The controversy surrounding the Iran-China agreement has brought together two men otherwise opposed on every issue. On 28 June 2020, former president Mahmoud Ahmadinejad made a speech accusing the government of having signed “a twenty-five-year agreement with a foreign country unbeknownst to the Iranian nation” and without consulting the people. Shortly thereafter, Reza Pahlavi, the son of the late Shah also condemned what he described as a “shameful” treaty the only purpose of which is to strip Iran of its resources and install foreign troops on its territory – apparently forgetting that his father the Shah had authorized the installation of thirteen US military bases and three listening posts.
The social networks have been submerged by a wave of fake news, claiming among other things that Kish Island in the Arabo-Persian Gulf had been sold to China. Foreign Ministry spokesperson, Abbas Moussavi, was quick to issue a denial, specifying that the idea of this agreement dates from Chinese president Xi Jinping’s visit to Tehran in 2016. After being drafted in Tehran, it was submitted to the Chinese by Foreign Minister Mohammad Zarif during a trip to Beijing in August 2019.
Transport infrastructures and military aid
On 11 July, The New York Times published an excerpt from the agreement. Beijing promises to invest nearly 400 billion dollars over the next 25 years in the construction of factories and above all transport infrastructures, in particular “green” ones, i.e. electrified rail connections. Iran would thus become a strategic component in the New Silk Road, linking Xinjiang to Central Asia, then Turkey and finally Europe, for the export of Chinese goods to the European market. In exchange, Iran will sell its gas and oil to China at preferential prices.
The agreement also provides for military cooperation, including weapons development and intelligence sharing in order to fight “against terrorism, trafficking of drugs and human beings.” It also lays the basis for a military alliance, mostly aerial and naval, between Iran and China and which could ultimately include Russia. In December 2019, the three countries held for the first time joint naval manoeuvres in the Arabian Sea and the Indian Ocean, not far from the Straits of Ormuz.
Thus, China is taking advantage of the void left by the USA to establish a firmer foothold in the region. For Iran, this is a default choice and a consequence of the US withdrawal from the nuclear agreement. By disclosing, at least in part, a plan that still has to be ratified by its parliament, Iran has shown the US and their allies that it has other options in the face of their intransigence and the toughening of their sanctions.
Iran’s efforts at pacification
These punitive measures, the most severe since the 1979 revolution, have had no effect on Iran’s regional activities, in Syria, Yemen, or Iraq. True enough, Iran is playing the card of appeasement in Iraq and trying to defuse tensions with Saudi Arabia. The appointment of a new Iraqi premier, Mustafa Al-Kadhimi, would have been impossible without the backing of Iran’s allies and he visited Tehran on 21 July. According to Middle East Eye, Tehran agreed to support the appointment of the former chief of Iraqi intelligence as Prime Minister in exchange for lifting the freeze on certain assets targeted by the sanctions. The United States apparently have agreed to a military de-escalation in the Gulf and to “look the other way” if a European third party were to unfreeze some Iranian assets. It seems likely that these assets are held by Clearsteam, a subsidiary of Deutsche Börse and a post-trade services provider based in Luxembourg. A Luxembourg court rejected a US request to transfer 1.6 billion dollars in Iranian assets to victims of the 9/11 attacks.
A mysterious series of explosions
There are sign of easing tension between Iran and the US. In June 2020, a former US marine, Michael White, was set free by Iran the day following the arrival in Tehran of an Iranian scientist, Cyrus Asgari, released by Washington. Michael White had been arrested in July 2016. But at the same time, a series of explosions, such as the one at the Natanz nuclear site, amplified rumours of sabotage organised by the USA and their allies. Iran announced having identified “very precisely” the origins of a fire which will be revealed “when the time comes”.
The Persian service of the BBC announced having received a communiqué from a group calling itself “The Leopards of the Fatherland” and describing themselves as “dissidents within the Iranian security apparatus”. Iran seems not to have taken this seriously, but the explosions have continued. The most recent blast, on Sunday 19 July, struck the power plant at Isfahan.
Thirteen provinces classified “red”
Be that as it may, the Iranian leadership is mainly worried about the domestic situation. The country has been hit by a second wave of Covid-19. President Hassan Rohnai has said that 25 million citizens have been contaminated by the virus. After a lull, the number of deaths has risen at a rate of 200 per day. A partial one-week lock-down was declared in the capital but the authorities reject the idea of total confinement which would be a disaster for the poorer classes. Thirteen Iranian provinces have been declared red zones and sixteen others placed on alert. Covid-19 reappeared following the celebrations of the end of Ramadan and the general complacency which ensued. Doctor Alireza Zali, head of the anti-Covid-19 committee in Tehran, believes that 70% of the newly hospitalized patients have recently returned from trips abroad and he has asked for the lock-down in the capital to be extended.
The virus is not the population’s only source of worry. The value of the local currency has plunged drastically against the dollar and is now at 24,000 tomans for one green-back. This new decline has inevitably produced rising inflation. Paradoxically enough, the Tehran Stock-market is booming up and speculative bubble has formed. Deprived of its oil revenues, the government has decided to sell some State properties by floating them on the stock market. For example, the Imidro group, a holding of 8 companies and 55 affiliates specializing in metallurgy and steelmaking. The current bull-market makes it possible to sell these firms for much more than their actual value.
Economist Frashad Moemeni and university professor Alameh Alameh Tabatabi have described the mechanism in these terms: “The shares of certain bankrupt companies have been multiplied fourfold due to this stock-market bubble. Thus, the State has been able to sell its holdings at a better price to secure cash to cope with the financial crisis. This inflation of the shares of ailing businesses via the cancellation of their debt can only lead in the medium term to a greater strain on the country’s economy”. Ahmad Tavakoli, former conservative MP and a member of the ‘Expediency Discernment Council of the System is also opposed to this method. “After looting the country’s wealth in the name of privatisation, they are now trying to sell off the rest in the name of public-private partnerships: schools, universities, hospitals and stadiums.”
The cost of living has risen considerably but there are no shortages as in other countries under US sanctions, such as Venezuela. Shops are well-stocked and the privileged classes experience, none of the difficulties encountered by people obliged to work to feed their families and travel by underground, often overcrowded. But while Covid-19 kills rich and poor alike, life does not have the same meaning in the ultra-luxurious high-rises in north Tehran as it does in the suburbs to the south of the capital. Yet the social protests are less vigorous than before the pandemic. In Iran as elsewhere, Covid-19 has momentarily taken the wind out of the sails of social discontent.
Growing protests against the executions
On the other hand, since the beginning of July, the hashtag “e’daam nakonid” (#DoNotExecuteThem) has circulated by the millions on the social networks. The purpose is to save the lives of three youngsters sentenced to death by the 15th chamber of the Tehran Revolutionary Court, which deals with breaches of national security. Regarded as mohareb (“at war against God”), they are accused of being among the “ringleaders of the riots” protesting the rise in the price of petrol in November 2019. Their lawyers have denounced a one-sided investigation, torture, and extorted confessions. But the Supreme Court validated the sentence on last 14 July, the day when the hashtag’s circulation reached a record high of over 8 million postings.
Several Iranian personalities at home and abroad such as film director Ashghar Farhadi, actor Shabab Hosseini and actresses Golshifteh Farahani and Taraneh Hosseini have come out in support of the appeal. The US cellist YoYo Ma has joined it in music, accompanying the Iranian musician Kayan Kalhor. Ayatola Khomeini’s great grandson has demanded Islamic clemency on his Instagram account. For their part, Donald Trump and Benyamin Natanyahu have given their support via Twitter to the demand for a stay of execution which has in turn sparked another wave of protest.
Mohammad Ali Abtahi, a member of the Assembly of Religious Fighters, had this to say: “Mr. Trump, #DoNotExecuteThem is our internal affair. It has nothing to do with you. The viewpoint of those who oppose the execution of those three people, most of whom are Iranians suffering under the weight of your sanctions, is different from yours.”
Iranians of different opinions have come together and become aware of their combined strength. Many have no wish for their movement to be co-opted and instrumentalised by the Americans. It remains to be seen how the power structure will take into account this balance of forces.
After many hesitations, the judiciary has decided to study the demands for an appellate review.