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What lies ahead for Iran and its new president

MARY LOUISE KELLY, HOST:

As we say farewell and good riddance to 2021, we have been marking some of the big stories of this year and considering where they may be headed in 2022, stories here in the U.S. and beyond our borders - in Russia, in China, elsewhere on the show today in Afghanistan. But we begin today with Iran, one of the most important and most difficult foreign relationships for the U.S. As we speak, talks are restarting aimed at reviving the nuclear deal that the Trump administration abandoned. That deal put limits on Iran's nuclear program in return for letting it do business with the world, and how this is settled will be crucial to how Iran and its new president relate to the West. NPR's Peter Kenyon joins me from Istanbul. Hey, Peter.

PETER KENYON, BYLINE: Hi, Mary Louise.

KELLY: Start with these newest round of nuclear talks. Where do things stand?

KENYON: Well, the Vienna talks had a big break some five months, and then they started up again earlier this month. And from the West's point of view, the goal is to get the U.S. back into the 2015 deal and ensure that both sides are in full compliance. That's increasingly important because Iran's so-called breakout time, the time it would need to get enough nuclear fuel for one nuclear weapon, has dropped from around a year to just a matter of weeks. For Iran, the overriding goal is to get the U.S. sanctions lifted. Those are the sanctions former President Donald Trump imposed in 2018 after he pulled America out of the deal. The Iranian economy has been suffering ever since. And it may sound like these goals shouldn't be that difficult to achieve. They align in a certain way. But the going has not been smooth.

KELLY: No. Things got less smooth after Iran elected a new president, Ebrahim Raisi, back in June. How's he doing? What challenges does he face?

KENYON: Well, the biggest challenge, obviously, is improving the economy. It was part of what he ran on earlier this year. I mean, Iranians are facing inflation 50% above last year's already terrible inflation. Food was 60% higher than a year ago. That's not completely due to sanctions. Corruption and mismanagement are also frequently mentioned. But Raisi has to improve living conditions for more of the population. I talked with analyst Sanam Vakil at Chatham House, a think tank. And she said improving the economy is by far the biggest challenge facing Raisi's government, not least because it's the Iranian middle class that's suffering so badly.

SANAM VAKIL: I believe the statistic is about 26 million Iranians are in absolute poverty, and so there has been a decline or a shift from the middle class into that bracket. So it's the middle class that's predominantly suffering.

KENYON: And a huge chunk of the population. And, of course, Iran isn't immune from the restrictions and problems many countries are facing with the COVID-19 pandemic.

KELLY: Yeah. How are they doing with the pandemic, by the way? - because people may recall Iran was really hard-hit right at the very beginning.

KENYON: Yes, the cases are down significantly. Really, that's been the one heartwarming thing checking the Iranian news every day - that the cases are definitely well down.

KELLY: Well, talk to me more about ordinary Iranians. You spoke a little bit about the economy, but I'm curious how they see their country, how they see their government. A couple of years ago, we saw those huge anti-government protests in Iran. What's the latest there?

KENYON: Well, those 2019 protests were, of course, met with a fierce crackdown by security forces. Just last month, Amnesty International was publishing details on 324 deaths from that crackdown and said the real number is probably higher. There are still protests. The state-run Fars News Agency was reporting on Isfahan protests just a few weeks ago. But the Raisi government is seen as being more than ready and willing to crush dissent.

KELLY: And what about outside its borders? I mean, beyond the nuclear issue, another thing of great concern to officials here in the U.S. is Iran's activity around its neighborhood. Bring us up to speed on Iran's involvement in the countries around it.

KENYON: Well, where to start? Hezbollah in Lebanon, Hamas in Gaza, the Houthi rebels in Yemen, militias in Syria - Tehran is very busy through its proxies. President Biden has spoke of trying to deal with this. One reason to get back into the nuclear deal, he says, is to get more negotiations going with Iran on things like its ballistic missile program and those proxies in the region. Tehran has said it has no intention of negotiating about its conventional weapons while its scientists are being killed and its facilities sabotaged. Tehran says that Israel's doing with or without U.S. help.

KELLY: So where does that leave the U.S., and what does your reporting tell you about what the U.S. approach will be in 2022?

KENYON: Well, the comment that's getting the most attention is that Washington is still pursuing diplomatic means, but time is running out. And they are prepared to turn to - it hasn't exactly been spelled out what Washington is contemplating, but military options have not been ruled out.

KELLY: NPR's Peter Kenyon updating us from his perch in Istanbul. Thank you, Peter.

KENYON: Thanks, Mary Louise. Transcript provided by NPR, Copyright NPR.

Peter Kenyon is NPR's international correspondent based in Istanbul, Turkey.