TEHRAN: OPEN FOR BUSINESS; POLICE ON CHARM

C O N F I D E N T I A L SECTION 01 OF 02 BERLIN 000175 SIPDIS E.O. 12958: DECL: 02/11/2020 TAGS: PGOV PREL IR GM SUBJECT: TEHRAN: OPEN FOR BUSINESS; POLICE ON CHARM OFFENSIVE Classified By: Political M/C George Glass for reasons 1.4 b/d. ¶1. (C) Summary: A European Iran analyst, who travels frequently to Iran, recently returned to Germany from a three-week trip to Tehran during which he met with contacts and attended an Institute for Politics and International Studies (IPIS) sponsored conference in mid January. He noted that the Iranian government seemed to be trying to defuse the tense situation, that police were friendlier than usual, and that the "morality police" were not visible. Though the regime still has supporters, he noted that their strength had been fading since the June 2009 elections and he said he thought the opposition, heterogeneous as it may be, now has the support of the majority. He said the IPIS conference focused on sending a strong domestic message regarding the government's plan to increase Iran's role as a regional hub for trade. He noted that Commercial Attaches in Western Embassies were still able to meet with Iranian contacts, but that most other sections weren't. Interestingly he mentioned that former Austrian Defense Minister Fasselabend still travels frequently to Iran and maintains contacts close to Ahmadinejad and other regime insiders. On the topic of sanctions he noted that French, Chinese and Indian business delegations were highly visible in Tehran and that German business needs reassurance, especially from their European competitors, that the playing field will be level. End Summary. -------------- Tehran Police on a Charm Offensive? -------------- ¶2. (C) On a positive note poloff's contact said he experienced the regular police in Tehran as "much friendlier" than usual. He said the police were probably given orders not to provoke unnecessary conflict, and added that the "morality police" didn't appear visible - another sign that the regime doesn't want to "stoke the fires" at the moment. He interpreted the "debates" shown in early January on Iranian State television as another effort in this direction towards defusing tension. The analyst said the only sections within the Western Embassies which seem to be able to get out and meet contacts on a regular basis are the commercial attaches. Businessmen aren't afraid of having contact with Western Embassies. He said former Austrian Defense Minister Fasselabend was one exception, who still traveled to Iran and 
maintained contacts very close to Ahmadinejad and the Supreme Leader. Within the MFA he said he had a few meetings at the "working levels." He found MFA officials thoroughly unimpressive, but noted that they no longer seemed "enamored" by the regime. -------------- Regime Support Fading -------------- ¶3. (C) On the question of support for the opposition movement, the analyst said that while the size of the opposition was unclear at the time of the election in June 2009, subsequent events had caused the opposition to gain popularity and that they represent a majority of the population these days. What remained unclear is how homogenous the opposition really is. He said the opposition was united in its general desire to remove Ahmadinejad and in its pursuit of some basic civil rights (freedom of expression and assembly in particular). He noted that the opposition contained groups which were generally dissatisfied with the Islamic republic including those who seek a secularization of the regime. On the other hand, the opposition also included many regime supporters who happen not to support the current government's leadership. Former President Khatami is one of the centers of this second group, which is itself a loose network of former regime insiders, whose single common goal is some form of "democratization" of the Islamic Republic, without calling into question the "Islamic" nature of the republic. On the question of the lower and middle classes he noted that while they had been predominantly Ahmadinejad supporters, they had started to become disillusioned with the failures of his populist rhetoric and empty promises and that some are starting to join the ranks of the opposition movement. -------------- -------------- Regime Supporters: Splits visible, but Still Recruiting -------------- -------------- ¶4. (C) The analyst added that the regime does still have a large group of supporters, especially from the conservative religious side which appreciated the "values and morals" which the current regime claimed to stand for. Within this BERLIN 00000175 002 OF 002 group, however, he commented on the growing divide between those scholars associated with Qom based Mofid University and those associated with Mesba Yasdi and Jannati. He also remarked on a new "crop" of younger, well educated, radically conservative, English speaking regime supporters who he compared to European neo-Nazis and who he said were being groomed (with not much success so far) to be the new "elite." -------------- IPIS Conference Uneventful -------------- ¶5. (C) The analyst mentioned Russian, Chinese, Indian, Japanese, Turkish and Lebanese participation at the conference at which both FM Mottaki and Defense Minister Vahidi spoke. He said neither Mottaki nor Vahidi's interventions were noteworthy; both seemed to focus their remarks for domestic consumption, mixing standard anti-Israel rhetoric with a heavy focus on Iran's goals to expand its economy and role as a regional trade hub through building railroad links from India across the country and constructing new pipelines. He noted that many delegates seemed to want to hide their nationality during the parts of the conference that were filmed and that placards only identified speakers as "Embassy" officials with no reference to their country of origin. (Note. IPIS also hosted the 2006 Holocaust denial conference "International Conference on Review of the Holocaust Global Visision." Contact never mentioned the name of the January 2010 conference, but upon examination of the IPIS website it was probably the January 18 Conference on Persian Gulf Challenges/Regional Mechanisms. End Note.) -------------- -------------- China and India Gearing up for U.S. Competition in Iran -------------- -------------- ¶6. (C) The Iran expert said he had had interesting conversations on the margins of the conference with some of the other delegations. He said both the Chinese and the Indian delegations explained to him why their business sectors were pouring investments into Iran these days. They argued that whatever happens, it is in their interest to cement their network of relationships now so that they are in a better position to compete against the American business sector when they reenter the game - either after a military action or as a result of a negotiated solution. -------------- What's Irking German Business -------------- ¶7. (C) On the subject of the German business community's appetite for more Iran sanctions, the analyst echoed comments the Embassy has heard from MFA officials saying that German business is concerned about having a "level playing field." In particular he said the business community is irked that Sarkozy manages to carve out an exclusion for Peugeot from any possible sanctions packet and that German business men are talking about how UK trade with Iran may be down by 50 percent but it's up by 50 percent with Dubai during the same period. (Note: According to EU statistical data, from 2004-2008, UK exports to Iran declined 22 percent; UK exports to UAE increased only 16 percent. However, during the same period, German exports to the UAE increased a whopping 126 percent. End Note.) On an anecdotal level, he noted that his hotel was crawling with French and Chinese business delegations. Murphy