IRAN REGIONAL PRESENCE OFFICE DUBAI: WINDOW ON IRAN - APRIL

S E C R E T SECTION 01 OF 03 RPO DUBAI 000171

NOFORN
SIPDIS

E.O. 12958: DECL: 4/15/2019
TAGS: PREL PGOV PHUM PREF ECON EAGR IR
SUBJECT: IRAN REGIONAL PRESENCE OFFICE DUBAI: WINDOW ON IRAN - APRIL
15, 2009

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

1. [S/NF] Iranian UN OCHA head seen as invaluable link to IRIG:
According to an Iranian employee of the UN Office of the
Coordinator for Humanitarian Affairs (please protect),the
current OCHA director in Tehran, Ali Ashraf Mojtahed Shabestari,
is so well-respected by IRIG officials that their relatively
small office is often called upon by other larger UN agencies to
help pave the way for agreements with the Iranian government.
Shabestari, a former diplomat who served as Iran's ambassador to
the UN headquarters in Geneva in the 1980s, is particularly
close to Foreign Minister Mottaki and several "senior people" in
the Ministry of Interior, she noted. Because of his access and
stature within the ruling elite in Tehran, expatriate colleagues
within the broader UN mission sometimes seek Dr. Shabesteri's
assistance when requesting permission or collaboration for
sensitive activities from the IRIG. For example, she said that
Dr. Shabestari recently provided "cover" via UN OCHA for a
training workshop on gender empowerment organized by the UN
Population Fund that had been twice cancelled by the government.
By changing the title to "Gender Empowerment in Emergencies"
and issuing the invitations to government officials personally,
Shabestari was able to overcome IRIG reluctance. Comment: In a
late January article published by the state-run IRNA, Shabestari
reacted positively to President Obama's stated willingness to
engage Iran and argued that Iran's "diplomatic apparatus" should
remain vigilant "since an opportunity to secure the country's
grave national interests might occur merely one fleeting time."




2. [S/NF] A Good Week for Individual Exchanges: IRPO spoke to
three exchange participants in separate programs this week, and
none reported any trouble from the IRIG related to their travel
to the US. An economics professor from Yazd University spending
a semester at the University of Virginia, a medical researcher
working with NIH, and a theater director traveling for a
Department-funded workshop this summer at the Kennedy Center
told us that they had no knowledge of the MFA commission that
supposedly is overseeing exchanges with the US and had not asked
its permission to travel. The medical researcher showed us a
copy of the research agreement that had been signed between NIH
and the Mashad University of Medical Sciences as evidence that
Iranian authorities were aware and supportive of his trip.
Similarly, the economics professor, who has been a useful source
in our recent economic reporting, told us that universities and
individual professors across Iran were eager to establish
partnerships with American institutions. These partnerships
should be a first step in restoring normal relations, he added.
Comment: We are hopeful that the experience of these three
Iranians indicates a softening attitude among Iranian
authorities. We should point out, however, that individuals have
seldom had trouble. We'll know better if the IRIG is again open
to IVLP exchanges in May, when the first of several IVLP groups
this summer is due to travel.




3. [S/NF] Budgetary Planning Employee Addresses Dissolution of
the Management and Planning Organization and the Iranian Budget:
Monir Vazirnia, a civil engineer with what was the Management
and Planning Organization (MPO) in Khorasan-e Razavi province,
spoke with IRPO conoff in early April about the changes to the
MPO since President Ahmadinejad reorganized the budget-planning
body in 2006. Now known as the Vice-Presidential Department for
Strategic Planning and Control, she said Ahmadinejad had
initiated the reorganization in order gain more control over the
budget process and toward that end removed a number of senior
"experts" from the organization. However, most of the changes
have taken place in the upper echelons of the organization and
her work has remained the same. Her role is to formulate the
province's budget request for new university and hospital
construction, which is fed into the province's broader request
and then evaluated in Tehran. Vazirnia also dismissed the
Majles' effort to resuscitate the MPO; the MPO falls under the
president's authority and its status will depend on the outcome
of the presidential election. She made the following points:



- Budgets have become less detailed - fewer line items -
because Ahmadinejad wants the flexibility to independently
determine provincial spending.

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- Ahmadinejad's subsidy reforms were a positive step, but the
plans need to be implemented gradually - the Iranian people are
not prepared for dramatic change. She attributed the rejection
of Ahmadinejad's subsidy reform plan to the Majles' legitimate
concerns that it would increase inflation.



- Last year's aborted plan to implement a value-added tax is
not likely to be repeated this year. At the time, Ahmadinejad
said the plan's implementation was to be delayed until after the
presidential election. However, according to Vazirnia, the new
budget does not include any revenue from the tax.



- Khorasan-e Razavi had a 20 percent budget deficit last year.
She was unable to forecast the province's deficit for the
current year (starting March 21) because she said it would
depend on the price of oil. She said the government responds to
deficits by shuttering projects or slowing their pace.

Comment: Although Vazirnia lives in Mashad and is not privy to
the budgetary wrangling in Tehran, her insight into working
levels of the MPO is useful. Her comments indicate the MPO's
overhaul had little effect on the bureaucracy outside of Tehran.
As such, reviving the MPO, if pursued by a different president,
would be a more straightforward matter.




4. [S/NF] Faculty Changes at Influential University: Some
economics professors at Shahid Beheshti University have recently
been forced into early retirement, according to an IRPO contact
who is a professor of economics at Yazd University. Shahid
Beheshti is one of three influential centers of economic
studies, a group that includes Tehran University and Allameh
Tabatabai University, the latter of which has a strong rivalry
with Shahid Beheshti. Many of the sixty economists who have
written a series of open letters critical of AN's economic
policies come from Allameh Tabatabai University, and they
generally favor strict adherence to Iran's five-and twenty-year
development plans and a restoration of the Management and
Planning Organization (MPO) that AN partially dismantled in
2006, according to the Yazd academic and a separate contact who
is an Iranian professor of economics at the American University
of Sharjah (please protect). First Vice President Parviz
Davoudi, a graduate of Shahid Beheshti and a key economic
adviser to AN, was recently confronted at a gathering in Tehran
where he was asked why Iran's gini coefficient - a common
measure of inequality of income distribution - has increased in
recent years, a question designed to embarrass an administration
that has claimed social justice as one of its guiding
principles, according to the Yazd academic. Comment: Major
faculty changes at a key university associated with AN's
economic policies could be a sign that their failures are being
recognized, or that the faculty is being purged of all but the
true believers. At Yazd University, only one of twelve
professors of economics support AN, according to the IRPO
contact.




5. [S/NF] Economic Idol: To encourage non-oil exports and
increased productivity the IRIG continues to award prizes to its
best performing firms, according to an IRPO contact who is a
professor of economics at Yazd University. Cash and special
export licenses are awarded to the top 25 Iranian exporters,
based on sales volume - in a televised ceremony - and a tractor
manufacturer in Tabriz is one firm that hopes to win this year,
according to an Iranian press article. The National
Productivity Prize is awarded to a leading industrial company,
based on guidelines established by the European Foundation for
Quality Management (EFQM),although the last winner mentioned in
Iranian press was an automobile parts manufacturer that won the
award in 2006. Comment: Both of these prizes were initiated by
former President Khatami's government, and the continued
existence of the productivity award, which receives little

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attention from the Iranian media, signals that some Iranian
business leaders and academics continue to aspire to Western
business values like EFQM, despite AN's rhetoric about the
collapse of capitalism.
ASGARD