S E C R E T SECTION 01 OF 03 RPO DUBAI 000200

NOFORN
SIPDIS

E.O. 12958: DECL: 5/13/2019
TAGS: PGOV PINR CASC ECON
SUBJECT: IRAN REGIONAL PRESENCE OFFICE - WINDOW ON IRAN - MAY 13,
2009

REF: STATE 47326

DUBAI 00000200 001.2 OF 003


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

1. [S/NF] Iranian Media Largely Ignore Saberi's Release:
Iranian official and semi-official media provided minimal
reporting on the court decision to free Roxanna Saberi. IRNA,
for example, limited its coverage to a short, factual story
quoting from foreign press sources. Judiciary spokesman Alireza
Jamshidi was shown on one state-run network announcing the
decision and citing Saberi's cooperation, her expression of
regret, and the Islamic principle of compassion as factors in
the judges' decision to reduce her sentence. Tabnak, the
newspaper of former IRGC commander and presidential candidate
Mohsen Rezai, ran a short article that raised the question of
whether the Ahmadinejad government would now press for the
release of Iranians in US custody in Iraq. Comment: The dearth
of official press on this story, like the President's Nowruz
address, suggests strongly that the IRIG is nervous about public
reaction to any story that might suggest a rush toward
engagement with the US.




2. [S/NF] VOA Panelists Said to Advocate Election Boycott: A
reform-minded IRPO contact complained to us that VOA recently
aired a program in which panelists were calling for Iranians to
boycott the presidential election. She suggested other VOA
programming had also featured speakers advocating that Iranians
stay home from the polls. Whether it was USG policy or not, she
said, many Iranians would believe it was because it was being
carried on VOA. She also said that such appeals undermined
VOA's credibility among its Iranian audience. Comment: This is
one of several complaints we've heard recently about VOA, as
Iranians tell us that while still popular, VOA is seen as less
objective and more removed from Iran than the BBC Persian
Service. IRPO highlights this complaint particularly as it runs
contrary to our stated policy of non-interference in the Iranian
elections. Furthermore and perhaps more important, low

voter
turnout may cast doubt on regime legitimacy, but will almost
certainly ensure AN - who enjoys both a solid core constituency
and incumbency advantages - will win.




3. [S/NF] MFA Spokesman Does Little to Clarify Existence of MFA
Exchanges Commission: During his weekly press conference, MFA
spokesman Hassan Qashqavi was asked whether Iranian soccer team
Persepolis would be allowed to tour the U.S. According to the
translation being given during Press TV's live coverage,
Qashqavi said that such travel is governed by "the committee"
and it scrutinizes requested travel closely. Clearly caught off
guard by the question, Qashqavi stumbled in answering further,
contradicting himself as to whether the committee was part of
the MFA or a separate entity to which MFA provided input.
Comment: A clear answer from Qashqavi would have officially
confirmed the existence of the purported MFA Exchanges
Committee. His fumbling answer, and translation that was not
perfect, leaves us with no better information on what role MFA
may play in overseeing exchanges with the US.




4. [S/NF] Mousavi's Attempt to Woo Academics Described as
Uninspiring: Two partners in a private equity fund based in
Tehran described presidential candidate Mir Hossein Mousavi's
performance at a meeting with academics and intellectuals at the
University of Tehran earlier this week as "uninspiring" and
noted that any of the four professors who spoke before Mousavi
would have made a more exciting candidate. According to the
contacts, Mousavi pointed to his ability to get funding for the
Iranian Academy of Arts as one of his most significant recent
managerial accomplishments, an example that left the audience
less than dazzled. They also mentioned that though Mousavi's
wife, Zahra Rahnavard, did not address the audience, she sat at
a table near the podium taking notes, several of which she
passed to her husband during the Q&A session. The senior fund
manager observed that while he found Mousavi to be intelligent
and straightforward, he attributed much of the support his
campaign has earned so far directly to Khatami's endorsement and
activity on behalf of Mousavi's candidacy. He also said that
former President Khatami's brother, Ali Khatami, requested a
meeting with him in late April on behalf of his older brother to
solicit the fund manager's support for Mousavi. According to
the contact, Mousavi made a conscious decision several weeks ago
to fully engage Khatami's "star power" and fundraising

DUBAI 00000200 002.2 OF 003


potential, and in addition to now publicly campaigning with him,
is asking Khatami to personally solicit financial support on
behalf of the campaign. Comment: While their comments about
Mousavi's demeanor at the University of Tehran meeting tracks
with the conventional wisdom that he is not a charismatic
candidate, other IRPO contacts have observed that during large
rallies he is able to generate enthusiasm, although not on the
level of Khatami. The campaign for the support of academics and
intellectual elites likely results from the numerous recent
endorsements of Mehdi Karroubi by high-profile reformist
thinkers such as Abbas Abdi, Ali Abtahi, and most recently,
Abdolkarim Soroush.




5. [SBU] IMF Predicts Solid Iran GDP Growth 2009-2010: On May
10, the IMF published its Regional Economic Outlook for the
Middle East, which projects 3.2 percent GDP growth for Iran in
2009 and 3.0 percent in 2010. Growth in non-oil GDP is
forecast at 4.0 percent in 2009 and 3.5 percent in 2010, with
oil GDP contracting by -4.0 (2009) and -2.0 (2010). The IMF's
growth projections for Iran are higher than the forecasted
regional average for oil exporters of 2.3 percent growth. At a
presentation of the report hosted by the Dubai International
Financial Centre, IMF Director of the Middle East and South Asia
Dr. Masood Ahmed noted that while the financial crisis has had a
negative impact, the Middle East has been less impacted than
most developing countries. The IMF highlighted that inflation
is trending downward worldwide due to falling demand and falling
commodity prices. In April, Iran's Central Bank reported that
inflation had dropped to 19 percent and would continue to
decline. Comment: Global deflationary tendencies, rather than
Central Bank inflation targeting, are likely responsible for
this decrease in inflation.




6. [C] Factory Owners Report Challenges, but No Crisis:
Iranian factory owners applying for visas in Dubai have taken
moderate steps to respond to the weakening Iranian economy.
Specifically, a packaging materials factory has reduced wages
for some employees; a paper manufacturing company has reduced
their work day from three shifts to two shifts; and, a ladies
underwear manufacturing company has cut back its workload by
roughly 20 percent. A plastics manufacturer reported that due
to liquidity problems in Iran, he faces a two to three month
delay in getting payments. An iron importing company said
demand from the factory they sell to has decreased the price
they pay approximately 50 percent. Still, the reports are not
entirely negative. A shampoo and soap manufacturing company
said business is good and the company is hiring.




7. [C] Iranian Businessman Offers Countervailing View of Public
Sentiment toward the US: An Iranian businessman in Dubai to
pick up his visa estimated that 50-60 percent of Iranians oppose
the resumption of official ties with the US. He explained that
many Iranians are "illiterate" or "uneducated" and take to heart
the IRIG's demonization of the USG. Continuing, he considers
their opposition to the resumption of ties significant, forcing
the IRIG to take gradual steps toward reconciliation. The
businessman also dismissed the potential, if reconciliation
fails, for an anti-regime protest from those that want better
ties with the US - he said such people, like himself, have no
power at all in Iran. Comment: IRPO conoff has met with the
Iranian businessman before; he is involved in the construction
industry and owns a fast food restaurant. His view of Iran's
"illiterates" should not be considered an authoritative
assessment - he has not recently been to South Tehran, and
similarly, probably has not ventured into Iran's rural areas to
discuss these matters. But his views still raise a few points.
First, his comments suggest the IRIG is not and will not be
responsive to domestic pressure to improve ties with the US.
Second, Tehran may feel more pressure from the anti-US cohort,
perhaps explaining Iran's own pre-conditions and the Iranian
rhetoric surrounding engagement. And finally, his views
illustrate the disdain many elite Iranians have for their rural
countrymen.




8. [S/NF] Facade of American Embassy in Tehran Unchanged

DUBAI 00000200 003.2 OF 003


(reftel): A Tehran-based investment fund manager, in response
to a query about reports of anti-American propaganda being taken
down in Tehran, reported that he saw the embassy compound on May
6 when he attended a meeting in a nearby office building. He
said the murals on the compound have not been painted over or
covered in any way.




9. [U] Window on Iran is a classified, weekly product providing
Washington policy community and Iran watcher highlights of key
developments on Iran. It is produced by the Iran Regional
Presence Office - Dubai. Please direct any questions/comments
to: Kay McGowan (mcgowanka2@state.sgov.gov
) or Charlie Pennypacker
(pennypacker@state.sgov.gov
).
ASGARD