Patience runs thin in Tehran as cabinet formation drags on

Since he won Iran’s presidential election earlier this month, Pezeshkian has been closely watched for hints of a potential ‘change’, domestically and toward the West. His latest words may have killed any such hope even before he names his cabinet.

“We do have the broad policies coming from His Greatness the Leader. I did say in our [presidential] debates that those policies are the guiding light of our path and define our goal,” Pezeshkian said in an exclusive interview with the website of the Supreme Leader’s office.

Despite widespread anticipation in Iran and abroad to see hints of any foreign policy changes, the new president did not touch the subject in the interview, which took place a few days before Pezeshkian’s inauguration, and was his first exposure to the media - if the website can be called a media outlet - since winning the vote.

Pezeshkian’s office canceled a customary press conference immediately after his victory, because he went to meet Khamenei. Amid a wave of speculations over his plans and appointments, he refrained from holding a press conference for three weeks.

Pezeshkian confirmed in his interview that he would name his cabinet only after consulting with Khamenei and obtaining his approval. Political and security profiles, including the intelligence and foreign ministers, are known to be picked by the Supreme Leader.

However, Pezeshkian seems to have taken it one step further, suggesting that he would take to Khamenei his long-list of “4-5 candidates for each post” and make the final decision accordingly.

Beyond the “broad policies” set by the Supreme Leader, Pezeshkian seems to have little to offer at this stage. Responding to a question about the economy, he said he had “no immediate solution” and had to consult the experts. “What is urgent right now is to get rid of the [political] disagreements.”

Pezehskian did hint at a gasoline price hike, a uniquely sensitive issue to millions of Iranians that caused widespread unrest in 2019, during which 1,500 citizens were killed, according to unofficial reports.

“We have an energy imbalance in the country. We’re spending $8 billion to buy gasoline [annually],” Pezeshkian said in his interview published on Khamenei’s website. “This means we are buying gasoline at around 30,000 or 40,000 tomans [50-70 US cents] per liter, and then selling it for 1,500 tomans [2 cents] per liter. How long can we continue doing this?”

Despite having one of the world’s biggest oil reserves, Iran has had to import gasoline to compensate for the soaring demand and stagnant production in the country’s aging refineries.

Any hike in gas price would be hugely unpopular and could lead to yet another round of protests in Iran, which leaves Pezeshkian in an unenviable position. The last hike also came under a ‘moderate’ administration – that of Hassan Rouhani.

Economic experts assert that the multi-rate currency system, with the government offering cheaper dollars to some importers, has primarily benefited a small group of merchants (rentiers) with political connections, fostering massive corruption.

Iran's currency that has steadily declined since the overthrow of monarchy in 1979, has experienced sharp falls since 2018 when the United States withdrew from the JCPOA nuclear deal and imposed oil export sanctions. The government, trying to prevent massive price hikes for imports, decided to offer cheap dollars to importers, indirectly subsidizing food, medicines and animal feed. However, influential insiders took advantage of the cheaper currency system to line their pockets with fake imports and still high prices for consumers.

These rates include the ‘preferential rate’ provided to importers by the government for food and medicine, cheaper than in the NIMA rate system whereby exporters must transfer their earned currency to importers. Then there is open market currency rate, which everyone can use to buy and sell foreign currencies at much higher rates. This is regulated by supply and demand, although the government tries to impact rates by periodically releasing dollars to banks and official exchanges.

Pezeshkian and his economic team led by Ali Tayyebnia, a prominent economist and former economy minister under President Hassan Rouhani, have vowed to eliminate the various rates to prevent corruption and stop the government’s extensive manipulation of the currency market.

Conservative politician and economist Ahmad Tavakkoli in an interview published Sunday, insisted that eliminating different currency rates is a “deadly advice” by the International Monetary Fund (IMF) that the governments of Hassan Rouhani and Ebrahim Raisi tried to implement. The outcome, he said, has only been further devaluation of the national currency and higher inflation.

“[Tayyebnia] must first explain who will determine the single rate, the government or the market? What rate will the government use to sell the currency [from oil exports)? The market rate?” he asked.

Already, some estimates say that one-third of the population has fallen below the 'poverty line' with annual inflation around 40% since 2019. If the government stops offering cheaper currency - or its indirect subsidies - food prices will soar, leading to dangerous instability.

Tavakkoli argued that allowing exchange rates to be decided by the market will not reduce demand for currency as personal investment or for exodus of capital. Open market rates will continue to grow and cause higher inflation and instability in the economy, and the government will eventually have to revert to two rates to avoid the ensuing destabilizing effect.

In a letter addressed to Pezeshkian, Farshad Momeni and Hossein Raghfar, two other prominent economists, similarly warned the new government about the consequences of plans that would “shock” the economy and put more pressure on the livelihood of the lower-income Iranians.

Momeni and Raghfar insisted that the new government must instead reduce its own unnecessary expenditures and avoid policies that could entail higher inflation, unemployment, and a higher income gap or encourage profiteering and corruption.

However, few experts or commentators dare to openly say that Iran's anti-West foreign policy, regional adventurism and nuclear program, resulting in sanctions, are key reasons why inflation is crippling the economy. A high degree of government ownership of businesses, top-down management of the economy that breed inefficiency and corruption, are also detrimental factors.

Pezeshkian has repeatedly vowed to end the government’s extensive intervention in the economy including strict price controls on various products that range from food and fuel to domestically produced cars and construction material, and to allow the “real private sector” and the government's ownership of most major companies.

He also insists that the eight percent economic growth prescribed by the country’s development plan is not achievable without foreign investment and has promised to try to solve the problem of paralyzing sanctions through engagement with the West and accession to the conventions of the Financial Action Task Force (FATF).

In a statement last week, Pezeshkian said the removal of sanctions would be a lengthy process and listed some of the most urgent economic tasks that need to be addressed in the first two years of his presidency.

Improvement of the economy and the lives of ordinary Iranians before sanctions are lifted is only feasible if the “wastage” of energy and foreign currency resources is reduced, the statement said.

The statement said the government’s direct and indirect ownership of big companies and lack of economic transparency and discipline were two areas that require urgent attention.

Thousands of protesters were rallying against Israeli Prime Minister Netanyahu’s speech before Congress on Wednesday when many protesters engaged in violent acts, burning the US flag and defacing monuments.

Netanyahu’s speech not only pinpointed Iran as the instigator of all the turmoil in the Middle East, but also made special note of the protesters. Referencing Iran’s role in promoting and funding protests in the US, he went further than Harris, calling the demonstrators “Iran’s useful idiots."

“That’s not a phrase we would use,” National Security Communications Adviser John Kirby told reports on Thursday, when asked to react to that characterization by Netanyahu. “We know that Iran certainly has tried to meddle here. They’ve tried to sow discord. They’ve obviously contributed to some funding of some protesters,” Kirby said.

Asked whether he would describe Wednesday’s protest near the Capitol as “pro-Palestinian, pro-Hamas or anti-Israel,” Kirby said it was “a little bit of all those things.”

Earlier this month, US Director of National Intelligence Avril Haines’s assessment said that Iran is attempting to covertly stoke protests in the United States related to the conflict in Gaza, posing as activists online and, in some cases, providing financial support to protesters.

Republican Senator Marco Rubio, meanwhile, took a tougher stance, urging other Senators to consider a resolution that would see visitors and foreign nationals on a visa who support Hamas in the US forced to leave the country.

“If you’re in the United States on a visa and vandalizing property with phrases like ‘Hamas is coming,’ it’s time for you to go,” Rubio said on X. At a critical moment in negotiations over a possible Gaza hostage and ceasefire deal, Vice President Harris had her meeting with Netanyahu – her first with a foreign leader since starting her presidential campaign.

Harris, who did not preside over Netanyahu’s speech, held a press conference after their meeting. While expressing support for Israel’s right to defend itself, she emphasized the importance of how Israel does so. Harris voiced her refusal to stay silent on the human suffering in Gaza, pointing to the tragic images of dead children and displaced, desperate civilians.

Reports suggest that the Israeli leader was upset by Harris’ statement, concerned it will harm negotiations over a Gaza hostage and ceasefire deal.

David Friedman, the US Ambassador to Israel during the Trump administration, also weighed in, taking to X to critique Harris' statement, accusing her of failing to condemn Hamas and instead offering generic statements about complexities, nuances, and peace.

Netanyahu, who met with President Joe Biden before his meeting with Harris, is also scheduled to meet with former President Donald Trump on Friday.

On Friday, French train operator SNCF announced that the high-speed network suffered "malicious acts," including arson attacks, causing significant disruption just hours before the Olympic opening ceremony. Up to 800,000 passengers will face travel disruptions this weekend due to the attack.

Shortly thereafter, Israel’s Katz, attributed the attack to Iran, noting that he had previously warned French authorities about potential threats from Tehran targeting Israeli athletes in France.

"The free world must stop Iran now - before it's too late," Katz wrote on X.

In a letter on Thursday, Katz had alerted his French counterpart, Stéphane Séjourné, to an Iranian-backed plot aimed at the Israeli delegation participating in the 2024 Games.

“There are those who seek to undermine the celebratory nature of this joyous event,” wrote Katz. “We currently have assessments regarding the potential threat posed by Iranian terrorist proxies and other terrorist organizations.”

Also on Thursday, Israeli media reported that a group of anti-Israeli hackers, identifying themselves as “Zeus,” claimed responsibility for publishing personal information about Israeli athletes, including supposed images from their military service.

The National Cyber Directorate of Israel attributed this social media campaign to Iran, asserting that its primary goal is to intimidate the Israeli delegation. According to the Directorate's investigation, hackers have created social media channels to disseminate personal data about delegation members and send them threatening messages.

The hackers reportedly established social media profiles under the guise of GUD, a French far-right student union, using the encrypted chat application Telegram to post sensitive information such as bank account details, home addresses, and ID numbers of Israeli athletes. They also circulated alleged photos of the athletes during their IDF service, accusing the army of sending undercover operatives to the Games.

Gabi Portnoy, head of Israel's National Cyber Directorate, remarked, “Iran is exploiting an apolitical international sporting competition to promote digital terrorism against Israel and its right to participate in these competitions.”

These reports emerged just a day after Israel’s National Security Council issued safety guidelines for Israelis traveling to the Olympics, highlighting the threat from Iran-backed terror organizations targeting Israeli and Jewish individuals. The NSC also referenced recent arrests of French teens linked to the Islamic State.

The Olympic Games will be held from July 26 to August 11, followed by the Paralympic Games from August 28 to September 8.

According to the exclusive report by Iran International, on the afternoon of July 15, Ahmadinejad and his entourage were headed to Zanjan to participate in a religious ceremony. Before departure, the head of the security team checked a recently repaired Land Cruiser intended for Ahmadinejad and, complaining that the air conditioner was not properly fixed, requested Ahmadinejad to ride in another Land Cruiser.

In Mehr-e-Farda's report, published on the media's X account, it was mentioned that despite the original plan for Ahmadinejad to travel in the recently repaired Land Cruiser, the head of security decided that the former president should ride in another vehicle, while some members of the security team took the targeted Land Cruiser.

According to the channel affiliated with Ahmadinejad’s office, the security team realized mid-journey that the steering and brakes of the Land Cruiser were malfunctioning. The vehicle collided with other cars and eventually stopped on the side of the highway.

Iran International's report also emphasized that the steering and brakes of the Land Cruiser carrying the security team failed suddenly on the Karaj-Qazvin highway in the Abyek region. The vehicle spun around three times, veered left and right multiple times, hit the concrete barrier in the middle of the highway, collided with another vehicle in Ahmadinejad's convoy, and finally stopped after hitting a passing Peugeot on the right side of the highway.

Mehr-e-Farda pointed out that the investigation into this incident is ongoing. In a post on the channel's Telegram account, it asked, "Who is responsible for this assassination attempt?" This post was deleted without explanation early Friday morning.

Sources previously told Iran International that Ahmadinejad's office informed "responsible officials" of the incident on July 21, five days after the failed assassination attempt, and complained about multiple previous attacks and attempts on Ahmadinejad's life.

Information received by Iran International indicated that the Land Cruiser, which was sabotaged, was under the custody of the Presidential Office for repairs. However, instead of being sent to an authorized repair shop, it was handed over to unidentified "special security agents" and taken to an unknown location.

Given their organizational positions, these special security agents could belong to the higher ranks of one of three IRGC subunits: the IRGC Intelligence Organization, the IRGC Counterintelligence Organization, or the IRGC's Vali-e-Amr unit. These units have the authority to retrieve Ahmadinejad's vehicle from the Presidential Office's repair unit without coordination with the Ansar Protection Corps and could potentially carry out the alleged sabotage.

Iran International's exclusive report on the assassination attempt received widespread coverage in multiple international and some Iranian media outlets.

Among domestic media, Khabar Online noted the assassination attempt report on Ahmadinejad and wrote that "one of the figures close to the former president neither confirmed nor denied this claim."

Saberin News channel, close to security forces, confirmed the issue with Ahmadinejad's escort vehicle but wrote, "All the aforementioned news is false, and nothing happened to Ahmadinejad's vehicle."

However, neither Iran International's exclusive report nor Mehr-e-Farda's later news claimed any problem occurred with Ahmadinejad's vehicle.

Journalist Fariborz Kalantari, a day before Mehr-e-Farda's official response, posted details about the assassination attempt on his social media accounts, stating that Ahmadinejad's office is following up on the issue.

Ahmadinejad has previously spoken about assassination attempts on his life.

On August 26, 2023, the Dolat-e-Bahar Telegram channel, associated with Ahmadinejad, reported that his office sent a letter to senior military and security officials, warning of "very concerning actions" against him and calling for necessary protective measures and action against those responsible.

The channel quoted Ahmadinejad's office stating: "The recent actions clearly indicate an organized effort to assassinate Dr. Ahmadinejad."

On August 29, 2023, Alireza Beigi, a parliament member and close associate of Ahmadinejad, confirmed the Dolat-e-Bahar Telegram channel's report, saying: "Efforts to assassinate Ahmadinejad have increased in the past couple of months, and documentation of these efforts has been submitted to security agencies."

Previously, on March 1, 2021, domestic media reported that Ahmadinejad had responded to a question by saying: "The discussion of my assassination is serious. They will kill me, hold mourning ceremonies, and then accuse others. I have recorded the information I know and placed it in several secure locations."