran this year (two daughters to the
U.S. and a son to Australia),offered that most Iranians he
knows are deeply pessimistic. They expect prices of basic
necessities like food, clothing, and rents, to keep rising,
and quality of life to keep declining. "We are all cynical
about the future." He suggested that most Iranians were
pleasantly surprised that Obama was elected, which "proves to
everyone that the American electoral system is more tolerant
and free than Iran's, by far." He also had some friends who
were wishing for a McCain victory, as McCain was seen as more
willing to "use force" to compel the Iranian leadership to
change its "corrupt system" of governance. Many Iranians'
hopes for improved relations as a result of Obama's election,
however, are tempered by concerns that the USG might
sacrifice its interest in improving the lives of average
Iranians in the name of better relations with the government,
according to this contact. "They will say anything to stay
in power. Your new president is inexperienced. When you
start talking to the Iranian government, just don't forget
about the Iranian people. Don't abandon us over a nuclear
deal."

Comment
--------------


11. (C) It is not surprising that we would hear such a range
of reactions regarding the implications of President-elect
Obama's victory on US-Iran relations, given the vibrancy of
political discourse even in today's politically and socially
restrictive Iran. It is also not surprising that all of the
comments from Iranian contacts, even those from think-tank
experts whose job is to advise Iranian policymakers, were
careful, measured, and nuanced. To most politically-savvy
Iranians, holding a black-and-white view about a topic as
important as US-Iran relations is virtually impossible.
Within the range of comments, however, one theme seems to
enjoy some consensus: that this election may offer the first
step in what could become a process of careful diplomatic
confidence-building on both sides, but that such a process
would likely be long and drawn-out, that many risks and
pitfalls (and opponents) would confront the process, and that
improved relations with the Iranian regime and with the
Iranian people are not necessarily the same thing. End
comment.
WIENER