IRANIAN MERCHANT CLASS PREFERS POLITICAL STATUS QUO

S E C R E T SECTION 01 OF 02 RPO DUBAI 000047

SIPDIS

E.O. 12958: DECL: 8/18/2018
TAGS: ECON PGOV PREL IR
SUBJECT: IRANIAN MERCHANT CLASS PREFERS POLITICAL STATUS QUO

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CLASSIFIED BY: Amy Madsen, Acting Director, Iran Regional
Presence Office, Department of State.
REASON: 1.4 (b),(d)



1.(S) Summary: The influence of the traditional Iranian
merchant class, the bazaaris, remains unchanged in Iran, said
one third-generation bazaari steel broker. (Note: Throughout
much of Iranian history, the bazaaris and the clergy have been
mutually-reinforcing centers of economic and political
influence. End note) The only difference, claimed the steel
broker, is that the bazaaris have become disillusioned with the
"mullahs" because they feel that the majority of the clerics are
more interested in lining their own pockets than upholding
ideological ideals. Despite their collective disillusionment,
the bazaaris are not at present interested in effecting change
in the government, the steel broker alleged. The last time the
bazaaris helped to finance a revolution the outcome was not what
they had hoped, he said, adding that while "every" bazaari knows
the current system is "sick," no one wants to risk investing in
a new system which could turn out to be worse for their
interests. Separately, the steel broker claimed the real estate
market in Tehran has taken a down turn the last two months; this
claim has not been substantiated by other sources. End Summary.

Financial backers of the revolution

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2.(S) IRPoff met with a third-generation bazaari steel broker
and seyyed August 13. (Note: The term "seyyed" refers to a
descendant of the Prophet Mohammad. End note) According to this
source, bazaari influence and relations with the clergy in Iran
has not changed since the start of the revolution. (Note:
Throughout much of Iranian history, the bazaaris and the clergy
have been mutually-reinforcing centers of economic and political
influence. Both groups played important roles in the Iranian
constitutional revolution of 1905-1906, and bazaaris funded much
of the activities of the clergy in support of the 1979
revolution. End note) The steel broker alleged that that the
bazaaris were the money behind the "mullahs who instigated the
revolution." (Note: The steel broker repeatedly referred to
members of the ruling clerical class using the somewhat
pejorative term "mullahs." End note) He said that his
grandfather was instrumental to the revolution, providing money
to the cause and publishing pamphlets about the goals of the
revolution that were widely distributed in the bazaar. The
broker said that the bazaaris did not support the revolution for
financial benefit. He claimed that though the bazaaris enjoyed
international access and prestige under the Shah's regime, they
supported the revolution for ideological reasons.

3.(S) The steel broker claimed that since the revolution, the
bazaaris have become disillusioned with the clergy and feel that
the clerics place greater importance on lining their own pockets
than governing according to religious ideology. Describing the
business relationship between the clerics and the bazaaris, he
said that the clerics hold the import and export licenses, but
that they need the bazaaris to move the money and the goods;
this relationship has not changed over the past 30 years,
claimed the broker.

No interest in changing the system

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4.(S) The bazaaris have no plans to try to effect change in the
Iranian government or amongst the clerics, alleged the steel
broker. Despite widespread bazaari dissatisfaction with the
Islamic Republic, which in the opinion of this particular trader
is "sick," the bazaari class is afraid that any attempts to
change the current system could make the situation worse. The
last time traders put their money behind a revolution, this was
the case, he said. The steel broker said that at least bazaaris
know how to operate in the current system, it is one they
understand and are invested in, he said. However, echoing
anecdotal comments of Iranian businesses writ-large, the steel
trader complained of an increasingly difficult economic
environment for Iran-based businesses; describing difficulties
in financing imports and finding suitable trade partners.

Real Estate

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5.(C) Separately, the steel broker claimed that real estate
prices in Tehran have taken a down turn in the last two months.

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He alleged that investors are choosing to leave their money in
the bank and live off the interest, as opposed to investing in
Tehran's real estate market. Additionally, the single source
claimed that Iranian investments abroad, such as in Dubai, are
on the rise.

6.(C)Comment: IRPO does not have any information to
substantiate the claim that real estate in Tehran is on the
decline or that investments by Iranians in Dubai are on the
rise. This is the first source that has claimed a decline in
the Tehran real estate market and this seems contrary to
economic realities given that inflation is higher than interest
rates. Any would-be bank account holder should be facing a loss
by keeping their money in the bank.

7.(S) Comment continued: While this cable is based on a single
source, IRPOffs have heard from a variety of Iranians the
sentiment that it is preferable to live under the current system
than to try to implement political change that could result in a
much worse situation.
MADSEN