The year 2012, which the Supreme Leader of the Republic of Iran, Ali Khamenei, described as the year “of national production, supporting Iranian labor and investment,” was not kind to the country. For it was indeed an economic year par excellence, not through any advancements made in that sector, but by the collapse of the rial and the effects of the West’s sanctions imposed on the Iranian Central Bank, which constituted a dangerous and important blow to Tehran’s dealings with foreign financial markets.
No tangible progress was made toward resolving any of the contentious issues facing Iran. Talks are stalled over its nuclear program pending the formation of President Barack Obama’s new administration.
Meantime, Iran readied itself for the presidential elections scheduled to take place in June 2013, when President Mahmoud Ahmadinejad’s second and final four-year term will draw to a close. The end of four years of economic hardship that no one would envy him for, as if Mir Hossein Mousavi, the candidate who lost the 2009 elections, had put a curse on the man and his presidency.
The year 2012 had great effect on Iranian citizens, as a result of the decline in the exchange rate of the rial to the U.S. dollar. Iranians lost a third of their savings. The greenback, which in late 2011 was worth 14,000 rials, jumped to 30,000 rials by the end of this year.
The rial fell victim to an executive order signed by Obama last January which barred any dealing with the Central Bank of Iran. The implementation of the European Union’s embargo on the importation of Iranian oil last July came to exacerbate the Iranian people’s difficult living conditions.
This, in turn, drove the [Iranian] government to disburse financial assistance to its citizens, in order for them to keep up with the rise in prices, including those of public utilities such as gas, electricity and water.
Despite the government’s efforts to absorb the effects of Western sanctions, apprehension remains king. This unease has been brought about by the ambiguity of the economic situation and the instability of the markets. These will respond to the talks underway with the six countries involved in the Iranian nuclear issue, and will remain reactive to the measures taken by the government to face up to the compounded economic pressure it faces.
For the first time in the Islamic Republic’s history, Khamenei praised Obama’s speech in front of the American Israel Public Affairs Committee (AIPAC), the most powerful lobbying group in the United States, in which Obama stated that the United States was not considering waging an attack on Iran, a statement that the Supreme Leader characterized as talk that “is good, and an exit from illusion.” But he nonetheless criticized the U.S. president for maintaining the sanctions against his country.
Prior to the American presidential elections, information surfaced about a meeting that took place between representatives of Khamenei and Obama, to discuss the possibility of talks getting under way if the American president won a second term in office, which he did. Despite both parties denying such events ever occurring, it is certain that any such talks would have to wait until after Obama forms his cabinet, and maybe even after the Iranian presidential elections.
It was noteworthy that President Ahmadinejad did not congratulate his U.S. counterpart on his election victory, as was the case in 2008. At the time, Obama did not acknowledge the Iranian president’s congratulatory message.
No progress was made on the Iranian nuclear dossier, despite the fact that three rounds of talks were held with the six nations (the five permanent Security Council members plus Germany), in Istanbul, Baghdad and Moscow, aimed at persuading Tehran to suspend Uranium enrichment, as a prerequisite to withdrawing the nuclear issue from the Security Council and returning it to the International Atomic Energy Agency (IAEA).
Iran held six additional meetings with the agency in order to iron out contentious issues. The most important out of these are Tehran’s response to allegations concerning possible military applications for its nuclear program. The Agency also asked that its inspectors be permitted to visit the Parchin military complex near Tehran, which it suspects was used by Iran to conduct secret experiments aimed at building nuclear weapons. But Tehran viewed such information as baseless, and all six meetings failed to settle the problems. It is also widely believed that talks with the IAEA are closely related to the ones that Iran is conducting with the six nations.
In parallel, Iran continued to test its new missile systems, which are designed to protect it from Israeli strikes against its nuclear facilities. It also succeeded in sending two of its warships to Syrian ports through the Suez canal, following the toppling of [former] President Hosni Mubarak’s regime.
Furthermore, Iran ended 2011 by announcing that it had downed an American RQ-170 Sentinel reconnaissance aircraft that had encroached on its airspace. In late 2012 it also announced “hunting” an American Scan Eagle unmanned aerial vehicle that it said violated its airspace.
Iran also reiterated its commitment to the “axis of resistance,” by publicizing its military support to Hezbollah in Lebanon and the resistance movements in Palestine, while boasting of the aid in missile building technology that it gave to Hamas and the Islamic Jihad, which both employed during the eight day war with the Jewish state.
Iran has repeatedly announced its readiness to close the Strait of Hormuz if it were to be attacked or prevented from exporting its oil. It has also threatened to strike at the areas from which any aggression against it were launched, affirming that it would target Israel if the U.S. attacked it.
On the political front, Iran succeeded in hosting the Non-Aligned Movement’s conference, attended by the leaders of 120 countries in its capital which still extolls revolutionary slogans, Imam Khomeini’s values, anti-Americanism, and the virtues of a world without Israel. The conference was akin to a silver plate which Tehran used to settle any prickly issues it has with the international community, especially the West, which has been wagering on isolating it politically and economically.
Internally, the opposition, led by the two losing presidential candidates Mir Hossein Musavi and Mehdi Karroubi, subsided, maybe because it had grown irrelevant as Ahmadinejad’s second term drew closer to ending. But the Iranian electoral scene witnessed an unprecedented early start of activity in preparation for the presidential elections, brought about by many factors relating to the internal situation and regional developments, at a time when political pundits strived to pave the way for the post-Ahmadinejad era, in order to restore the country’s foreign relations, and attempt to find solutions to its economic problems.
The “Iranian Green Movement” has grown weaker as a result of the events that occurred in 2009. Reformists have grown convinced that they cannot nominate their own candidates to the presidential elections which they also want to boycott in protest of the exclusion of dozens of reformist activists and important reformist parties from the political arena. They also think that the Guardian Council of the Constitution is going to reject the candidature of any effective reformist. Despite this, some reformist sources alluded to an agreement being reached to back a conservative fundamentalist candidate with closer ties to the reformists; which would allow them to work freely to create a suitable climate that would permit their resurgence on the political scene, including the return of political parties and figures who played a part in the events of 2009.
In contrast, the fundamentalist movement is preparing to contest the presidential election on the ruins of an administration which it must quintessentially consider as its own own. This administration ruled over an era that it does not want to remember and is trying to forget. The Supreme Leader supported Ahmadinejad and objected to him being questioned by the Shura Council (Parliament), and now the fundamentalists have to deal with the economic and administrative problems caused by that same administration.
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