Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News.
Speaker 2: Hello and welcome to another episode of the Odd Lots Podcast.
Speaker 3: I'm Joe Wisenthal and I'm Tracy Alloway.
Speaker 2: Tracy, it's now July twenty eighth, and the Iran War
Speaker 2: continues to go on. And it's sort of extraordinary the
Speaker 2: fact that, you know, in the beginning here was this
Speaker 2: thing that was going to be if it persisted, sort
Speaker 2: of cataclysmic perhaps for the global economy and particularly related
Speaker 2: to oil prices, and yet on a sort of day
Speaker 2: to day basis, it's not even necessarily the biggest headline
Speaker 2: news that most people are talking about.
Speaker 3: People get used to a lot of things very quickly.
Speaker 3: I mean, it still has the potential to be catastrophic
Speaker 3: at some point in time. But you're absolutely right. We've
Speaker 3: gone months now since when did the start in March?
Speaker 4: Yeah, before beginning of market.
Speaker 3: Yeah, months now with a war which technically hasn't even
Speaker 3: been declared a war. It's an operation. Is that what
Speaker 3: the military operation?
Speaker 2: I think it's been a long people talk about, you know,
Speaker 2: the Forever War. I think the last it's been a
Speaker 2: long time since America actually ever acknowledged that it was
Speaker 2: in a capitol w war.
Speaker 3: Very true, but it does kind of beg the question
Speaker 3: about what happens when all of this is over?
Speaker 1: Right?
Speaker 5: Yeah?
Speaker 2: Right, I mean hopefully it ends one day. And I
Speaker 2: have to say so, obviously we talk about oil a
Speaker 2: lot when we talk in terms of economics. I have
Speaker 2: to admit, you know, it's funny. We've done multiple episodes
Speaker 2: about the Iranian stock market, which is a fascinating topic.
Speaker 2: But other than the fact that obviously Iran produces a
Speaker 2: lot of oil, I actually like basically know nothing about
Speaker 2: the economy, like the day to day, what a typical
Speaker 2: middle class.
Speaker 3: There's some things I know. So there's oil. Yes, there's
Speaker 3: Iranian cars, famously, which I would be interested in experiencing
Speaker 3: one day, not necessarily buying, but experiencing pistachios.
Speaker 2: I was going to say, so, like pistachios, like nuts,
Speaker 2: I imagine, But like what this sort of job market is,
Speaker 2: what a day to day what's out there and you know,
Speaker 2: whatever the Iranian equivalent of LinkedIn or indeed dot com is,
Speaker 2: Like what people do, what people what people want career wise,
Speaker 2: all of these things. Because there's an Iranian stock market, obviously,
Speaker 2: you know, presumably there are like startups and companies that
Speaker 2: one day want to list, But I don't know what
Speaker 2: any of them do. I have so many questions I
Speaker 2: guess about, like what a quote normal Iranian it's imagined
Speaker 2: the war ends. And also there aren't sanctions, right, what
Speaker 2: would an Iranian?
Speaker 3: Well, this is because at various points in time previously
Speaker 3: you have had these burths of optimism about the opening
Speaker 3: up of the Iranian economy, the lifting of sanctions. It's
Speaker 3: one other thing I know, again not much, but one
Speaker 3: thing I know is it's a huge economy. Right with
Speaker 3: our previous Iranian stock market guest the size of Turkey, right,
Speaker 3: something like that.
Speaker 4: It's a really big economy.
Speaker 3: It's a big economy. And so what happens if that
Speaker 3: starts to open up? Can it open up? Are we
Speaker 3: going to see what happened previously where it kind of
Speaker 3: starts to open up and then it shuts down again.
Speaker 3: I don't know.
Speaker 2: It was several months ago, Like there was like some
Speaker 2: random night where I was clicking on random Wikipedia links
Speaker 2: and I was like, I wonder what Ahmed de Najad's
Speaker 2: economic policy platform was when he ran for president for
Speaker 2: the first time. I like started clicking out his campaign.
Speaker 2: I was like, I wonder and it was like seemed
Speaker 2: kind of vague, and he had some I wish I.
Speaker 4: Could remember the slogan. It was really good. It was
Speaker 4: something like if we imagined it, we could do it.
Speaker 2: It was like, you know, the most inoffensive sort of
Speaker 2: like domestic policy agenda slogan. And I couldn't really find
Speaker 2: that more specifics. But you know, you have elections, et cetera.
Speaker 4: What are they run on? What do they you know,
Speaker 4: where do they stand on?
Speaker 2: Taxis all these questions about sort of like quote normal
Speaker 2: unquote economic life and Iran.
Speaker 3: Is that your way of saying that you want to
Speaker 3: talk about the political economy of around, I want.
Speaker 2: To talk talk about the political economy and the even
Speaker 2: regular economy of Iran. Anyway, I'm very excited to say
Speaker 2: we do, in fact have two perfect guests on who
Speaker 2: will teach us much more about this. We're going to
Speaker 2: be speaking with Jegana Torbodi, Iran correspondent for the New
Speaker 2: York Times, as well as Bisorgham Sheriff Fodding. He's the
Speaker 2: head of Digital at Iran International. So both of you,
Speaker 2: thank you so much for coming on online.
Speaker 5: Thank you so much for having me, Thanks for having us.
Speaker 2: Oh, and I should of course have mentioned that they
Speaker 2: are the co authors of a brand new book, Stolen Revolution,
Speaker 2: Betrayal and Hope and Modern Iran. So again, thank you
Speaker 2: both so much for coming out. Why don't we just
Speaker 2: start What is the premise of this book? Why was
Speaker 2: this an important book to write? Or what endeavored do
Speaker 2: you to go on this project?
Speaker 5: Yeah, well, thank you so much for having us. I mean,
Speaker 5: we started on this project around five and a half
Speaker 5: years ago, so late twenty twenty, and I think our
Speaker 5: vision was at first we were very focused on kind
Speaker 5: of trying and explain as you sort of mentioned, Iran's
Speaker 5: political economy and in particular sort of the roots of
Speaker 5: corruption and sort of state control influence over the economy
Speaker 5: over the past forty fifty years. And then, of course
Speaker 5: as time went on and since twenty twenty, a lot
Speaker 5: of things have happened in Iran and our focus both
Speaker 5: broadened and I think deepened. But sort of throughout our
Speaker 5: book is sort of this continuous thread of the promises
Speaker 5: that the current government, the Islamic government came to power
Speaker 5: on in nineteen seventy nine, particularly around social justice and
Speaker 5: how it might redistribute Iran's really immense resources and sort
Speaker 5: of what that has actually led to in practice today,
Speaker 5: which is far from those promises.
Speaker 4: Yeah.
Speaker 3: So you describe the Islamic Republic as evolving into this
Speaker 3: sort of mafia like state, and I guess there's a
Speaker 3: difference between an authoritarian government and a corrupt one, although
Speaker 3: they often go hand in hand. How did Iran kind
Speaker 3: of evolve from the authoritarian Islamic Republic to a place that,
Speaker 3: in terms of it it's economy was actually extracting value
Speaker 3: from its people.
Speaker 6: Yeah. I think maybe it's good to define what do
Speaker 6: we mean by a mafia state. What's the difference between
Speaker 6: a mafia state and a normal totalitarian government. I think
Speaker 6: in a normal society, all citizens are equal and they
Speaker 6: benefit the same from the government and the wealth of
Speaker 6: a nation. But in a mafia state, you should imagine
Speaker 6: a layered society and citizens are rewarded based on their
Speaker 6: loyalty to the system. So the more loyal you are
Speaker 6: to the government and the state, the more you will
Speaker 6: benefit from the resources. So that's how the Islamic Republic
Speaker 6: was from the beginning, and it excluded its critics and
Speaker 6: it rewarded people who were loyal and it was an
Speaker 6: ideological government. People who believed in the values of the
Speaker 6: Islamic Republic were rewarded. But as we move forward, we
Speaker 6: see that this trend was reflected more and more in
Speaker 6: the economy. You see that how evolutionary guards and other
Speaker 6: religious foundations they come and take over a big chunks
Speaker 6: of the economy. And I can say that this mafia
Speaker 6: state and the layered society is even reflected in Iran's
Speaker 6: foreign policy. So in the eyes of Iranian state, maybe
Speaker 6: a Hegebolagh member in Lebanon, or who the militia in Yemen,
Speaker 6: they are more loyal to the Islamic Republic than let's
Speaker 6: say a professor at Tehran University, so they should benefit
Speaker 6: more from the wealth of the nation. So that's why
Speaker 6: we have had all these discussions within the Islamic Republic
Speaker 6: that while the Iranian government can't afford to provide free
Speaker 6: milk at schools, it has the money to give to
Speaker 6: its proxies in the region to kind of reward their loyalty.
Speaker 3: Right, maybe I should back up even further at this
Speaker 3: point and ask the Iranian Revolution how much of that
Speaker 3: was about economic grievances on the part of the people,
Speaker 3: the idea that, as so many revolutions are, you know,
Speaker 3: things need to get better, versus just the clergy basically
Speaker 3: seizing power.
Speaker 5: I think it was sort of a mix of a
Speaker 5: few different things. The working classes and sort of the
Speaker 5: lower socioeconomic classes did not really jump in to be
Speaker 5: part of the revolutionary coalition until quite late in the
Speaker 5: game when they really started to suffer from some of
Speaker 5: the Shaw's economic policies, kind of towards the very end.
Speaker 5: Really at the beginning, it was more kind of like
Speaker 5: the middle classes and the intellectuals who were sort of
Speaker 5: forming this kind of revolutionary coalition from a bunch of
Speaker 5: different impulses. There were some who wanted kind of an
Speaker 5: Islamic government. There were others who were communists and were
Speaker 5: kind of more anti us, anti imperialists, and there were
Speaker 5: others who just wanted kind of a secular, liberal democracy
Speaker 5: and felt that the Shah was trampling on people's rights.
Speaker 5: All of those people kind of joined in. But what
Speaker 5: we see, especially kind of towards the end of the revolution,
Speaker 5: as we're getting to nineteen seventy nine, is that the
Speaker 5: leader of the revolution, Ruhala Homani, who then became the
Speaker 5: leader of the new government, he wanted to kind of
Speaker 5: co op some of the most effective sort of leftist
Speaker 5: arguments because he wanted kind of their young people, they're
Speaker 5: their supporters, to sort of also support him, and so,
Speaker 5: you know, these arguments of kind of the bourgeoisie versus
Speaker 5: the proletariat. You know, Homiani kind of adopted some of
Speaker 5: those terms with an Islamic tinge, and therefore sort of
Speaker 5: he promised and then in the first few months, especially
Speaker 5: of the revolution, he also promised that, you know, we
Speaker 5: are going to provide for the poor. We're going to
Speaker 5: provide free electricity, free buses for the poor, We're going
Speaker 5: to build housing. And I think the government's wanted to
Speaker 5: present itself as being on behalf of some of those
Speaker 5: the kind of the lower classes of society, and presented
Speaker 5: them kind of as its base. As time goes on,
Speaker 5: what we see, especially kind of in the last ten
Speaker 5: to fifteen years, it sort of turned its back on
Speaker 5: a lot of those promises to where it's not even
Speaker 5: really even pretending anymore that that is kind of what
Speaker 5: it's aimed at. And we can kind of talk about
Speaker 5: some of the turning points there, but it really was
Speaker 5: kind of a gradual shift over time, and then especially
Speaker 5: since twenty seventeen, you really see this growing dissatisfaction amongst
Speaker 5: not just middle class Iranians but also people who are
Speaker 5: poor and struggling against what this revolution has brought to them.
Speaker 2: Okay, everyone's ability to derive wealth or income or is
Speaker 2: somehow linked to where they stand in this hierarchy of
Speaker 2: supporting the government or supporting the.
Speaker 4: State in some way or another.
Speaker 2: Let's talk about where the government mint gets its resources
Speaker 2: to make these allocations, whether it's housing, whether it's electricity,
Speaker 2: whether it's obviously munitions for various groups, et cetera. Obviously
Speaker 2: we know oil is a big part of it, but
Speaker 2: what are the main How would you big picture decompose
Speaker 2: what the Iranian economy sort of basically looks like.
Speaker 5: So I think, of course, yeah, oil is a big one.
Speaker 5: It has kind of this huge resource that's very valuable
Speaker 5: and that it can kind of use the fund itself.
Speaker 5: But also Iran has a pretty diversified economy in terms
Speaker 5: of its industrial base, and that is partially as a
Speaker 5: result of kind of the Shaw Zone policies. But then
Speaker 5: also sort of this idea that took root after the revolution,
Speaker 5: that we need to provide for ourselves, we need to
Speaker 5: be self sufficient. This was a very important kind of
Speaker 5: part of both the ideology of kind of present in
Speaker 5: that moment. In general, this sort of like twentieth century
Speaker 5: sixty seventies backlash against interference by world powers in the
Speaker 5: internal affairs of Iran and of other countries. So there
Speaker 5: was kind of this very strong idea, especially among Iranian
Speaker 5: leftists and including you know, some of the clerical class,
Speaker 5: that we need to kind of establish our own industries
Speaker 5: and be independent. So Iran has a car industry. Iran
Speaker 5: has steel plants that were built after the Iran Iraq
Speaker 5: War and it became operational sort of after the iron
Speaker 5: I Rock War that produce you know, huge amounts of steel,
Speaker 5: you know, kind of leading the Middle East in that industry.
Speaker 5: And these industries are maybe not necessarily the most efficient,
Speaker 5: and they don't have a ton of foreign investment, but
Speaker 5: they provide employments. Iran has a huge agricultural sector, that is,
Speaker 5: which is an enormous source of jobs in Iran, which
Speaker 5: has been very important as it's been under sanction. Of course,
Speaker 5: the agricultural sector has a lot of other costs, including
Speaker 5: overuse of water, which Iran has been facing, but it
Speaker 5: was sort of it's an important at least source of
Speaker 5: jobs in the economy. So these are all these major
Speaker 5: industries that kind of first start out after the revolution
Speaker 5: being very much under the purview of the formal states
Speaker 5: kind of what we in the West would recognize as
Speaker 5: a government, including and a ministry, you know, a ministry
Speaker 5: that is answerable to parliament, that oversees, for instance, the
Speaker 5: steel industry or the minds in Iran. Over time, and
Speaker 5: we can we should kind of talk about this more,
Speaker 5: the control over those industries moves away from sort of
Speaker 5: the recognized parts of the state into kind of this
Speaker 5: shadow state, you know, which is sort of much more
Speaker 5: linked to the security forces and to these entities that
Speaker 5: are kind of controlled by the clerics but aren't really
Speaker 5: accountable to the rest of the government.
Speaker 6: If I add a bit to that, because if you
Speaker 6: look at the history of the Islamic Republic, well, of course,
Speaker 6: the revolution started with this massive wave of nationalization the
Speaker 6: state to control of the major industries shipping, mind banking,
Speaker 6: and many more. But gradually, as we come forward, after
Speaker 6: a decade or two, the Indian state decided the privatization
Speaker 6: of these major industries. But I think the main problem
Speaker 6: was the corruption that we didn't see real privatization. So
Speaker 6: usually people who were close to centers of power, they
Speaker 6: came and took over these industries, and they like they
Speaker 6: took them over with a very low price. Like imagine
Speaker 6: factories that were owned by the government, they were taken
Speaker 6: over by elements very close to the security forces. And
Speaker 6: so after that, many of these factories they didn't come
Speaker 6: back to production. The machinery was sold and the land
Speaker 6: was turned into maybe a residential place to build apartments.
Speaker 6: So we saw that that level. But still, as Y'regana mentioned,
Speaker 6: we have private sector in your own you know, the
Speaker 6: problem with private sector is that if a business becomes
Speaker 6: successful and it passes a certain threshold, you will see
Speaker 6: the security forces coming and knocking on your door and
Speaker 6: they want their share. And that's again it's like in
Speaker 6: Mafia stated, which you can imagine if you have a
Speaker 6: restaurant in I don't know, in mafia movies, if you
Speaker 6: have a successful restaurant, they would come and they want
Speaker 6: their share from these businesses. And as we showed in
Speaker 6: the book, one of the major new sectors was the
Speaker 6: startup sector. Of course, this sector was started by many
Speaker 6: Iranians who came back from abroad to launch this sector.
Speaker 6: But they saw that how the security forces came and
Speaker 6: forced them to give up these firms.
Speaker 3: Just in terms of the state like becoming more intertwined
Speaker 3: with the private sector. I learned two new words, or
Speaker 3: I guess terms from your book, and I'm going to
Speaker 3: mispronounce the first one because I've only ever read it.
Speaker 3: I've never said it aloud, But bonyads, is that right? Bonyads?
Speaker 6: Okay?
Speaker 3: Bonyads? And then invisible ports. Can you talk a little
Speaker 3: bit more about those two things as sort of examples
Speaker 3: of how the state becomes intertwined with the private sector
Speaker 3: or the general economy.
Speaker 6: Okay. So again, these religious religious foundations there were launched
Speaker 6: at the beginning of the revolution and they're very interesting.
Speaker 6: So like one of them was this massive foundation that
Speaker 6: was established to distribute the wealth among the poor, and
Speaker 6: it seemed quite a noble cause. And of course we
Speaker 6: had other foundations to look off the families of markers
Speaker 6: of Ivanivok war and the veterans of the war. So
Speaker 6: these massive foundations, they were established by the order of
Speaker 6: the founder of the revolution ALCHMENI and the heads of
Speaker 6: those foundations, they had massive power. So we show in
Speaker 6: the book, for example, that's how the head of one
Speaker 6: of these foundations, he wanted to import some wheelchairs into
Speaker 6: the country to give it to the veterans of war.
Speaker 6: But at that time, the Minister of Industries he was
Speaker 6: against the import because he believed that the imports of
Speaker 6: German wheelchairs will be undermining the domestic production. But the
Speaker 6: head of foundation, he was an MP at that time,
Speaker 6: member of the parliament, so he went to the parliament
Speaker 6: and paused to allow the foundation to import anything they
Speaker 6: want without any government supervision. And he wanted to do
Speaker 6: that to maintain the revolutionary nature of the foundation, and
Speaker 6: he didn't want to be constrained by bureaucracy and red tape.
Speaker 6: It's interesting that the same person decades later, he becomes
Speaker 6: the speaker of the Parliament during the reform movement, and
Speaker 6: he found these invisible ports or invisible jetties. How is that.
Speaker 6: So we see that these foundations and the revolutionary guards,
Speaker 6: they had massive power to import anything they wanted without
Speaker 6: audit and without taxation, and this character of the book.
Speaker 6: Decades later, he goes to southern ports of Iran, and
Speaker 6: he saw a dedicated port that belonged to the Revolutionary
Speaker 6: Guards and they could import anything they wanted without any
Speaker 6: supervision of the God. So in a way, you see
Speaker 6: how this mafia state was formed gradually, how the revolutionary
Speaker 6: nature of the foundation forced them into creating a system
Speaker 6: which was not transparent from the start, and later on
Speaker 6: the same system turned into a mafia state.
Speaker 5: And you sort of see how there is some good intentions, right,
Speaker 5: like the idea of importing higher quality wheelchairs from abroad
Speaker 5: to help veterans of the war who had been injured.
Speaker 5: You know, that is a laudable intention. But you know,
Speaker 5: this character, this person that we're talking about, Matthew cawdou Be,
Speaker 5: he sort of in that decision in the nineteen eighties
Speaker 5: establishes this idea that these foundations, and it wasn't just him,
Speaker 5: but this was just one example. These foundations are above
Speaker 5: the law and they get special dispensations and special privileges
Speaker 5: because they're kind of associated with the revolutionary state. Private
Speaker 5: companies don't get those rights. Entities you know, that are
Speaker 5: disconnected from the government don't get those rights. But he
Speaker 5: establishes that and that same thinking, you know, as it
Speaker 5: continues and is not challenged over the years, sort of
Speaker 5: grows into eventually these invisible ports and many other abuses.
Speaker 2: It's so striking like listening to this because you I mean,
Speaker 2: on the one hand, obviously or on very distinct story,
Speaker 2: but on the other hand, you know, so many of
Speaker 2: these themes we've already discussed, you see, like echoes of
Speaker 2: them or versions of them in all sorts of developing
Speaker 2: states or whatever. You know, obviously when you talk about, oh,
Speaker 2: here is the still factor or some industrial facility, and
Speaker 2: then it's been reproposed in some way for some non
Speaker 2: vital thing. You sort of think about late era Soviet Union,
Speaker 2: for example, it's like, here's the company that wants to
Speaker 2: make bread, but they just sell other parts abroad for
Speaker 2: hard cash and then don't actually serve their purpose. Were
Speaker 2: there ever any forces in government that tried to keep
Speaker 2: some of these entities in line. I assume there must
Speaker 2: be like some conflict or efforts to sort of maintain
Speaker 2: this thing where you have something that resembles industry has
Speaker 2: some perverse incentives to maybe like take some shortcut for
Speaker 2: the personal gain of whoever is the controlling entity. Were there, ever,
Speaker 2: attempts to build in mechanisms such that these perhaps public
Speaker 2: resources couldn't be expropriated in some way, for sure.
Speaker 5: I mean there were definitely people who, maybe too late,
Speaker 5: sort of saw the errors of some of the ways
Speaker 5: that the government had acted, including people who had been
Speaker 5: part of the problem, you know, earlier on in their career.
Speaker 5: So like for example, Matthy Caderby who he mentioned, who
Speaker 5: is a cleric who an MP. He led one of
Speaker 5: these one yards, but then later on becomes part of
Speaker 5: the reform movement and rises to great power and tries
Speaker 5: when he's in parliament to establish some standards of transparency
Speaker 5: for these entities, these one yards and other institutions that
Speaker 5: answered directly to Iran Supreme Leader, and he's unsuccessful. By
Speaker 5: that point, which was the late nineties early two thousands,
Speaker 5: these entities and the Supreme Leader himself were just far
Speaker 5: too powerful for the elected government to really put a
Speaker 5: check on. There's another anecdote that we talk about at
Speaker 5: length in the book, which was in two thousand and
Speaker 5: four when Iran was opening a new airport. And this
Speaker 5: is a big moment for Iran. It had been planning
Speaker 5: this airport actually since before the revolution. Of course it
Speaker 5: was delayed, you know, because of that and because of
Speaker 5: the war. But this was going to be kind of
Speaker 5: this big moment when Iran was going to have an
Speaker 5: airport to kind of rival Dubai and Istanbul. On the
Speaker 5: day that it's being opened, the Revolutionary Guards drive armored
Speaker 5: land cruisers onto the runway and prevent the first plane
Speaker 5: from landing. They have to be begged by the Transport
Speaker 5: Minister before they allow it to land. When the second
Speaker 5: plane wants to come in, they scramble a fighter jet
Speaker 5: and threaten it and it has to divert south to Esfahan.
Speaker 5: And why did this happen, the Transport Minister later revealed
Speaker 5: in a series of interviews, because the Guards had wanted
Speaker 5: the contract to operate that airport, but they hadn't provided
Speaker 5: the best price, and so the government had given it
Speaker 5: to a Turkish Austrian firm and the airport was shut down.
Speaker 5: It was basically a no fly zone for months, and
Speaker 5: it was reopened with state firms running the airport rather
Speaker 5: than this foreign contract. And so you know our character,
Speaker 5: Matthew Cabrby, he's a Speaker of Parliament. His MPs write
Speaker 5: a report about what happened, but ultimately there's no accountability
Speaker 5: for that action. And as we go on in time,
Speaker 5: we get to a point where the guards don't even
Speaker 5: really have to take such a dramatic step. Their dominance
Speaker 5: in contracting and in you know, different parts of Iran's
Speaker 5: economy sort of goes unquestioned. And I think the element
Speaker 5: of Iran's government that is somewhat unique, at least in
Speaker 5: its specifics, from you know, a place like the Soviet
Speaker 5: Union or other places, is that because all of these
Speaker 5: institutions answered to someone who's sort of seen as a
Speaker 5: holy figure and whose power comes from God. Effectively, it's
Speaker 5: much more difficult to question both his authority and to
Speaker 5: establish any accountability over institutions that only report to him,
Speaker 5: which is how Iran's government is structured. Both the military
Speaker 5: and these big bonyands only report to him. And how
Speaker 5: can you question someone who's, you know, effectively God's representative.
Speaker 3: I mean the extraction from the private sector. How much
Speaker 3: of that is about consolidating political power and how much
Speaker 3: of it is about being worried about I guess foreign
Speaker 3: threats that might come in through additional capital in the country,
Speaker 3: Like can you kind of decompose or try to maybe
Speaker 3: psychoanalyze the motivations, for instance, the Iranian Guards wanting to
Speaker 3: stop a new airport from operating.
Speaker 6: I think the way I see it is the competition
Speaker 6: of different factions within the same system. It's not that
Speaker 6: one faction wants to have all the money and the
Speaker 6: other faction is promoting transparency and is fighting corruption. Usually
Speaker 6: you see with a change of government, you see that
Speaker 6: how the new government tries to empower people and elements
Speaker 6: close close to that, And we explain that in the book,
Speaker 6: and how for example, Ahmadinejad when he came to power,
Speaker 6: he tried to empower people close to him. But when
Speaker 6: the next presidents when they come, including Hassando Gohani, we
Speaker 6: see that he also try to somehow make sure that
Speaker 6: people close to him can benefit from such resources. So
Speaker 6: I think there is this in fighting that you see
Speaker 6: that sometimes the Revolutionary Guards they need to use their
Speaker 6: military and intelligence power, and sometimes the other faction can
Speaker 6: take control. But overall, I think there are many elements
Speaker 6: that have added to this competition. Of course, the sanctions
Speaker 6: are one of those decades of sanctions. They have created
Speaker 6: this lack of transparency within the state and each faction
Speaker 6: they come and they try to take a part of
Speaker 6: the business, trying to show themselves essential for the everyday
Speaker 6: affairs of the country to be handled. For example, before that,
Speaker 6: Iranian oil ministry has been in charge of selling goals.
Speaker 6: That's been the case for decades. But when the sanctions
Speaker 6: increased in recent decades and the government couldn't pay its
Speaker 6: debts to let's say Iran police and their military forces,
Speaker 6: it gave them access to oil. So a big part
Speaker 6: of Iranian oil export has been done by the Revolutionary
Speaker 6: Guards at this stage. Some estimate that half of the
Speaker 6: Union oil is sold by the Revolutionary Guards. So I
Speaker 6: think the way I say it is just these different
Speaker 6: factions they're constantly fighting with one another trying to have
Speaker 6: a bigger share of the economy intercy.
Speaker 5: I think your question like there's one anecdote that sort
Speaker 5: of exactly answers it. So I think it's both. I
Speaker 5: think they came by their suspicion of foreign intervention in
Speaker 5: Iran's economy. Honestly, I mean, if you look at the
Speaker 5: twentieth century history of Iran, it is one of economic
Speaker 5: exploitation of the country by world powers, US, the British,
Speaker 5: the Russians, et cetera. And also they have used that
Speaker 5: ideology in a way that has benefited themselves. So the
Speaker 5: one anecdote that kind of gets at this is in
Speaker 5: twenty twenty twenty twenty one, when COVID is hitting Iran
Speaker 5: is one of the worst affected countries by COVID, the
Speaker 5: Supreme Leader decides to bar the import of many Western
Speaker 5: doses of the COVID vaccine, and kind of almost simultaneously,
Speaker 5: the Iranian government decides to launch on a project to
Speaker 5: make its own COVID vaccine. But what's the entity that's
Speaker 5: given that contract. It's the conglomerate controlled by the Supreme
Speaker 5: Leader at Ecomony. So he's both deciding a policy that
Speaker 5: and I think, you know, if he's no longer with us,
Speaker 5: but if we had given him truth serum, I think
Speaker 5: he actually was suspicious of the motivations of the US
Speaker 5: and the British and you know, making these COVID vaccines,
Speaker 5: I think, you know that was probably genuine. But also
Speaker 5: with that decision, he creates a shortage, and then his
Speaker 5: conglomerate that would profit from a government contract like this
Speaker 5: is able to step in and kind of save the
Speaker 5: day and also make these these vaccine doses. So you
Speaker 5: kind of see in that one example both the ideology
Speaker 5: and the self interest kind of really melding seamlessly in
Speaker 5: a way that it's just kind of remarkable to me.
Speaker 5: So I think Bozark's answer stands, but I also think
Speaker 5: that it's sort of both of those factors that you
Speaker 5: identified acting at once.
Speaker 3: Yeah, and Joe, I should just say the one other
Speaker 3: thing I know about Iran's economy is that it has
Speaker 3: been the subject of interest, to put it mildly, to
Speaker 3: many foreign governments over time, and of course famously BP
Speaker 3: you know this right, BP has its origins as a
Speaker 3: Iranian Anglo Iranian oil company.
Speaker 2: So one question I have, just again from a sort
Speaker 2: of pure economic developmentalist question. Many of the things that
Speaker 2: you describe they would call like import substitution in developing economies,
Speaker 2: et cetera. It's like, okay, like we don't want to
Speaker 2: import too much of X, because then our sort of
Speaker 2: nascent company can't compete, et cetera. And in many cases
Speaker 2: there could be logic haves. There ever been a figure
Speaker 2: in modern run in history who's sort of like the
Speaker 2: sort of the export oriented development Let's build an industry
Speaker 2: that can compete is what we always talk about with
Speaker 2: the you know, the East Asian countries. Let's build an
Speaker 2: industry set aside oil that competes and that we want
Speaker 2: to thrive, et cetera. And the export market will be
Speaker 2: the test of whether this is a successful company or not.
Speaker 2: Has anyone like tried this sort of popular idea.
Speaker 6: I think the closest that comes to my mind was
Speaker 6: Hashimir of San Johnny President hashimirrav San Johnny, who was
Speaker 6: saying that he wants to turn Iran into an Islamic Japan.
Speaker 6: So he was very fascinated by metro system in Western
Speaker 6: societies and he wanted to create the same system. But
Speaker 6: at the end, I think he failed to do that.
Speaker 6: What do you think they're going to?
Speaker 5: Yeah, I mean I think, you know, I don't know
Speaker 5: that I would if anyone should cite me on this,
Speaker 5: but I think, you know what I'm kind of looking
Speaker 5: at sort of how Iranian companies compete. I mean, given
Speaker 5: the fact that the way, the direction, the direction the
Speaker 5: economy has gone in is favoring these entities, these companies
Speaker 5: that are linked to powerful people in the state, and
Speaker 5: that's sort of poisonous to competition, and so the idea
Speaker 5: that even within Aron's domestic economy, the most the truly,
Speaker 5: most talented and meritorious companies are not the ones that
Speaker 5: rise to the top, are the most successful, or get
Speaker 5: the most market share. It's the ones that are smart
Speaker 5: enough or able enough to sell enough of their shares
Speaker 5: to some powerful entity that at least they're then protected
Speaker 5: from being perhaps raided or shut down, or maybe they
Speaker 5: get some sort of like special dispensation from the government.
Speaker 5: And then the idea that those companies that are themselves
Speaker 5: maybe not the best are then going to compete externally
Speaker 5: with like the semens of the world or ge just
Speaker 5: seems a bit even if we set aside sanctions being
Speaker 5: a huge barrier, which they are, it seems a bit
Speaker 5: unrealistic to me that Iran would succeed in that kind
Speaker 5: of market. Although you know, Iranian steel has you know,
Speaker 5: they get they used to get a lot of foreign
Speaker 5: foreign revenue, foreign currency from exporting steel to the various countries,
Speaker 5: so they are there is a market for some Iranian goods,
Speaker 5: but it's you know, I don't know that they would
Speaker 5: kind of be at the top of any sort of
Speaker 5: world list.
Speaker 3: Can we talk about the tech sector specifically, because again,
Speaker 3: this was surprising to learn that at one point Iran
Speaker 3: had a vibrant startup scene. But on the other hand,
Speaker 3: it kind of makes sense. If you think about a
Speaker 3: place where, because of sanctions you don't have a lot
Speaker 3: of Anisons or ubers around, then maybe that's the perfect
Speaker 3: you know.
Speaker 2: I also just associated around with having a lot of
Speaker 2: young Yeah.
Speaker 3: Absolutely, So what did Iran's tech startup scene actually look like?
Speaker 5: Yeah, I mean, this is a fascinating chapter and one
Speaker 5: that we really dug into. So Iran was the second
Speaker 5: country in the Middle East, after Israel to get access
Speaker 5: to the internet. So it's a very kind of like
Speaker 5: tech forward pioneering country in that way. And towards the
Speaker 5: end the sorts of the early twenty tens, more and
Speaker 5: more young people are starting to get online. The Dorohani
Speaker 5: government kind of this more moderate government coming in, they
Speaker 5: enabled access to three G and four G internet, so
Speaker 5: there's suddenly this access to mobile data and to the
Speaker 5: ability to kind of have apps and stream video all
Speaker 5: those sort of things. So it really took off, and
Speaker 5: Iranian users wanted content, they wanted apps, and as you mentioned,
Speaker 5: the sanctions meant that even with a nuclear deal, because
Speaker 5: the nuclear deal, if you remember, did not allow American
Speaker 5: companies to go into Iran. So the leading tech companies
Speaker 5: in the world, Amazon, Uber lived, they could not operate.
Speaker 5: So there's this sort of protected ecosystem of eighty million
Speaker 5: at that time, eighty five million or so population that
Speaker 5: needed apps, and Iranian businesses could suddenly launch and serve
Speaker 5: those people. And so that's really what happened. So you
Speaker 5: kind of start to see the first inklings of this
Speaker 5: sort of tech industry forming in the early twenty tens.
Speaker 5: You get some very early foreign investment even before the
Speaker 5: nuclear deal happening, and some Iranian expats moving back and
Speaker 5: sort of seeing what's happening and starting venture capital funds.
Speaker 5: And this really then takes off after the nuclear deal
Speaker 5: is signed in twenty fifteen and goes into effect in
Speaker 5: early twenty sixteen, and foreign investors are just really intrigued
Speaker 5: by this idea that we finally have like the last
Speaker 5: sort of green field opportunity is in Iran, and maybe
Speaker 5: it could be the next Russia, it could be the
Speaker 5: next China, and we could really get in early on
Speaker 5: this and so that you know, we kind of trace
Speaker 5: what happens after that.
Speaker 4: It was great.
Speaker 2: If you go to the website of the University of
Speaker 2: Tehran right now, it's all the cliches of every university.
Speaker 2: They have a picture of a bunch of happy grads.
Speaker 2: They have the required photo of a multi racial classroom,
Speaker 2: which every university has on their website, all of these
Speaker 2: people learning. But let's talk a little bit more about
Speaker 2: what you know. Okay, you mentioned like the ubers and lyfts, etc.
Speaker 2: Like what else were people trying to build? Like how
Speaker 2: far did this ecosystem push? And then you mentioned Okay,
Speaker 2: eventually a company gets to a point, it reads some
Speaker 2: threshold in which like it is no longer really able
Speaker 2: to operate as like a private entity that pursue shareholder value.
Speaker 4: Is its mission? What's the second after all this excitement,
Speaker 4: Like where does it go?
Speaker 1: Yeah?
Speaker 5: So, I mean, I will say a lot of the
Speaker 5: startups were kind of familiar. There was sort of like
Speaker 5: verse of things that we'd be familiar with West. So
Speaker 5: there's the Amazon of Iran called Digikala. There's the Uber
Speaker 5: of Iran called snap. There's food delivery apps, there's all
Speaker 5: sorts of things. There's also things that are kind of
Speaker 5: more unique, but those the most successful companies, the ones
Speaker 5: that kind of right out the gate, are the ones
Speaker 5: that are sort of taking business models that have been
Speaker 5: tried and true in the rest of the world and
Speaker 5: localizing them for Iran. So you know, they start to
Speaker 5: really grow. And this kind of takes everyone by surprise,
Speaker 5: including the government. I think, you know, from interviews I've done,
Speaker 5: it seemed like the government really sort of thought this
Speaker 5: stuff was sort of whatever, you know, like okay, I
Speaker 5: think they didn't quite realize how quickly this field would grow.
Speaker 5: And our character that we kind of follow in the
Speaker 5: book starts his own venture capital fund, first with domestic
Speaker 5: funding and then brings in a lot of external funding
Speaker 5: as well from Europe and Russian investors. This sort of,
Speaker 5: I think takes a lot of the conservative, kind of
Speaker 5: established forces by surprise, and what we very quickly see
Speaker 5: is a backlash. And first it kind of takes the
Speaker 5: form of sort of hidden kind of whispers. There's like
Speaker 5: a mysterious telegram channel that forms that starts making accusations
Speaker 5: against some of the startup founders and you know, sort
Speaker 5: of people around that sector. The startups are very much associated.
Speaker 5: In some cases, they did not mean to be, but
Speaker 5: in some case they did sort of form an alliance.
Speaker 5: They're associated with the elected government of Hassan Rohaney, and
Speaker 5: you know, there were already these factions kind of developing
Speaker 5: that were very against Rohaney, particularly in the Revolutionary Guards,
Speaker 5: and sort of saw him and his diplomats as being
Speaker 5: too conciliatory towards the US. So this backlash from the
Speaker 5: security state is kind of forming. People are being interrogated,
Speaker 5: they're being you know, sometimes arrested, even their offices are
Speaker 5: being raided. And at the same time, what we document
Speaker 5: is that people kind of middlemen with a foot in
Speaker 5: the security state and a foot in the private sector,
Speaker 5: people who had been you know, Ministry of Defense officials
Speaker 5: or who had served on the boards of some of
Speaker 5: these bunyards, et cetera. They start to make an offer
Speaker 5: to some of the startups, and basically the offer is
Speaker 5: give us like five percent of your shares and we
Speaker 5: will help protect you from these accusations and from the
Speaker 5: risks that you're facing. And some of the startup founders
Speaker 5: take that deal. You know, we really try to get
Speaker 5: into their mindset, and we interviewed over seventy people for
Speaker 5: this section of the book, and I think they some
Speaker 5: of them didn't understand really what was happening. They felt beleaguered,
Speaker 5: and they felt quite at risk, and they wanted to
Speaker 5: save their companies. They wanted to do what they felt
Speaker 5: like was good work, employing people, providing middle class jobs,
Speaker 5: and so some of them took that deal. And we see,
Speaker 5: for instance, the uber overron Snap sold a large portion
Speaker 5: of shares to one of the Bunyards. There's another kind
Speaker 5: of ride share company that launches with a revolutionary guard financing,
Speaker 5: and then ultimately just a couple of years ago, we
Speaker 5: sort of trace the specifics of this and how much
Speaker 5: the company tried to resist. But ultimately the Amazon of
Speaker 5: Iran dig Youkla did sell forty percent of its shares
Speaker 5: to a telecom that is part owned by one of
Speaker 5: these Bonnons as well. So we really kind of see
Speaker 5: this exciting, vibrant, thriving industry that was not deeply connected
Speaker 5: to the government. Over time then kind of is subdued
Speaker 5: by those government forces.
Speaker 2: By the way, Tracy, I just found this very interesting
Speaker 2: article from twenty twenty that company Snap in order to
Speaker 2: get onto the there's a story from rest of world.
Speaker 2: They got on the Apple App Store by disguising the
Speaker 2: app as a music streaming app, and then only upon
Speaker 2: a user logging in with an Iranian IP address what
Speaker 2: its full capabilities does a ride hailing app merge And
Speaker 2: then I guess Apple has since banned that. But some
Speaker 2: clever ingenuity.
Speaker 3: There, Yeah, very smart. So one thing I'm wondering is,
Speaker 3: at the time of this tech boom, such as it was,
Speaker 3: there were some Iranian officials that seemed to be supportive
Speaker 3: of it. I can't remember his exact name, but there
Speaker 3: was someone in the ministry who was like actually actively
Speaker 3: promoting tech at the same time that you had other
Speaker 3: actors in the government who are starting like disinformation campaigns
Speaker 3: to smear these companies and making you know, not so
Speaker 3: subtle threats and things like that. Again, I'm fascinated by
Speaker 3: the coordination problem or lack of coordination here, because it
Speaker 3: really seems like people are like off doing different things.
Speaker 3: And if you're a business owner, how are you supposed
Speaker 3: to respond to all these competing interests. Yeah, it's not
Speaker 3: a question, I guess it's a statement.
Speaker 5: I can add a little as this. I think that
Speaker 5: that is the huge challenge that made like Iran's not just,
Speaker 5: for instance, a corrupt state or just an authoritarian state.
Speaker 5: It's also sort of chaotic, and I think that is
Speaker 5: what is poisonous to business, almost more than any other
Speaker 5: part of it. You know, I'm not a China expert,
Speaker 5: but my sense is that you know, when it comes
Speaker 5: to China, if you have an understanding with the Communist Party,
Speaker 5: then you're good to go. In Iran, even if you
Speaker 5: do end up making a deal with you know, some
Speaker 5: bone yard selling your shares, whatever it might be. It's
Speaker 5: it's a mafia structure, but there's also all these underbosses
Speaker 5: and they all kind of compete with each other, and
Speaker 5: their power sways from day to day. So yes, one
Speaker 5: entity within the government was really supporting these startups and
Speaker 5: wanted them to succeed, and his administration was sort of
Speaker 5: hated by the more powerful security forces. So for the
Speaker 5: startup guys, a lot of whom were coming, you know,
Speaker 5: they were expats, they were kind of coming back to Iran,
Speaker 5: they were bewildered by this. And as you both know,
Speaker 5: I mean, business requires certainty and that has been I
Speaker 5: think more detrimental the uncertainty and around the instability of
Speaker 5: the actual government structure and figuring out what it wants
Speaker 5: from day to day. That's been more poisonous almost than
Speaker 5: the actual fact of like, Okay, I got to make
Speaker 5: a deal with like such and such entity and you know,
Speaker 5: be able to continue my work safely.
Speaker 6: You know. The closest comparison that comes to my mind
Speaker 6: is like Greek mythology and reading, and I realized that
Speaker 6: Zeus doesn't have the absolute power, so you'rean supreme leader,
Speaker 6: didn't have the absolute power he needs to manage between
Speaker 6: all different gods and goddesses. And in the case of
Speaker 6: this year, as you see that he is supported by
Speaker 6: some gods to go back home, but some angry gods
Speaker 6: are trying to block his return to back home. So yeah,
Speaker 6: I think a businessman in Iran is just like it's
Speaker 6: a real odyssey.
Speaker 2: I love this analogy because it's like, what was the
Speaker 2: breakthrough of monotheism? Was it part to solve this problem
Speaker 2: of different people petitioning different gods, et cetera. Do you
Speaker 2: want to like establish another's like one set of rules?
Speaker 2: So I think that, But also so that sort of
Speaker 2: actually brings me to another question which came up a
Speaker 2: little bit earlier. But you know, when we talk about
Speaker 2: some of these things, we can draw these analogies. There's
Speaker 2: maybe comparisons to late Soviet Union. There may be comparisons
Speaker 2: to the oligarchs extracting the resources after the collapse of
Speaker 2: the Soviet Union. There may be analogies to a country
Speaker 2: like Venezuela, which of course people have also likened to
Speaker 2: a mabvious date, their analogies to China. With the difference
Speaker 2: between the CCP and the government itself. The thing that
Speaker 2: feels a little distinct here is the role of religion,
Speaker 2: which you meant, and the idea that there's maybe this
Speaker 2: other higher thing that people are told to strive towards.
Speaker 4: Can you talk a.
Speaker 2: Little bit more about, like teasing out the effect that
Speaker 2: that sort of like spiritual element plays in some of this,
Speaker 2: which I could imagine a creates yet another difficult dimension
Speaker 2: for businesses to operate in.
Speaker 4: But then also when I.
Speaker 2: Especially when I think the tech sector, like tech pries
Speaker 2: people's brains, and if I wanted to have a more
Speaker 2: spiritual society, I don't know how much I want the
Speaker 2: public to look at their phones all day.
Speaker 6: Yeah, I think that's a good point, because I think
Speaker 6: that's been one of the core problems when Western societies
Speaker 6: have been trying to tackle the Islamic Republic. Look, Obama
Speaker 6: tried to have a nuclear deal with ir Own, and
Speaker 6: Trump is trying to do that. I think one of
Speaker 6: the reasons that the US and many Western countries tried
Speaker 6: to do that was their deep belief in market, free
Speaker 6: market economy and capitalism. I think the underlying assumption was
Speaker 6: that given a choice between isolations and sanctions and prosperity,
Speaker 6: of course every country will choose the latter. Like in
Speaker 6: a way, they believe that by integrating the Ringian economy
Speaker 6: into the world, they will create some political liberalization and
Speaker 6: form of democratization. But I think I mean Trump also
Speaker 6: believes that. If you look at Trump's speeches in twenty
Speaker 6: and twenty five, it says, oh, I want to make
Speaker 6: Iran a great nation. We want I see a bright
Speaker 6: future for the country. But you see, surprisingly that Iran
Speaker 6: doesn't take that offer. The Islamic Republic. I think that's
Speaker 6: when this ideological component comes in that is somehow difficult
Speaker 6: to explain for the Western societies that you see that
Speaker 6: the country is much focused on the ideological aspects of it.
Speaker 6: And even after the nuclear deal that Obama managed to
Speaker 6: sign in twenty and fifteen and the lifting of sanctions
Speaker 6: in twenty and sixteen. The money that came to Iran,
Speaker 6: the incentives that the Western societies offered, it was meant
Speaker 6: on military development. So the Ranian state has different priorities
Speaker 6: when it comes to development. They prefer to put the
Speaker 6: money on military developments rather than on tackling unemployment, inflation
Speaker 6: and things like that. So that's been the challenge, and
Speaker 6: I think the challenge exists at the moment as well.
Speaker 6: Like now the deal, the MoU that was signed between
Speaker 6: Trump and the Islamic Republic, they offered billions of dollars,
Speaker 6: even hundreds of billions of dollars, but it seems that
Speaker 6: some elements, some hardline elements within the Islamic Republic, they
Speaker 6: didn't want that.
Speaker 2: Tracy, I think from the perspective of the West, most people,
Speaker 2: they are, being honest, cannot believe that some people aren't
Speaker 2: just motivated by money, like they hear like people say, oh,
Speaker 2: we believe in some higher power or some vision, but
Speaker 2: I think like deep down we all believe that everyone
Speaker 2: has a price and that everyone actually just wants Like no,
Speaker 2: they're really they're saying this, but what they really want
Speaker 2: is wealth. And so I do think like there's this
Speaker 2: disconnect when we encounter when we have relationships with people
Speaker 2: who actually may believe in something that is not just
Speaker 2: accumulating wealth and comfort.
Speaker 3: Some people in the West.
Speaker 4: I think most people in the West.
Speaker 3: Well, okay, but on this note, what is Iran's political economy?
Speaker 3: You know, the story we just heard about chaos and
Speaker 3: competing factions and all of that suggest for the future
Speaker 3: of the Iran US conflict.
Speaker 5: I mean this, we see this right now, right there's
Speaker 5: multiple factions inside Iran. There's kind of this hardline faction
Speaker 5: that is really harshly attacking the presidents and the Foreign
Speaker 5: minister for even having the temerity to sort of negotiate
Speaker 5: this memorandum of understanding. There are people who kind of
Speaker 5: still want inside Iran for this war to continue because
Speaker 5: they really believe that Iran kind of had the US
Speaker 5: on the back foot. And so I think in terms
Speaker 5: of like how Iran's political economy looks going forward, I
Speaker 5: think it's still quite early to say at this point,
Speaker 5: just because they're still sort of in the midst of
Speaker 5: this war really, and I think no one in around
Speaker 5: right now is looking that far ahead. To the extent
Speaker 5: that they are, it's very much towards China as the future.
Speaker 5: Mohammed Bulger klibof the Speaker of Parliament, the guy who's
Speaker 5: been kind of negotiating with JD Vance, he basically said
Speaker 5: that as well. He said that, you know, we want investment,
Speaker 5: but they want it from China.
Speaker 6: Yeah. I agree. I think one thing that I want
Speaker 6: to add is that again the different nature of these states,
Speaker 6: like Trump is fighting at best for his legacy, but
Speaker 6: the Islamic Republic is fighting for its survival. I think
Speaker 6: that creates different pain tolerance and pain thresholds among these
Speaker 6: two nations. For the US administration, the main problem is
Speaker 6: now if the FED would increase the interest rate by
Speaker 6: ego point twenty five percent, and the impacts of that
Speaker 6: on mortgage rates and other things. And of course people
Speaker 6: are unhappy with the rise of gasoline prices by a
Speaker 6: dollar or so. But when you look at the Islamic Republic,
Speaker 6: you see that the inflation is almost three figures, they're
Speaker 6: not that much affected by that. The unemployment rate is
Speaker 6: very high. I think when you compare the casualties for
Speaker 6: the US administration, the death of eighteen soldiers is a lot,
Speaker 6: is significant, while for the Islamic Republic, the killing, the
Speaker 6: death of hundreds or thousands of soldiers is something that
Speaker 6: can easily absorb. So I think that is the nature
Speaker 6: of the conflict that at this stage, and I think
Speaker 6: the reason is that the Islamic Republic has survived the
Speaker 6: war so far is that its pain threshold is much higher,
Speaker 6: and I think if it continues like that, I think
Speaker 6: the US administration I don't think they will continue the
Speaker 6: war because of the long term impacts it will have
Speaker 6: on the economy. Of course, Trump is trying to keep
Speaker 6: the price of oil under one hundred dollars per barrel.
Speaker 6: Anytime that it touches one hundred, there is some talks
Speaker 6: for negotiations and some positive through social posts. But I
Speaker 6: think they can manage to do that for a bit,
Speaker 6: but I don't think it can continue for a long time.
Speaker 5: I think the pattern that we saw kind of throughout
Speaker 5: reporting this book and that we really see now is
Speaker 5: that for the Islamic Republic, the economy has never been
Speaker 5: an end goal in and of itself. It's focused on
Speaker 5: it to the extent that it's a means to a
Speaker 5: broader end goal of self sufficiency or you know, some
Speaker 5: kind of like drawing some sort of ideological strength from it,
Speaker 5: but in terms of actually focusing on the economy at
Speaker 5: the expense of, for instance, some of its ideological goals
Speaker 5: that has ever been in its patterner of behavior. And
Speaker 5: there are former officials like, don't you know have to
Speaker 5: take it from us. There are former officials who have said,
Speaker 5: you know, it's time to set aside our ideology and
Speaker 5: our foreign policy and focus on the economy, which would
Speaker 5: mean bringing in foreign investment, which would mean coming to
Speaker 5: some final accord with the US that would really lift
Speaker 5: sanctions that we can actually move on and grow the economy.
Speaker 5: And whoever's been in power at any point, mostly any
Speaker 5: commony for thirty seven years, but before that, Holmania, of course,
Speaker 5: has not taken that bet. For them, the important thing
Speaker 5: has always been around's ideology. And I think unless there's
Speaker 5: some drastic change, I don't necessarily expect that to change.
Speaker 5: I would need to see a lot more evidence of
Speaker 5: that actually, you know, shifting before I would kind of
Speaker 5: change my assessment on that.
Speaker 2: All right, Jegen and Portosog, thank you both so much
Speaker 2: for coming on the podcast. Absolutely fascinating discussion. Yeah, really
Speaker 2: appreciate you taking your time.
Speaker 6: Thank you I reading Jake.
Speaker 5: Thank you both so much.
Speaker 4: Tracy. I really enjoyed that conversation. I learned a lot.
Speaker 2: I really did mean what I said in the conversation,
Speaker 2: which is that I do think a lot of American
Speaker 2: or Western like negotiators and thinkers just sort of like
Speaker 2: constitutionally find it hard to believe that people in much
Speaker 2: of the world actually believe in things and aren't just
Speaker 2: like going to be transactional at the.
Speaker 4: End of the day.
Speaker 3: That's why my first question was about how much of
Speaker 3: the Ranian Revolution was driven by economic interests versus actual geology.
Speaker 3: But yeah, I totally take the point. I also thought
Speaker 3: it was interesting. You know, when we think about emerging markets,
Speaker 3: there's plenty of investment that goes into emerging markets, right,
Speaker 3: but it feels like the stability point definitely stands out.
Speaker 3: You know, you can invest in an authoritarian regime totally
Speaker 3: if you know you're bribing the right person and you're
Speaker 3: not going to have all your assets seized in like
Speaker 3: two weeks or something by a competing faction. But when
Speaker 3: it comes to Iran, it does seem that factional element
Speaker 3: that chaos, as they described it, has been an issue.
Speaker 4: Yeah.
Speaker 2: I thought the point about the sort of like you know,
Speaker 2: in China, there's the Chinese government and then there's the party, right,
Speaker 2: and they're not the same thing, but they're closely linked.
Speaker 4: But the idea that like, okay, what if you have like.
Speaker 2: A more multiplayer element where it's like, okay, you have
Speaker 2: some entities that are like truly like this is the state,
Speaker 2: and there are state interests, and then you have irgc interests,
Speaker 2: and then you have religious interests, et cetera, and then
Speaker 2: you really do get this sort of like potential misalignment.
Speaker 4: I love the analogy of like the sort of.
Speaker 2: Like petitioning the various Greek gods is like a way
Speaker 2: to think about a sort of like problem of establishing
Speaker 2: that stability. It's almost like, okay, like a gangster state
Speaker 2: might not be the worst thing in the world if
Speaker 2: there were just one gang, right, but right if there's just.
Speaker 3: One producers clip that No.
Speaker 2: Yeah, like if there's just one gang. Now you think
Speaker 2: about like they think of like a mafia story, right,
Speaker 2: part of the problem it is like Okay, I'm gonna
Speaker 2: pay this this mafia. I don't really need the protection
Speaker 2: from my store. This this guy comes and said, I'll
Speaker 2: protect your store from damages for something insane a mile
Speaker 2: the thing. I don't need it, but whatever, we're gonna.
Speaker 4: Pay it, you know.
Speaker 2: But then the moment there's three gangs and each of
Speaker 2: them wants that cut, then it becomes like a seriously.
Speaker 3: And also they get mad at you for paying one
Speaker 3: of them. Yeah, So like I prayed at the temple
Speaker 3: of Zoos, and because I sacrifice to go to Zeus,
Speaker 3: Poseidon is now upset at me, and now I have
Speaker 3: to appease beside it. And then I'm going to appease Poseidon,
Speaker 3: and then I don't know, Aphrodity or whoever is going
Speaker 3: to get mad, which just goes on and on.
Speaker 2: Right, if your only issue was the sacrifice that Zoos demanded,
Speaker 2: you might not like it, but you could form a
Speaker 2: business with those expectations, and that would probably be you
Speaker 2: find a way to serve. But then you have this
Speaker 2: multi level thing and you can't form that expectation.
Speaker 3: Did I ever tell you about in Tokyo a friend
Speaker 3: of mine had a bar, tiny bar, ten seats at
Speaker 3: the bar, and he got extorted by the yakuza. Really yeah,
Speaker 3: And so what happened is there were only ten seats
Speaker 3: at the bar. He noticed. First of all, he got
Speaker 3: a request for money for protection money from the yakuza,
Speaker 3: and he said, no, I'm not going to pay it.
Speaker 3: I'm a foreigner. I don't have to blah blah blah.
Speaker 3: Next night, a single Japanese man comes into the bar,
Speaker 3: orders one beer, sits at the bar all night, taking
Speaker 3: up that seat. Not a big deal, plenty of other
Speaker 3: people around. Next night, two people come in. Two Japanese
Speaker 3: salary men, sit there, order one beer, don't leave the
Speaker 3: entire night. You can see where this is going. Within
Speaker 3: ten days, all of his seats were being taken up
Speaker 3: by single customers ordering single beers. And it didn't happen
Speaker 3: anymore after that. So, you know, I will say.
Speaker 4: For how the problem was avoided.
Speaker 3: Yeah, forward exactly.
Speaker 4: That's a good story. Anyway. I'm really glad we did
Speaker 4: that episode. I learned quite a bit.
Speaker 3: Absolutely. All right, shall we leave it there, Let's leave
Speaker 3: it there. This has been another episode of the oud
Speaker 3: Loots podcast. I'm Tracy Alloway. You can follow me at
Speaker 3: Tracy Alloway.
Speaker 4: And I'm Jill Wisenthal.
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