Iran: Pandemic Powered Poverty


May 5, 2020: Iran is in bad shape. Popular outrage against the government for all the economic problems, growing corruption and mishandling of the covid19 virus pandemic is not diminishing. The economy is a mess and the government is so broke that it is doing things it always insisted it would never do. For example, state owned companies are being privatized via the local stock market. There is some popular enthusiasm for this, but also apprehension because the government has enough control over the economy to continue deciding what the privatized companies can do and with whom. This makes it difficult for the privatized companies to succeed.

On a daily basis, most Iranians have to deal with the covid19 virus pandemic. Iran is hard hit by covid19, in part because the government initially dismissed the possibility of the virus posing a serious threat. Compounding that the government deliberately releases false data about nationwide covid19 infections. Officially Iran has had 1,174 confirmed cases per million population and 75 deaths per million. The actual deaths are believed to be five times higher at about 400 per million and continuing to rise. This is not unlikely because some Western nations that report accurately have even higher death rates. Spain is 544 deaths per million while Italy is 481, Britain is 423 and France is 386. There are many Iranian expatriates in these European nations who maintain contacts with family and friends back in Iran, and that helps in exposing what is really going on with the virus inside Iran.

Neighbor Iraq has 58 cases per million and two dead per million. Iraqi medical experts know a lot of covid19 infections and deaths are going unreported and often unnoticed. The virus mainly kills the elderly and anyone with existing serious medical problems. Covid19 deaths are easily mistaken for pneumonia. Many prominent politicians, military commanders and religious leaders have died from the virus in Iran. Most Iranians see that as a good thing because for two years now there has been growing unrest against the government. At first Iranian leaders, especially the religious ones who control the government dismissed covid19 as something Allah was using to punish infidels (non-Moslems). That was incorrect and, when prominent religious leaders began dying from covid19, many Iranians saw this as a sign that the heavenly powers did not approve of what the religious dictatorship was doing. To make matters worse, neighboring nations were attributing their local covid19 outbreaks to visitors from Iran. Turkey, Iraq and Afghanistan have been most affected by this. Turkey and China have persuaded the Iranian government to be realistic about the covid19 problem. Despite that, the virus is still apparently out of control in Iran. China is apparently where Iran got covid19 because both China and Iran have tried to suppress discussion about how covid19 got into Iran via regular passenger and cargo flights from Wuhan, the center of the covid19 outbreak in China and worldwide.

Israel and all the other Moslem states in the region are cooperating when it comes to dealing with the covid19. The major exception is Iran and its subordinates Syria and southern Lebanon. Iran is where the virus hit first in mid-February and Iran has suffered the most from the virus. Iran got the virus first because China is a major trading partner and supplier of forbidden goods. Iranian religious leaders at first denied that the virus could hurt believers, especially Shia. That was incorrect and made the government even more unpopular. While Iran is unwilling to cooperate openly with Israel to deal with the virus, unofficially Iran will accept help from Israel but will not publicize that.

Iran was hurt more by covid19 than anyone else in the region because the country was already suffering economically from American sanctions, especially those that cut oil sales about 80 percent. The price of oil has also plummeted. In 2013 the price fell more than 50 percent because American fracking tech had turned the U.S. into a major oil and gas exporter once more. The economic recession brought on the covid19 pandemic and overproduction of oil led to the price per barrel falling below $20. In short Iranian oil, income is less than ten percent of what it had been. Corruption and mismanagement by the religious dictatorship, long a problem, has become worse in the last decade and contributes to the severe cash shortage Iran is experiencing. The final blow was the quarantines and trade restrictions inside Iran as a result of covid19. At the same time, there are increased nationwide public health costs to deal with the virus. The government has no cash surplus to use for helping out the increasingly impoverished population. This has made spending on foreign (Iraq, Syria, Lebanon, Yemen) wars even more unpopular.

Iraq and Syria

Iranian efforts to expand their control in Iraq and Syria are not producing the desired results. Worse, Iraq and Syrian involvement is causing more anti-government activity inside Iran. Despite the much reduced budget for operations in Syria and Iraq, the Iranian Quds Force officers in charge convinced their bosses back in Iran that more cash was needed Iraq and Syria to prevent the Iranian efforts there from collapsing. The cash has apparently come though because the Iranians have increased the pay and benefits for many of the mercenaries in Syria and local loyalists in Iraq. This increased Iranian activity is unpopular in both countries. In Syria, it has turned into a very costly (for Iran) war with Israel. In Iraq the opposition is local and it is growing. Iraqis want the Iranians to leave and the Americans to stay, mainly to keep the Iranians out. In Syria, Israeli airstrikes against Iranian facilities have increased. The attacks include local groups and Syrian government activities Iran backs. Given the extent of the damage over the past year, it is costing Iran a lot of money to replace the losses. In Iraq, the Americans are becoming equally active against Iranian assets.


Since mid-2019 the balance of combat power has shifted as the government coalition lost a lot of their ground troops. This was because the UAE (United Arab Emirates) withdrew most of its forces in late 2019 because of disagreements with Saudi Arabia over strategy and fears in the UAE that Iran might attack. The UAE has less population and fewer troops than Saudi Arabia. The UAE is also smaller and closer to Iran. The Saudis also lost troop contributions from other Moslem states and have not been able to replace them. This stalled the long, slow, methodical and successful government offensive which had pushed the rebels back. The rebels, encouraged by the steadfast and effective support from Iran, held on. The major weapon the Shia rebels have against Saudi Arabia  is Saudi fear of an Iran dominated Yemen..

The Saudis have many reasons to fear Iran. Historically the Iranians have always been more effective militarily and that factor is still present. While the Iranians have a tradition of recruiting the most capable men to be officers, the Saudis, and Arabs in general are wary of professional military personnel, especially officers. It’s mostly about fear of a military takeover and the Saudis have crippled their own military by valuing loyalty over competence when it comes to officers, and many troops as well. As a result, the Saudis do not have a lot of troops they can trust to do well in a foreign war. Air Force pilots are another matter but you cannot win a ground war from the air. On the ground, the lack of more talented and experienced ground commanders in Yemen has hurt the Saudis in ways they won’t admit.

The Saudis have a bigger problem with the fact that the rebels are backed by Iran which continues to pay whatever it takes to smuggle in some weapons despite Saudi efforts to tighten the sea, air and ground blockade. Yemen is unique in that it is a nation with a disproportionate number of skilled smugglers, many of them willing to work for whoever will pay.

This new situation puts Saudi Arabia in a difficult position. Efforts to negotiate an end of the Yemen war proved unsuccessful as Iranian control over the Shia rebels could not be reduced. The Iranians are determined to maintain their presence in Yemen and on the Saudi border. From there the Iranians can continue to launch attacks on the Saudis, who do not want to commit the ground forces necessary to take control of the adjacent Yemeni provinces that are the homeland of the Shia rebels. The Saudis also have to maintain sufficient forces in northeast Saudi Arabia, where most of the oil is and the Iranian threat has been a problem for decades. At this point, the best thing the Saudis can hope for is that the religious dictatorship that has ruled Iran for decades will collapse and be replaced by friendlier and less threatening rulers.

The Yemeni rebels continue getting some aid from Iran, but this must be smuggled in. Shia Iran also makes demands. So for over a year, the Shia rebels have been imposing more and more religious restrictions on people living under their control. This includes many Sunni tribes. The rebels have even been shutting down cafes and restaurants that cater to groups of women. These gatherings are considered un-Islamic by religious conservatives.

May 4, 2020: In Syria (outside Aleppo) an Israeli air strike hit research center where Syrians and Iranians were working on chemical weapons. Further east of Aleppo province, another Israeli air strike hit an ammo storage site, causing a large explosion.

In eastern Syria (Deir Ezzor province), an Israeli air strike hit the Mayadeen army base and the Iran-backed militia stationed there.

May 2, 2020: The government thought that the covid19 would eliminate, for the moment, the years of anti-government protests. That has not happened. Now the protests have fewer people and they are wearing masks and using more protests signs than before because it is harder to should through a surgical mask. The security forces are more reluctant to change in and break up the protests with “hands on” force.

Parliament passed the law that completes the 2019 decision to rename and revalue Iranian currency. Issuing new currency will deal with the enormous inflation and the bad reputation the rial has acquired. In Amid 2019 it cost 120,000 rials to buy a dollar, while that is currently 42,000 the currency change is still needed. The new currency, the toman, will make the current exchange rate 4.2 toman to the dollar. Over the next year the toman will be introduced and completely replaces the rial.

The toman was what some Iranian currency was called for a long time, until 1925. Many Iranians still use the term. At the end of 2018 the government began to reverse, the decline in the value of Iranian currency against foreign currencies. Using a combination of Central Bank spending more dollars to support the rial and the police driving a lot of black market currency exchange operations out of business, or suspending activities until the crackdown subsides. Shifting to the use of euros and pounds for foreign trade helped, and these other currencies became an acceptable substitute for the dollar.

Iran has been trying to ban the use of dollars inside Iran. Changing the currency is expensive but most Iranians appreciate it because the low value of the rial meant that people were carrying around a lot of paper currency just to handles daily transactions. The toman will solve that problem but for the moment, economic conditions for the average Iranian are still bad. Inflation is down but unemployment is still rising and closing in on 20 percent. The official unemployment rate is half that but the reality is visible everywhere with lots of people looking for work. International economists estimate that Iranian GDP will decline six percent in 2020. Foreign cash reserves will drop from $86 billion in 2019 to $70 billion, or less, by the end of 2020.

May 1, 2020: In central Syria (Homs province) an Israeli airstrike triggered large explosions at a Hezbollah ammo storage site. In southern Syria, on the Israeli border (Golan Heights) Israeli helicopters hit Iran-backed militia near the border.

April 30, 2020: The U.S. uncovered and disrupted a Quds Force smuggling effort that involved buying a second-hand 150,000 ton oil tanker. Once the tanker was controlled by Quds it could be used to smuggle oil to China, India or Syria. American sanctions officials charged several individuals and companies with complicity in buying the 22 year old tanker for $12 million. The Americans are attempting to seize the tanker and end its smuggling activities. Currently, the tanker is being detailed in Oman.

April 29, 2020: The U.S. has evidence that IRGC (Iranian Revolutionary Guard Corps) air transports were used over the last few weeks to fly about nine tons of gold from Venezuela to Iran The $500 million worth of gold, from Venezuela’s shrinking cash reserves, was payment for special chemicals Iran has been supplying to Venezuela so the tar-like Venezuelan crude oil can be refined into a salable product. In addition to the gold, Venezuela also provides Iran with a base for its South American smuggling and terrorism activities. The IRGC operates several commercial air transport companies and one now making daily flights to and from Venezuela is Mahan Air. The United States sees this as illegal activity by Iran and plans to half the Mahan Air flights.

April 24, 2020: Iran claims it succeeded, on its fourth attempt since 2010, to launch a satellite into a stable orbit. The Iranian confirmation comes two days after the satellite was launched. The Noor photo satellite is in a stable 450 kilometers high orbit but appears to be tumbling out of control. Unless Noor has thrusters that can be used to stabilize it the satellite is useless. Noor is actually quite small, weighing about 4 kg (9 pounds) and about half the size of a microwave oven. One success in all this was the use of the new Qased SLV (satellite launch vehicle) to get their satellite into orbit. Since 2010 there were three previous attempts, all failures and all using the Simorgh SLV. Both Qased and Simorgh are multi-stage rockets that can carry a satellite into orbit or a warhead to a distant target. The U.S. and Israel describe the Iranian SLV test as a cover for what is actually an effort to develop an ICBM (Intercontinental Ballistic Missile).

April 22, 2020: The U.S. Navy was ordered to fire on and destroy any Iranian speedboats that harassed American ships. Iran has long violated the generally accepted navigation rules that were developed to avoid collisions at sea. The Iranians make videos of all this nautical misbehavior and present it on Iranian TV as Iranian gunboats intimidating larger American warships. Russia and China have done this but using larger warships that could do some real damage if there were a collision. The Iranian IRGC small craft are built for coastal patrol and suicide attacks when carrying a hundred kg (220 pounds) or so of explosives. These small boats can also be used to locate targets form shore-based anti-ship missiles. These harassment attacks are not constant and tend to occur when Iran is having a hard time, as they are now in Iraq, Syria and Lebanon, and need some positive publicity as well as training for their suicide speedboat crews. Now the Americans have declared playtime is over and in the future, the U.S. ships will open fire. The IRGC has to decide if they will test this. Much would be lost of the Americans did actually fire on the boats. While Iran can afford to lose a few of these boats and declare a dozen or so men lost as martyrs, they cannot afford to lose the element of surprise. Until now the Iranians knew they could carry out of few successful suicide speed boat attacks because the Americans never opened fire. If that changes the Iranians have turned their speed boats into target practice rather than potential ship destroyers.

All this is another side effect of the problems are having with American troops inside Iraq. Ever since early January, when the Americans killed the commander of their Quds force and the head of the largest Iran-backed militia in Iraq, Iran has been on the defensive in Iraq. Efforts to strike back with ballistic missiles and unguided rockets have failed and anti-Iran sentiment in Iraq grows.

April 21, 2020: The 2020 World Press Freedom ratings were released showing Iran at 173rd place (out of 180 nations). This is largely because of the religious dictatorship effort to silence all criticism of corruption and expensive foreign wars that are very unpopular with most Iranians. While that was bad, some of the neighbors were worse. Iraq was 162, China 177 and Pakistan at 145. Some were better as in Afghanistan at 122, India at 142 and Burma 139. In contrast Britain was 35, France 34, United States 45, Canada 16 and Germany 11. Top five were Norway in first place followed by Finland, Denmark, Sweden and Netherlands. Bottom five were Djbouti, China, Eritrea, Turkmenistan and North Korea in last place. These rankings are mainly about professional journalists and play down the impact of the Internet and many non-professional, but often well qualified, individuals who are now supplying a lot of the news, especially accurate reports of what is actually happening. The conventional media, which employs most professional journalists, has lost more than half its staff in the last twenty years as more people prefer non-professional or semi-pro reporters on the Internet. Governments find it easier to restrict the professional journalists, leaving the Internet based reporters as the main source of accurate reporting in many countries, like Pakistan.

April 15, 2020: In western Syria, on the border with Lebanon an armed UAV, believed to be Israeli, destroyed a vehicle crossing the border illegally. Israel often targets lone vehicles in this area because intel has identified the people inside as Hezbollah, Iranian or Islamic terrorists trying to attack Israel.

April 11, 2020: In the east over 80,000 Afghan refugees have left for Afghanistan since March 1st, most of them because of the spread of the covid19 virus inside Iran. This exodus is believed to be the source of the few covid19 cases found so far in Afghanistan.

April 10, 2020: In the last three days, Iran has made it obvious that they have declared war on American forces in Iraq. Iran did this via revealing three new pro-Iran Iraqi militias. Usbat al Thairen, one of several new Iran-backed Iraqi militias announced its existence by releasing a quad-copter video of the Al Assad airbase in Anbar province. This is where U.S. troops have been stationed for five years. Another one of these militias, Ashab al Kahf, took credit for an April 8th attack on an American convoy. The convoy was traveling north from Baghdad to the Kurdish controlled north. A third Iranian militia, Qadbat al Huda, insisted that the U.S. was planning on attacking pro-Iran Iraqi militias and that the American and British ambassadors must leave Iraq within 48 hours or else.

Also heard from was Katab Hezbollah, an Iran-backed groups based on the Lebanese Hezbollah that has been active in Iraq since 2003, after the U.S. removed the Saddam Hussein government. Katab Hezbollah grew enormously after 2014 when the Iraqi government allowed the formation of more militias to oppose the ISIL invasion. Technically Katab Hezbollah is a creation of the original Lebanese Hezbollah that was created in the 1980s, with the help of Iran, to protect Lebanese Shia during a 1975-90 civil war. Hezbollah military and political power grew since the 1980s due to financial and military aid from Iran, via neighboring Syria, which became an Iranian ally in the 1980s. Lebanese Hezbollah is increasingly unpopular in Lebanon, where they exist as a separate military and political entity that constantly tries to gain control over the entire country. That is difficult because Hezbollah only has the support of about a third (the Shia portion) of the population and even the Lebanese Shia are growing tired of the Iranian domination and interference. Hezbollah currently controls only about ten percent of the members of parliament. Iraqis are aware of these developments in Lebanon and Katab Hezbollah is accused of working for Iran to achieve Iranian control over Iraq. The head of Katab Hezbollah was killed along with Quds commander Qassem Soleimani back in January. Now the United States is offering a $10 million reward for information about the location of Mohammad Kawtharani, the senior Lebanese Hezbollah in Iraq, where he coordinates Iranian support for and control of Katab Hezbollah.

Another Soleimani associate killed in January was Abu Mahdi Al Muhandis, the Chief of Staff for the PMF militias. His death led to the accelerated disintegration of Iranian control over many factions in the PMF. The Chief of Staff takes care of the details and those details included what had to be done to maintain the loyalty of the Iran-backed PMF militias. These links were deteriorating during 2019 as the leaders of the 67 PMF brigades increasingly developed divided loyalties. That meant more of these brigades, although pro-Iran and receiving weapons and other “aid” from Iran, could no longer be considered under Iranian control. The Iraqi government has been removing or remoting senior PMF officials who are pro-Iran. Since the death of Muhandis more PMF brigades have openly broken their links with Iran. Some are even leaving the PMF, which is what a few of the more extreme militias have already done. One example is the Katab Hezbollah, which is very openly fighting with American forces in Iraq.

April 9, 2020: In Yemen Saudi and UAE forces agreed to the UN-backed two week truce but the Shia rebels demanded more concessions at the last minute and never observed the ceasefire. The Shia rebels are determined to get the air and sea blockade lifted but the Saudis will not allow that because that will make it easier for Iran to smuggle in ballistic missile components, UAVs and other weapons. The UN urged everyone to accept the truce so that the covid19 pandemic could be tended to. The rebels are apparently not alarmed at the covid19 threat, which is understandable given the number of diseases still active in rural Yemen. So far there have been no verified covid19 cases in Yemen. There is still a belief among many Moslems that Allah will protect the faithful. Iran used to believe that but the massive covid19 casualties in Iran changed minds.

The rebels maintain control over hostile populations by controlling things that matter most for all Yemenis; food, safety and disease. Malaria, dengue fever and cholera have long been a threat but are usually kept under control. That changed in 2017 with a cholera epidemic that was never completely suppressed and has revived in 2019 with about 200,000 new cases that year and more in 2020. The original 2017 outbreak got out of control because the Shia rebels refused to allow the UN to fly in half a million doses of vaccine early on. The rebels insisted that they be first supplied with ambulances and other medical equipment their fighting forces needed. This delayed the vaccination program and the rebels continued to tolerate contaminated water supplies in areas they controlled. The resurgence of cholera is a very visible example of the problems in rebel territory. The rebels are less prepared to deal with the epidemic than they were in 2017. Cholera is endemic (always present) in Yemen and gets out of hand when public health services are allowed to deteriorate or are trashed by widespread violence. The rebels allowed the current cholera outbreak to get out of control because the rebels are more desperate than the government. The Shia tribes of the north have always been a minority in a majority Sunni region. For centuries the Shia tribes felt they were outsiders and were frequently persecuted. The Yemeni Shia were often taken advantage of as well and while the Shia rebels see Iran as a powerful and reliable ally, most Yemenis see Iran as taking advantage of the Yemeni Shia and a growing number of Yemeni Shia are quietly agreeing. Saying that out loud while in Shia rebel controlled territory is not safe.

April 7, 2020: Another Arab-Israeli has been arrested and charged with working as a spy for Iran. Police have observed the suspect meeting with Iranian intel personnel and then seeking to recruit other Arab-Israelis to work for Iran and help destroy Israel. Since 2014, and the appearance of ISIL (Islamic State in Iraq and the Levant), there has been a sharp increase in Arab-Israelis actively working t0 “destroy Israel”. Police estimate that between over 50 Arab-Israelis have actually made it to Syria and joined ISIL and about as many were detected in Israel or in Turkey before they got to Syria. Not many Palestinians (about a hundred) have actually gone to Syria. ISIL put the destruction of Israel high on its todo list and called on Arab-Israelis to join the fight. Many of those who did not want to fight in Syria were receptive to Iranian efforts, via Hezbollah) to recruit Arab-Israelis to serve as spies. In most cases, Iran simply wanted a reliable source of basic information any Israeli citizen could pick up by driving around the country or consulting local media.

April 4, 2020: In Lebanon Ali Mohammed Younes, the head of Hezbollah counter-intelligence (catching spies) was assassinated by gunmen and also stabbed with a knife. Hezbollah blamed this on Israel but few Hezbollah members believed that. The killing was probably because of internal feud, possibly over money. With the recent sharp cuts in Iranian cash assistance to Hezbollah there has been a lot scrambling to placate Hezbollah members who have lost their jobs or had their pay cut. Even commanders were hit with cuts and the search for additional funds brought to the surface some of the corrupt deals Hezbollah leaders engage in to enrich themselves and their families. The death of Younes was a plus for Israel because he had led an increasingly successful effort to detect and eliminate Israeli informants in Hezbollah controlled southern Lebanon. This effort was made possible by Iranian technical assistance.


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