Nuclear talks and leaks detract from Iran's real issues

The focus has shifted from Iran¿s economy and the domestic woes, which is not only due to recent sanctions but also long-overdue subsidy reforms that have not yet been implemented.

Disappointment coloured the end of the much-anticipated P5+1 talks this week, with Iran and its EU interlocutors walking away from the negotiating table with little more than a promise to meet again in January.

Many believe that both sides are simply buying time; Iran is attempting to raise the stakes and the US certain that the war of attrition its sanctions programme is waging will ultimately have the effect of destabilising the Iranian regime.

It is quite possible that both sides are correct in their calculations. But how their moves will play out on the wider stage without taking a much closer look at the internal situation in Iran misses important opportunities.

These meetings may provide the crack that is needed in the long road to begin re-building trust between Iran and much of the rest of the world. But we should not hold our collective breath, as both the US and Iran have proven quite adept at missing each other's signals in recent years.

Logically, however, it is very clear that Iran, and the administration of President Mahmoud Ahmadinejad in particular, would benefit greatly from a deal on the nuclear issue. The P5+1, which is composed of China, France, Russia , the UK, the US and Germany, should seek to strike a deal on this matter and not search for passive aggressive ways in which to raise antagonism, which appears to be the Obama administration's strategy for dealing with Iran: "kill them with kindness", as many Americans say.

Indeed, US policy toward Iran is beginning to be viewed by average Iranians as not only extremely hypocritical and duplicitous - adjectives some Iranians might use to describe their own rulers - but also not so subtly hostile.

If anything, the effects inside Iran of the Wikileaks scandal have served to strengthen a longstanding Iranian narrative of victimisation. Although there was nothing overtly new or revealing about the leaked cables in relation to Iran, they provided a satisfying reminder to proponents of the Islamic Republic that everyone is "out to get them". They also provided evidence that, at least as far as the Iranian leadership is concerned, American officials ultimately believe diplomacy with Iran will fail.

The day after the cables were made public, Mr Ahmadinejad held his first press conference in many months. He offered a good blueprint of what is on the horizon for Iran, and given the myriad challenges he is currently facing, it should not be the least bit surprising that he did not really want to discuss the Wikileaks scandal.

In a session with reporters, broadcast live on Iranian state television, Mr Ahmadinejad faced a barrage of questions that underscored the growing number of national crises all seemingly coming to a head at once. He was asked several times about the cables and was very clear on his public position on them. "They're so worthless," he told the gathering. "I don't even want to waste time talking about them."

When international reporters pressed the subject, the Iranian president revealed that he believed them to be a US plot, adding: "The US administration released them and based on them they pass judgment …. [The documents] have no legal value and will not have the political effect they seek."

He was also asked about two Iranian nuclear scientists who were attacked on their way to work - one of whom was killed. The president used the opportunity to blame "foreign powers" again. According to Mr Ahmadinejad: "One can undoubtedly see the hands of the Zionist regime and western governments in the assassination which unfortunately took place today."

The most repeated line of questioning, though, came from the domestic reporters about Iran's economic woes, and this is really where the focus should be. Iran's economy is in trouble, and this is not only due to recent sanctions, although those surely exacerbate the problem. Long-overdue subsidy reforms that cost the Iranian system an estimated $100 billion annually have not yet been implemented, as no one is sure what the impact and public response will be.

Particularly under scrutiny is the plan to lift the subsidy on gasoline, which makes driving affordable for most Iranians. This in turn has created an entire line of work for those with motor vehicles operating as either impromptu taxi or delivery drivers. If cheap gasoline is no longer available, it is unclear what these people will do for work.

Mr Ahmadinejad's answers satisfied very few in the crowd. At one point, he simply reasoned that: "When they [the US] say they have isolated Iran, it means that they themselves are isolated, and when they say Iran is economically weak, it means that it has been strengthened."

Adding to his problems, Tehran and other major cities are facing an environmental crisis, with air pollution over the past month at such dangerously high levels that holidays have been called on multiple occasions, which has cost the Iranian economy hundreds of millions of dollars in lost revenue.

Reza Marashi, the research director at the National Iranian American Council, takes it one step further stating that "the longer he's [Ahmadinejad] been in office, the more urgent his need for a 'win' has become. With consistent and growing problems at home, he's turned his attention to the foreign policy 'win' that most Iranian politicians seek above all else: delivering better relations with the US."

With all of this at play, and both the American and Iranian leadership desperately needing to save face among their own publics, the table seems set for some sort of positive breakthrough. But that can only happen if both sides recognise each other's vulnerability and agree that exploiting political weaknesses for short-term gain is in no one's best interest.

Jason Rezaian is a freelance writer based in Tehran.