IRAN REGIONAL PRESENCE OFFICE - WINDOW ON IRAN - MARCH 17,

S E C R E T SECTION 01 OF 02 RPO DUBAI 000121

NOFORN
SIPDIS

E.O. 12958: DECL: 3/17/2019
TAGS: PGOV EAGR ECON KDEM IR
SUBJECT: IRAN REGIONAL PRESENCE OFFICE - WINDOW ON IRAN - MARCH 17,
2009

DUBAI 00000121 001.2 OF 002


CLASSIFIED BY: Ramin Asgard, Director, Iran Regional Presence
Office - Dubai, DOS.
REASON: 1.4 (b),(d)


1. [C/NF] Iranian Visa Applicants in Dubai Generally
Unenthusiastic About Mir Hossein Mousavi: IRPO Conoff queried
visa applicants regarding their views of former Iranian Prime
Minister and now presidential candidate Mir Hossein Mousavi.
None professed particular enthusiasm with his candidacy and
younger applicants, especially students, knew little about him.
Others were inclined to dismissively lump Mousavi with other
Iranian politicians. Of those offering distinct opinions, a
young, female Iranian doctor disapproved of his candidacy
because she believes the Supreme Leader supports it. A
middle-aged chemist conditioned his support for Mousavi on
Khatami's endorsement and, finally, a Tehrani gold jeweler
applauded Mousavi's management of the country during the
Iran-Iraq war, contrasting that era with the current reality.
Comment: Iranians visa applicants in Dubai are as a group
apolitical and their general lack of enthusiasm for a
presidential candidate is not surprising. That students and
Iran's youth know little about Mousavi is also unsurprising -
such demographic groups came of age after Mousavi's generally
well regarded stint as prime minister in the 1980s. Still, if
their views are representative of other young Iranians,
attracting their support will be a key challenge for Mousavi.
The notion that Khamenei supports Mousavi's bid is odd - the two
were rivals in the 1980s-and further suggests that Mousavi is
now relatively unknown.




2. [S/NF] Iranian Government and Tehran Municipality's Interest
in US Agricultural Trade: Based upon discussions with
Dubai-based Regional Ag Attache, IRPO has learned that Iran's
Government Trading Corporation (GTC) has been in touch with the
US Wheat Council regarding proposed travel by several senior
officials to visit US wheat producing areas and to explore
further bulk grain purchases from the US. [Note: According to
USDA, the GTC purchased $535 million of US wheat in 2008 and
continues to purchase US wheat. Iran's new fiscal year budget
allows for greater wheat imports this year. At present, trade
sources indicate Iran is purchasing $15-20 million of US wheat
per month]. IRPO Officer met with two UAE-based Iranian traders
who claimed to represent the Municipality of Tehran and its
interest in purchasing American agricultural products. The
UAE-based traders were unfamiliar with last year's trade or with
the licensing procedures and requirements for US trade with
Iran, but emphasized that their purchases are separate from
those of the GTC. The Tehran Municipality's shopping list of
American products includes wheat, corn, barley, rice, and citrus
fruits. Comment: Intermittent droughts in Iran, such as in
2008, have historically raised demand for agricultural imports,
but the choice of US origin agricultural goods may indicate an
Iranian (GTC and the Tehran Municipality) decision to explore
expanded trade opportunities with the US. Future discussions in
the US with USDA and/or private agricultural firms may clarify
their motivation for selecting US agricultural commodities.


3. [S/NF] Roxana Saberi's Arrest Likely Organized by Spoilers to
Prevent U.S.-Iran Rapprochement. In separate conservations, two
highly regarded Iranian-American political analysts who both
know Saberi personally, described her as "completely benign" and
were highly skeptical that anything about her life or work in
Iran had led to her arrest. Both men cautioned against allowing
spoilers to derail plans for engagement, recalling how the
January 2002 seizure of the Palestinian freighter Karine A
loaded with presumably Iranian-made weapons was likely the point
at which the confidence built between the U.S. and Iran during
the 2001 Bonn Conference began to disintegrate. One of the
contacts described Saberi, because of her dual nationality as
well as the fact that she was not working directly for a
prominent international news outlet, as ideal "low-hanging
fruit" for security officials trying to thwart the possibility
of dialogue between Washington and Tehran.




4. [S/NF] The Lion Rising?: Iranian Identity and Hubris in the
Northern Emirates: A well-established IRPO business contact
recounted the following anecdote to IRPO Officer from a banking
leadership meeting he attended in Ajman emirate last week.
During the Q&A session, an Egyptian attendee rose and requested
to ask his question in Arabic as his English was weak and
suggested a colleague could translate. A Bank Melli - Iran
official immediately rose and declared that "if he is allowed to
ask his question in Arabic, I should be allowed to ask mine in
Farsi, and he (pointing to an Ajman government official
attending the meeting) can translate for me." The government
official was reportedly taken aback, but the meeting eventually
wrapped up without major incident. Comment: The presence of
Emirati-Iranian officials throughout the UAEG and all levels of
business, particularly in the Northern Emirates, is a deeply
sensitive matter rarely discussed openly in the UAE. Within the
context of potential UAE-Iran bilateral tension, questions of
cultural identity may sharpen. The Bank Melli official's claim
that Farsi be treated equally to Arabic in an official meeting,
and his use of a Farsi-speaking government official to bolster
his position, is a thought-provoking example of the very real
battle for influence and identity in the Gulf.


5. [S/NF ] Test Case for Subsidy Reform Not a Hit: IRPO Officer
met with Hassan Kabiri, a scion of a prominent bazaari family
and managing director/owner of Paknam, one of Iran's largest
producers of detergent powder. Kabiri discussed Iran's
reduction of price subsidies for detergent powder in 2008,
claiming that detergent had subsequently tripled in price but
that President Ahmadinejad had simultaneously reduced tariffs on
imported detergent from 35 to 20%. The tariff reduction was the
President's attempt to fight the inflationary impact of the
price increase, but in Kabiri's estimation this effort had been
a failure. Kabiri's factory was adjusting to the new economic
reality by trying to lower its fixed costs, primarily by
reducing the labor force. Paknam had laid off about half of its
approximately 1,000 workers since the subsidy reduction, but
Iran's legal code made this process extremely difficult--one
laid off employee had even appealed his case to Iran's Supreme
Court. Kabiri found it easier to lay off workers if he first
made provisions for their post-employment welfare. Looking
forward to Iran's new fiscal year that starts later this month,
Kabiri predicted that the government will have to reverse course
and raise tariffs on non-food items, including detergent, so
that it can continue to pay for food imports as oil revenues
decline. Comment: The removal of price subsidies and a reduced
tariff for imports highlight some of the dangers that AN's
economic transformation plan poses to Iran's domestic producers
and their employees. The recent defeat of AN's subsidy reforms
during the debate over next year's budget in the Majles will
delay significant changes, but Iran's massive subsidies remain a
key burden on government finances and a distortion in Iran's
economy.


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