09/08/16 – Shashank Bengali – The Scott Horton Show

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Introducing Shashank Bengali.
He is a co-author of this very interesting, very important article in the Los Angeles Times.
We thought things would get better.
A year after the nuclear deal, Iranians await economic recovery.
Welcome to the show.
How are you doing, Shashank?
Very good.
Good to hear from you.
Appreciate you joining us today.
And so it says here reporting from Tehran.
Are you in Tehran now?
No, I left Tehran a couple weeks ago.
I was there for about one week under a visa given by the culture ministry.
And so I've been back.
I'm based in India.
I've been back here in India for the past couple of weeks.
Okay.
Good deal.
That's part of calling people on Skype is I don't know where they are without a country code and stuff.
All right.
So, cool.
So I spent a little bit of time there.
And now, as you say, it's eight months since the lifting of the international sanctions.
And I think, you know, listeners of this show are pretty familiar with the idea that the Iranian president, Rouhani, had promised the Iranian people that this nuclear deal is really going to help us.
And it's going to really be worth the loss of face in scaling back their nuclear program and expanding the inspections the way they had.
But you're saying that that reality just doesn't seem to be playing out on the ground there in Iran.
Is that right?
Yeah, I think, you know, a couple of things are happening.
One is that, you know, it's true that the government in Iran, President Rouhani, in order to kind of get public support for his nuclear diplomacy with the West and with the U.S., you know, he had to build up expectations as politicians do anywhere in the world when campaigning for a plan.
They try to sell it to the people.
And Rouhani certainly sold the deal as being something that would change things and change things pretty quickly.
I mean, the day the deal was signed, he referred to it as starting a golden era or a golden age in the country's history.
So he was definitely marketing the deal.
Now, I think either, you know, some would say that he underestimated how difficult it was going to be to actually get the economy going after sanctions were lifted.
Others are saying that he knew it was going to be an uphill battle, but he had to market it because he had to get public support.
That's on the one hand.
The other thing that's happening is, of course, that while a lot of the sanctions have been lifted, particularly those related to the nuclear program, many sanctions remain in place.
The U.S. still has a large number of sanctions stemming from support for terrorist groups, stemming from Iran's development of a ballistic missile program.
And the U.S. still bars Iran from doing business with the U.S. financial system.
So Iran can't actually access dollars, you know, on the open market.
So, you know, dollars are the primary currency of international trade, and Iran's got oil to sell, and they can't do so openly yet.
They still have to go through, you know, third countries, and they lose not only volume of transaction, but they lose, you know, commissions and fees they have to pay.
So all those things are happening at once, and basically the economic sort of windfall that Rouhani had promised has not come to pass yet.
All right, now, well, there's a lot to go over there.
Maybe we'll go back to it, but I wonder whether you think that the Iran deal is actually in jeopardy in Iran.
If his promises are falling so far short in terms of the benefits, do you think that there's a possibility that they'll scrap it?
I mean, is it going to become that unpopular?
Right.
I don't think so.
In Iran, it's still for all the disappointment about the economy.
I think we did hear pretty much a very robust support for diplomacy and for ending Iran's isolation.
So, you know, putting aside the economic frustrations, which Iranians have been living with for some time, I think a lot of people, particularly the middle class, and we spend most of our time in Tehran.
So this is a bit of a skewed view toward the urban middle class, but that's a very important demographic in Iran.
You know, these people, they really felt that Iran was on a collision course with the U.S. and was on a path that could lead toward military confrontation, perhaps a war.
And so from that standpoint, they're very happy that that seems to have been averted with this deal.
Iranians maintain that the biggest threat to the nuclear deal is actually the hawks in the U.S. Congress.
So Republican opponents of nuclear diplomacy who believe that this deal was a giveaway are still the ones who are, you know, arguing for more sanctions, for scrapping the deal altogether.
So the threat may actually come from this side of the ocean as opposed to the Iranian side.
Well, and, yeah, I mean, when you mention all those other layers of sanctions for supporting Hezbollah or developing missiles, etc., etc., U.S. politics basically dictates that that can only get worse or stay the same.
But it's not like there's any kind of real warming here or any sort of, I don't know, even if the Democrats were in control of the House and the Senate, it doesn't seem like there's really much pressure to say, hey, we need to, you know, let the Iranian society see some benefit and some relief from doing diplomacy with us beyond just taking the threat of war off the table for a time, as you said, which is hugely important.
But this could be an opportunity to move forward in our country's relationships.
But it doesn't seem like there's any, you know, political pressure, momentum in D.C. to continue along those lines at all.
Yeah, you're closer to that than me, but I do think that's a pretty good assessment just from what I read and people I talk to in Washington.
You know, there is no real robust Iran lobby, you know, pro-Iran lobby, I should say, in the U.S. that's really going to argue for or, you know, be able to sway even moderates in Congress on dramatically changing relationship, the relationship with Iran.
I think people still want to see, is this country going to end its support for Bashar Assad in Syria?
Is it going to end its support for Hezbollah and various other militia groups that it funds?
You know, no question that Iran, you know, does a lot of things that are adversarial to the U.S. and that are antithetical to U.S. interests.
I think the hope for many in the White House and this administration was that this could be, you know, the nuclear deal could be the beginning of, you know, restarting a conversation that's been halted with Iran for so many decades now and restarting a conversation about those other thornier issues in the Middle East.
You know, both Iran and the U.S., you know, are trying to stop the spread of ISIS, trying to stop the spread of Sunni militant groups across the Middle East.
And frankly, you know, the more I the more time I spent there, it's apparent really to anyone who goes to Iran that culturally the U.S. and Iran have so much in common in terms of, you know, I was, you know, we crashed a wedding one night.
We went to a drag race one Friday morning where all these tricked out cars are like U.S. modeled cars and people are, you know, on the one hand, the clerics say death to America, but the people really do have an affinity toward American culture, Western culture.
And I think there's a lot that we can build on bilaterally in terms of cultural relations.
But, you know, that conversation was meant to begin with the nuclear deal and sort of open the door toward discussing other things.
But so far, you know, you have a lot of Iranians in the government and in the in the theocracy who are basically disappointed by the deal and trying to bring it down.
And they're openly even Rouhani is openly saying that he thinks that he thought this might have been the way to begin discussing other issues.
But he doesn't know if that's possible anymore with the U.S. So a lot of frustration on all sides at the moment.
Yeah.
Well, as you say, at least, you know, the most important thing is that the nuclear program, the already safeguarded civilian nuclear program was really the the biggest outstanding issue between us as much as it was a manufactured crisis.
But now at least that has been put to bed.
So, you know, maybe we won't be friends with Iran for another hundred years, but at least the the excuse to have a real conflict with them has been put to bed for now.
So, you know, that got to take that for the measure of progress that it is.
Let me ask you this.
Do you know what's behind all the price inflation there?
That doesn't that's probably not about the sanctions.
But do they just have a real loose monetary policy right now, buying up their own debt and that kind of thing?
Or or because you talk about in your article about how, you know, all the shopkeeper, everybody's really, you know, all the the shopkeepers and their customers alike are upset about the rising prices all over the place.
Yeah, absolutely.
It's a it's a big concern.
It's been a concern for some time.
And because they've been because Iran has been isolated for so long from the world economy, they've been relying on a lot of debt spending.
And so, you know, that's one of the things that we are trying to understand is when I went to Iran, the biggest news item in the US at least was this.
You know, the revelations about the the payment that the US sent in January to Iran, the four hundred million dollar cash payment and then the one point seven billion in total that were sent there.
You know, the critics called it ransom, but it wasn't a ransom.
It was actually the money the US owed Iran from an arms sale that never went through because of the revolution in seventy nine there.
But the US canceled the money the US owed and was finally paying up.
And there's no sign that money was paid in January, according to reports.
And there's no sign of that amount of fresh cash coming into the economy.
And so a lot of people believe that Iran was debt spending to keep the economy going, especially in areas like construction.
And so now whatever cash they are getting is likely a lot of it's likely being used to pay down some of that debt and clear some of the books.
And therefore you don't see a lot of new money coming into the economy.
So, again, it goes back to what we've been saying from the beginning, which is, you know, the economic windfall that was promised.
There's so much going on under the skin of this economy that you can't see because it's controlled by a very small, very powerful elite.
And they've been trying to balance books for a long time without being on the benefit of being on the open market.
And, of course, with falling oil prices and their limits on the ability to sell their oil, they've really been getting it from all sides.
And so it stands to reason that there's going to be a lot of inflation.
There's going to be, you know, falling currency value and all those kinds of things that conspire to keep prices high and going higher.
Yeah, which, you know, of course, is real stress on anybody in the middle class who's trying to save and move up, you know, punishing savers.
So that's always a real problem there.
And I can definitely see why, you know, if people on the street are making the connection or trying to and say, hey, we were supposed to get an economic benefit from the nuclear deal.
And yet the economy is still getting worse.
They might even blame the deal for making the economy worse, even though that's not really why it's, you know, their government's, you know, shoddy monetary and fiscal policies.
And as you say, just a conspiracy of of facts like low oil prices in the world right now and all that kind of thing working against them.
But, yeah, I just I'd hate to see not only the I'd hate to see the the economic pain that Iranians are suffering through, not just leave them disappointed that the deal didn't come through.
But if they even blame the deal for the economic difficulties getting worse than that could really undermine it.
And I hope that's not the message that they're getting.
But anyway, because because here's why, because if they ever back out of the deal, well, they still presumably would be under the NPT and they would still have a safeguards agreement.
But to the Israelis and to the Americans, that would be basically still equivalent to them announcing that they're deploying H-bombs.
Right.
Look, I mean, I don't think I don't think we should fool ourselves and think that there is any chance of getting a more moderate government, more moderate president that is in power right now in Iran.
Right.
There's no there's no sort of liberal hope out there that that is really going to radically transform the system there.
It's still a bureaucracy.
It's still ruled by by very tough hardliners.
We've seen with Rouhani's election three years ago and with what happened with the parliamentary vote a couple of months back beginning of this year.
What we've seen is the middle class and the moderates and the reformists asserting themselves and really trying to demonstrate to the bureaucracy that they want.
They hunger for somebody who's going to come in and try to reform the relationship with with the West.
And on the other hand, they also want someone who's going to give more social freedoms.
And this government in Iran has basically given up on social freedom.
They know that they have no room to maneuver on that with the hardliners.
So they feel they have enough of a mandate to pursue a deal that's going to help the economy because everyone needs that.
Even the hardliners who have their fingers in all the pies of the economy, they need economic relief.
So they you know, the government of Iran has a mandate to do that.
They don't have a mandate to do much more than that.
And I don't think there's going to be you know, the U.S. has to be a little bit concerned that if they don't find a way or, you know, if this deal doesn't bring some some relief in the next several months, Rouhani is up for reelection next June.
And there's you know, there's a reasonable concern that he might face, you know, a more conservative challenger.
You take polls in Iran with a huge heaping of salt because it's very difficult to do opinion polling in Iran in general.
But you know, one poll that's out there suggested that Mahmoud Ahmadinejad, our old friend from a decade ago, was actually doing very well in opinion polling as far as a head to head confrontation with Rouhani.
So not to say he's going to come back and run the country again, but that there is, you know, a conservative backlash brewing against the shortcomings of this sanctions relief.
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Yeah, well, and if anything, the polls would probably tend to be biased toward the urban, educated and more moderate leaning as opposed to, you know, the people in the countryside who would be more likely to support Ahmadinejad and people like him.
So, yeah, that sounds like a pretty bad portent.
I don't know.
I guess like you're saying, we don't know he's running again.
But anyway, it's a signifier of the political dynamics there.
And there are plenty more like him anyway.
But now, OK, so talk to me a little bit more about the oil, because, geez, I guess I assumed just like the Iranian people assumed that under this deal, more, if not all of it, more Iranian oil would be hitting the market.
But you're saying they still have to go like basically things haven't even changed since before the deal.
There are selling a bit more oil.
The European sanctions that have been very effective at basically and U.S. sanctions, of course, as well, that have been effective at getting countries like India, for example, that was a major buyer of Iranian oil after the U.S. and Europe stopped importing it.
Those countries are able to come online again and start purchasing.
But there's a problem with payments and Iran is unable to pay in dollars.
So it's limited a little bit the degree to what they can sell.
And and, of course, oil prices being so low, even even what is being bought, it's not returned to the levels of, you know, several years ago.
But what little is being sold on the market is, you know, is not fetching what it used to for Iran.
So that is not that is not really having much of an impact at the moment.
Yeah.
You know, I don't know if anybody's really in charge or not.
I guess not.
I mean, we have a president and everything, but it seems like, you know, not even he never mind, you know, congressional obstruction.
It seems like there is no design here to make sure that the Iranians feel like they're benefiting from the deal.
I mean, if if in the days of Dick Cheney and Mahmoud Ahmadinejad, the moderates were the bad guys that were supposed to be marginalized at all costs.
So the hawks could benefit from their conflict.
Then in these days, when the moderates are working together, you know, it seems like our moderates ought to be ought to be making it a point that their moderates have something to show for their diplomacy.
And yet it seems like it's not even really an issue.
It's not like like Obama is even saying to Congress, hey, Congress, you don't want Ahmadinejad back, do you?
We now have, like you said, the nicest Iranian government we're going to get for a long time anyway.
Let's see what progress we can make with them on all whatever issues outstanding between us while we can.
But I don't know.
Is that the way people feel about it in in Iran that they kind of thought there'd be a lot more going on than there has been?
Oh, I think so.
Yeah.
I mean, I think that people, you know, they were first and foremost concerned about just trying to get their economy back and running again.
I think there if you if you sort of try to play it out a little bit and have a conversation and play things forward, of course, they would say, you know, the U.S. should want us in Iran to do better.
The U.S. should want the middle class here to be able to save money and, you know, move into nicer apartments and, you know, find jobs to pay a living wage.
And because all that leads to stability, which leads to positive pressure on the you know, on the ruling theocracy to to reform its behavior.
All these are goals that the U.S. you know, at least the progressives in the U.S. ought to have and ought to be trying to push.
But I think it gets very tricky.
You know, the every time the Obama administration has tried to, you know, improve Iran's access to dollars, for example, that they face immediate and immediate backlash from not just Republicans, but also some Democrats who are worried about reelection.
And, you know, I wrote a story separate to the one you're referring to about the effort to the effort by Boeing to sell aircraft to Iran.
Iran wants to buy about 100 new and used aircraft from Boeing because they're badly in need of updating their very old, very dangerous domestic fleet.
And Boeing is all set.
They've had executives flying in and out of Tehran the last several months.
They've got a deal in principle.
But, you know, your your listeners may know that back in June, July, the Congress put a stop to that deal.
And Obama has he's threatened to veto any action that would stop the sale.
But I think the the consensus now, the understanding is no deal is going to go forward until after November, because it's just far too much of a hot potato to deal with with an election coming for for moderates, moderate Democrats who are facing reelection in the House.
So anyway, all that is a way of saying that I think there is not, you know, a huge, not huge electoral gains to be made by Democrats trying to, you know, advocate for Iranian middle class consumers to do better.
But but certainly I think the yeah, I do.
I do believe that it would it would be a good thing for for progressives in the U.S. if they could sort of, you know, understand that that this stabilizing that that economy and that society could actually go go a ways toward, you know, moving that regime in there in the direction that the U.S. would like to see it going.
Well, the hypocrisy here is pretty legion.
If you go back to 2009 and, you know, to hear Lindsey Graham and the Republicans tell it, you know, basically the CIA should have gone in there and supported the Greens in a coup and done in 1953 all over again or something.
Or sometimes I guess maybe that was Lindsey Graham.
Most of the Republicans didn't quite go that far.
But boy, oh, boy, were they mad at Obama for not doing enough to support the moderate green movement in that election where they tried to make a color coded revolution kind of a thing out of it there.
And yet, you know, and I guess, you know, Rouhani isn't exactly the Greens, but same difference at the point is the, you know, a president with a foreign minister who can get along with ours and that kind of thing, as opposed to the days of Ahmadinejad.
You know, this is exact.
They should be doing everything if just to be consistent with their own position to undermine the likes of the Iranian right.
But I guess, you know, conflict is better politics than peace here in America.
So, yeah, there there are no votes in November for, you know, helping the Iranian middle class.
You know, it's still such a such a demonized demonized place is my sense.
And that's what was part of what made it so fascinating to be there.
As I was saying, it's a place that, you know, we have so much in common with culturally.
It's just, you know, it's by far the most progressive young people that I that I've seen anywhere in the Middle East.
I've been to quite a few countries in the region.
And it's the place where I would say I've seen maybe with the possible exception of Beirut, the fewest number of women who wear the veil, the most numbers of couples, you know, walking around holding hands, you know, little things like that.
They just kind of hint at this, you know, sort of liberated, somewhat tolerant, culturally, you know, sort of sophisticated society.
You know, part of it is, again, we were in the urban areas for the most part.
And and Tehran has always been a bit of a cosmopolitan city.
But, you know, just on the surface, we've got conservative parts of America, of course.
So, you know, I think I just was struck by just how normal things look for a country that supposedly this big boogeyman and this very conservative place.
No question that the regime in charge is conservative.
But but the middle class and the people in the cities do everything they can to quietly push those push those boundaries.
Well, and, you know, I hate to bring this up, but you mentioned the election there.
And, of course, Trump, who knows nothing about the deal, he's never said anything about it for they get some money.
But even then, he said it was U.S. taxpayer money, you know, clearly revealing that he doesn't understand the first thing about the deal that he says is the worst deal in the whole wide world.
I'm sure he doesn't have any idea about what their nuclear program used to be like and the degree to which it's been restricted, what a safeguards agreement even is or anything like that.
And yet on the other side, you have Hillary Clinton, who really opposed the deal in the first place.
Even the New York Times version says that she wouldn't have done it.
They had to get Carrie in there to get the thing actually through.
And even though, you know, she's basically married to the Obama administration and has to support it overall as an effort, she takes every opportunity to say, oh, but I'm going to enforce it much more vigorously than Obama has.
And I'm going to, you know, double down on this and that.
And just imagine, you know, we talk about whatever.
And there's not really much she can do.
Right.
The inspections are already expanded.
All she could really do is just be worse on loosening the sanctions and the economic restrictions on our end in order to basically welch on the deal that Obama, that her predecessor made.
So, right.
I think I think, you know, it's unclear that she could do much more than, you know, just avoid opening up any any relief, any loopholes that the deal might allow for as far as giving Iran, giving Iran the benefit of the doubt, giving them access to dollars, giving them the ability to buy U.S. aircraft.
I don't think that's within the scope and within the letter of the of the agreement.
But there is, of course, you know, this movement in the Congress to prevent those kinds of little things that would make it easier for Iran.
You know, Hillary, I could see her trying to hold Iran, basically throw the book at them and try to extract as much as possible.
I don't really see much.
I don't see, you know, much happening in terms of, you know, I don't think you're going to constrain Iran's behavior much more by being tougher, you know, as tough as the sanctions were.
They were incredibly crippling for the economy.
And that's the way to get at this regime.
And what they got in return was they got a deal.
So I think, of course, enforce the deal.
That makes a lot of sense.
But I also think that, you know, a few months after whoever comes into office, you know, they're going to be confronting an election in Iran, as we've been saying.
And I think I don't think Rouhani is in real danger yet of losing, because I as I mentioned, I think most people who supported him then still support him now because they're happy about, you know, what's the direction things are going in, at least diplomatically, if not economically.
And they don't want to go back to the days of Ahmadinejad.
At the same time, the right in Iran is hitting the government of Rouhani so hard, just like hammering them with comments about how this deal was a capitulation, and it was a failure, and we've given away everything to the West, that, you know, that's only going to intensify in the coming months.
And certainly if Trump is elected, it's going to it's going to go up to 11.
And if Clinton's elected, you know, I still see her having to get tougher.
And that could that could that could also have an impact on Rouhani's support in Iran as well.
All right.
Well, hey, listen, thank you very much for coming on the show to talk with us about this.
My pleasure, Scott.
Thank you.
I really appreciate it.
Everybody, that is Shashank Bengali, reporter for the Los Angeles Times.
And he's got a piece here with Ramin Mastaghim at L.A. Times dot com.
We thought things would get better.
A year after the nuclear deal, Iranians await economic recovery.
That's the Scott Horton Show.
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