Iran Challenges Isolation Imposed by Sanctions at Meeting

Iran is using a summit of non- aligned nations as a platform to challenge U.S. and European attempts to isolate the Islamic Republic over its nuclear program, looking to build support among a largely sympathetic bloc of countries as it contends with sanctions.

United Nations Secretary-General Ban Ki-Moon, Indian Prime Minister Manmohan Singh and Egyptian President Mohamed Mursi are among the leaders attending tomorrow’s two-day conference of the Non-Aligned Movement in Tehran. Iran will assume leadership of the 120-nation group created during the Cold War through 2015.

“It is simplistic to say that because a coalition of the willing has sanctions against Iran, that Iran is isolated,” said Richard Dalton, the U.K.’s former ambassador to Iran who is a policy adviser at London’s Chatham House. “There are tough measures in force, but they don’t require the withdrawal of diplomatic recognition or other forms of trade.”

The U.S. and Israel had urged Ban not to attend the conference in an attempt to maintain Iran’s isolation. The U.S. and the European Union have gone beyond four sets of UN sanctions intended to stop the Persian Gulf nation’s nuclear work. EU nations embargoed Iranian oil imports in July. Prosecutors are targeting institutions worldwide that use the U.S. financial system to process Iranian transactions.

Kings, Presidents

The U.S. and its allies accuse Iran of trying to build atomic weapons. The country, the subject of a decade-long UN investigation, insists it only wants nuclear power for energy and the medical industry.

Ban, who last week criticized Iran’s Supreme Leader Ayatollah Ali Khamenei and President Mahmoud Ahmadinejad over threats to Israel, is joining 24 presidents, 8 prime ministers, 50 foreign ministers and 3 kings at the NAM conference, Iranian Foreign Ministry spokesman Ramin Mehmanparast said today. Ban will give a speech to delegates tomorrow and will meet with Khamenei and Ahmadinejad Press, TV reported yesterday, citing a UN spokesman. He met with Iran’s parliamentary speaker, Ali Larijani, this morning.

Iran is using the summit to burnish Tehran’s image. The government mandated a week-long holiday for the city of 8.4 million to make room for the 7,000 delegates attending the event. The streets of the capital have been cleaned in anticipation of the $50 million delegates are expected to spend.

Tours, Visits

Hosting the summit will help Iran reduce its global isolation and bypass sanctions, the state-run Mehr news agency reported on Aug. 23, citing Industries, Mines and Commerce Minister Mehdi Ghazanfari, who said: “The ministry will offer tours of various industrial centers to the attendees to present Iran’s economic, industrial and mining potential.”

Iran has invited delegates to visit its nuclear installations upon request, the country’s International Atomic Energy Agency envoy Ali Asghar Soltanieh told journalists yesterday in Tehran. He reiterated that Iran won’t observe UN Security Council resolutions ordering it to suspend its uranium- enrichment work.

Iran’s rial, linked to the U.S. dollar, plunged earlier this month after the country said it would review its official exchange rate. Iranian inflation has quickened while the economy has come under strain from the sanctions, and oil exports have dropped. Prices of meat, rice and bread have spiraled as the rial lost a third of its value against the dollar on the open market since November.

Deflecting Attention

“The Iranian regime is hoping to capitalize on the international conference there, to try to distract attention from just how isolated they are from the broader international community, stemming directly from their failure to live up to their international obligations when it comes to their nuclear program,” White House spokesman Josh Earnest said on Aug. 22.

NAM is the world’s biggest bloc of politically non-aligned nations.

Israeli Prime Minister Benjamin Netanyahu told U.S. Defense Secretary Leon Panetta on Aug. 1 that time “is running out” for a peaceful solution to Iran’s atomic program. Israel is considering bombing the nuclear facilities before Nov. 6 U.S. elections, Tel Aviv-based Haaretz newspaper said Aug. 10.

‘Freebie PR Coup’

“Netanyahu gave Iran a freebie public-relations coup by making an issue out of Ban’s visit,” Trita Parsi, president of the Chicago-based National Iranian-American Council, wrote in an e-mailed reply to questions. “Iran has now been given a much greater boost from Ban’s visit than it otherwise would have.”

Under a law enacted Dec. 31 in Washington, institutions in nations that don’t win exemptions may be cut off from the U.S. financial system if they settle oil trades with Iran’s central bank. The EU banned the purchase and insurance of Iranian oil from July 1. About 95 percent of the world’s tankers were insured by companies following EU law before the embargo.

Iran, the third-largest supplier in the Organization of Petroleum Exporting Countries, is pumping less crude than Iraq for the first time in 20 years, OPEC said Aug. 9 in a monthly report. Oil exports to Asian nations including China, Japan and India are set to climb 19 percent in August as governments insure tankers carrying the crude to replace coverage blocked by EU sanctions, according to vessel-tracking data.

Non-oil trade between Iran and other members of the Non- Aligned Movement fell 1.8 percent to $43 billion in the year ending March 19, the Iranian Students News Agency reported Aug. 22, citing customs data. That accounted for 40 percent of Iran’s $105 billion in non-oil trade in the same period.

NAM Statement

The summit will produce a document with 701 articles that tackle international, regional, economic and human-rights issues, Mehmanparast said yesterday at a briefing. It would be “unrealistic” for all 120 nations to agree on a common approach to the sanctions Iran faces over its nuclear work or the Syrian uprising, he said.

“The success of the conference should not be judged by the number and status of the participants, but by its final statement,” said Ali Vaez, senior Iran analyst at the Brussels- based International Crisis Group.

“If the statement strongly condemns the sanctions against Iran and confirms Iran’s stance on the Syrian imbroglio, then it can be assumed that Iran has successfully advanced its agenda,” he wrote in an e-mailed response to questions. “Iran’s gains would be uncertain, if the summit ends with another platitudinous boilerplate.”

To contact the reporters on this story: Jonathan Tirone in Vienna at jtirone@bloomberg.net; Yeganeh Salehi in Tehran at yalehi@bloomberg.net

To contact the editors responsible for this story: James Hertling at jhertling@bloomberg.net; Andrew J. Barden at barden@bloomberg.net

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