November 10, 2013: The second round of “serious” negotiations over the Iranian nuclear program have ended in failure. Iran is unwilling to make any serious concessions. Iran insists it has no nuclear weapons program and is only offering to slow down nuclear fuel production and construction of nuclear research facilities. Nevertheless, Iran counts it as another victory because the West showed up to talk. The main Western demand was that Iran halt work on its plutonium producing nuclear reactor and produce less enriched (to 20 percent) uranium. This means producing uranium that contains that percentage of the more volatile U-235 form of the nuclear material that can cause a nuclear explosion.

Plutonium is the best material for nuclear weapons but at the moment Iran has a lot more uranium. A 1,000 Megawatt nuclear power plant (like Iran’s only such plant at Bushehr) requires 25 tons of enriched uranium (in the form of pellets, inside fuel rods) each year. That 25 tons is the end result of processing 200 tons of uranium ore from a mine. A nuclear weapon requires about 20 kg (44 pounds) of highly enriched (eight times the level of fuel for power plants) uranium. Currently, Iran has enriched most of its nuclear material to about 5 percent and some of it to 20 percent. For weapons, you need to increase the content of Uranium 235 in uranium ore to at least 54 percent. This is far above the 3.5-10 percent typically used in nuclear power plants. In its natural state Uranium ore is only about .7 percent U-235. Anything over 20 percent enriched can be used for a nuclear bomb, although for best results you want it over 50 percent. The most effective and reliable nuclear weapons use 80 percent enriched uranium.

Iran has long believed that the UN would not be able to implement seriously effective sanctions because China is an Iranian ally that would veto any such move. The United States and Western nations got around this and have succeeded in cutting Iranian oil exports in half. Now it’s a race to see what happens first, an economic and political collapse or working Iranian nukes ready for use (and a world inclined to be terrified into submission by that threat). Iran refuses to halt enrichment of “power plant” nuclear fuel to 20 percent. Uranium at this level can be quickly enriched further to over 50 percent and that is nuclear weapons grade uranium. Iranian insists it enriches to 20 percent simply to provide more efficient power plant fuel. That is technically true but in practical terms it is uneconomical and seen by the West as a ploy to build a stockpile of weapons grade uranium. Currently Iran has 200 kg (440 pounds) of 20 percent enriched uranium. It needs 250 kg to have enough to further enrich to supply enough nuclear material for one nuclear bomb.

In addition to not wanting to deprive itself of bomb grade material (plutonium or enriched uranium) Iran is also unwilling to grant the “go anywhere” access needed for inspectors to ensure that Iran is not cheating. At the same time Iran is trying to offer sufficient concessions to the West to get the oil embargo lifted. Losing over half their oil income is causing growing shortages and popular unrest. Iran is running out of cash, especially because a lot of foreign exchange is being spent to prop up the Assads in Syria.

The “charm offensive” the new government has going now includes offers of lucrative contracts for foreign firms to develop Iranian oil fields, once the sanctions are lifted. This is, in effect, a bribe directed at the many Western governments whose economies could use such a boost. Israel fears that some Western nations will fall for all this and lift the oil sanctions. Israel is a target for any Iranian nukes and many Iranian hardliners have made that very clear. The Gulf Arabs are also threatened by Iranian nukes but not to the extent of Israel. Iran wants to rule the Gulf Arabs but has vowed to destroy Israel and kill or drive away all the Jews there. Thus, Israel is very hostile to any deals with Iran that do not guarantee shutting down the nuclear weapons program. The Israelis also point out that the long range (able to reach Israel) Iranian ballistic missiles are not needed either and should also be the target of sanctions. Such missiles are essential if Iran is to realistically threaten Israel with nuclear weapons.

The cash shortage inside Iran is causing unrest among reformers (who are willing to give up the nukes and who want less religious and social oppression) as well as hardliners (who want nukes and continued enforcement of unpopular lifestyle laws). For decades the hardliners have intimidated the majority into compliance, largely by constant threats of more violent suppression of dissent (and any “un-Islamic” behavior). But people still resist, and more of them are doing so, especially with the embargo and increased poverty. The government has long spread the oil wealth around (after keeping a lot for the corrupt clerics and their families). This “carrot and stick” approach no longer works as well as it once did, and the longer the cash shortage continues the more unruly the population becomes. Ultimately the government needs support from the hardliners (about 20 percent of the population) to survive, so it cannot give up too much to appease the West and get sanctions lifted.   

In mid-October Iranian officials first met with their counterparts from the U.S., Russia, China, Britain, France, and Germany to begin discussions on how to end the heavy sanctions on Iran. The two days of talks produced nothing except Iranian refusal to consider what the West wants (the end to Iranian nuclear weapons research). Another round of talks will take place in November. Everyone issued upbeat press releases. The Saudis and Israelis are unhappy with all this theater but Russia considered it a victory for their ally Iran. The November talks offered some “progress” (at least according to all the press releases) but more talks will be held to try and reach an actual agreement.

The successful (by Iranian standards) November negotiations follow earlier victories when the U.S. backed away from supporting air attacks (by itself or Israel) on Iranian nuclear facilities. Then came the victory a few months earlier when, despite a major Syrian use of nerve gas against pro-rebel civilians, Americans refused to carry out promised air attacks against the Syrian government. That, and weak support for the Syrian rebels, has enabled Iranian aid (advisors, cash for the economy, and thousands of Shia mercenaries) to change the course of the war. The rebels are now on the defensive and Iranians are further intimidating their main regional opponent: a Sunni Moslem coalition led by Saudi Arabia. The Gulf Arabs, despite spending much more on defense, do not have the capability or confidence to militarily intervene in Syria. This is humiliating enough, but the success of Iranian backed Assad forces against Saudi backed rebels is even worse. The Saudis are furious at the West for letting Iran win this one and, as a further humiliation, there’s not a lot the Saudis can do about it except court even further humiliation by scheming with Israel (the official arch-enemy of Saudi Arabia and most Arabs for over 60 years) to halt their mutual Iranian enemy.

President Hasan Rouhani allowed negotiations over the Iranian nuclear program despite opposition from hardliners. But the senior clerics understand that the sanctions must be lifted and Rouhani appears to have a plan. Initially he refused to consider halting nuclear research or allowing nuclear inspectors freedom to search wherever they want in Iran for evidence of this program Iran officially insists does not exist but unofficially does (and any Iranian will agree with that). Rouhani is willing to make all sorts of symbolic concessions in order to end the severe economic sanctions imposed in 2012. The sanctions are doing major damage to the Iranian economy and Rouhani has dropped the official line that Iran was coping. Iran is not coping and that is no secret. Despite that, the Iranians have made it clear that the secrecy of their nuclear program is not negotiable.

Since the sanctions began in June 2012, the prices of imported consumer goods has increased 40 percent. There is rising unemployment and general anger at the continuing economic problems. While the government blames it all on sanctions, most Iranians know that government corruption and mismanagement also play a major role and have done so long before the severe sanctions were imposed in mid-2012. The new Rouhani government is trying to address that but there is not much that can be done because many of the senior clerics who control the country are corrupt (or, more often, their families are). Meanwhile, the sanctions, which have cut oil exports by more than half, have also crippled the oil industry by blocking the import of essential replacement parts and oil industry maintenance equipment and services. This means even when sanctions are lifted, there will be years of work needed to restore productivity to the oil and gas industry.

Most countries pressuring Iran to halt its nuclear program don’t believe Rouhani is really willing to make any real concessions (like admit they have a nuclear weapons program and allow inspectors to monitor dismantling of that program) but will show up to talk anyway, just in case. This is exactly what happened. Rouhani has to do something because the usually clever Iranians have not been able to find their way around the 2012 sanctions, and losing more than half their usual oil income has been a major problem. Oil accounts for 80 percent of exports (the source of foreign currency to buy foreign goods) and half the government budget. Before the new sanctions Iran allowed imports to climb from $39.1 billion to over $60 billion in the last seven years, in order to keep unrest (against the corrupt religious dictatorship) down.

Rouhani’s conciliatory gestures towards America and the West has made many Iranian Islamic radicals angry and crowds of them have gathered to publicly denounce a government effort to ban the use of the chant “Death to America” in public. Most Iranians would like to move to America (and many have already done so) not destroy it. But for Iranian religious radicals the phrase has special meaning and they refuse to give it up. Beyond that, the senior clerics who control the security forces and courts are backing Rouhani whose kinder and gentler approach to diplomacy is seen as the best way to get the sanctions lifted.

In Syria the Assads are having greater battlefield success in the last three months, mainly because of the foreigners, who are there mainly because of Iranian cash and advisors. Iran has recruited an army of fanatic Shia men, mainly from Iraq and Lebanon,  and used them to revive the combat capabilities of the Assad forces. That, plus the growing divisions among the rebels, has allowed Assad forces to defeat the rebels in many areas. There are dozens of separate battlefields in Syria, and on most of them the rebels continue to hold their own. But in key areas like Damascus, Aleppo, the Lebanese, and Jordanian borders the Assad forces are pushing the rebels back.

Despite its own cash flow problems at home, Iran continues to supply crucial aid for the Assad government, and those efforts are succeeding. Iran has not put a lot of Iranians into Syria but there is a constant supply of cash (in the form of dollars and euros), very effective military, security and other advisors, and some equipment and weapons. The cash and personnel tend to arrive by air on several night flights a week from Iran. These flights cross Iraq, which tries to pretend they don’t exist, but American radar operating in Kuwait and aboard ships in the Persian Gulf can spot these flights. Complaints to Iraq continue to have no effect. Iraqis blame their lack of an air force or much anti-aircraft defenses. So Iraq is pushing the U.S. to hurry up with deliveries of F-16s and the training of Iraqi pilots and maintenance personnel. The Iraqis are also trying to make the U.S. understand the pressure Iraq is under from Iran, which has millions of supporters in Iraq and several armed and willing militias that are quiet now but could be ordered to attack the Iraqi government (run by more moderate but very corrupt and inept Shia). 

There is still a lot of trade between Iran and Iraq and some of the trucks from Iran continue all the way to Syria. This is a dangerous route because western Iraq (Anbar province) is largely Sunni and full of Islamic terrorists. The government has nearly 30,000 police and soldiers in Anbar and thousands of men in pro-government militias. This is keeping al Qaeda from taking over Anbar, and the violence there is increasing.

The Assads, with the help of Russia and Iran, have been trying to depict the rebellion as an effort by al Qaeda to establish a new base in Syria. While this is true, the Islamic terrorist groups are a small part of the rebel force and often more disruptive than helpful to the rebels. The Assads see the rebel lack of unity and coordination as an opportunity to put down the rebellion. To this end the government is deliberately making life miserable for pro-rebel civilians (the majority of Syrians) and has succeeded in driving most of them out of the country or their homes or cutting their living standards considerably. The UN estimates that over 9 million Syrians (40 percent of the population) are in need of food and other aid. A third of these people are still in their homes but cut off from food and other supplies. This is largely the result of a deliberate Assad strategy of cutting pro-rebel populations from supplies. The goal is to make continued rule by the Assads preferable to supporting the rebels. Lately the government has been making progress, aided by a foreign army of Shia fanatics organized (and paid for) by Iran and continued supplies of weapons from Russia. Iran also provides a lot of cash to keep the pro-Assad civilians living much better than the pro-rebel civilians. This sends a message, which more and more pro-rebel civilians are noticing.

Another measure of success for the Assad government is the change in the exchange rate for the Syrian pound. It is currently 115-120 pounds to the dollar. That’s up from 160 a week ago, 220 two months ago, and a peak of 300 three months ago. Inflation is still running at about 200 percent a year and that will continue until the economy can be restored. The exchange rate was 50 pounds to the dollar before the rebellion began in 2011. The change in exchange rates also reflects the failure of the rebels to make much progress in the last few months. Aid from Russia and Iran has kept the Assad government and armed forces going. Russian banks are also risking retaliation from the U.S. by helping the Syrian government get around sanctions.

Al Qaeda and other Sunni terrorist violence in Iraq has left over 7,000 dead in Iraq so far this year. It’s all about the growing religious conflict between Sunni and Shia Moslems. This means little to those outside the Middle East, but to Arabs (especially Saudis) and Iranians (who are not Arab) it is (and has been for over a thousand years) a big deal. Even before Islam appeared in the seventh century, Arabs (and Semitic people in general) were at odds with the Indo-European Iranians. In a rare victory for Arabs over Iranians, Islamic armies conquered Iran in the late 7^th century. This happened in part because Iran was in the midst of one of its frequent civil wars as the aggressive Iranians fought each other when they weren’t going after their neighbors, which is how Alexander the Great and his Greek coalition managed to conquer another Iranian empire a thousand years earlier. Converting the Iranians to Islam did not eliminate the tension between Iranians and Arabs because within a few centuries Iran became the champion of the Shia version of Islam. This was the main rival to the mainstream Sunni. While nearly all Iranians adopted the Shia form of Islam, only a small minority of Arabs became Shia. Most other new converts to Islam also went for the Sunni version, and today about 80 percent of Moslems are Sunni and only about 10 percent are Shia. But with the aggressive and capable Iranians backing the Shia cause, the Arabs are worried. Even Arab Shia are uneasy at the aggressiveness of the Iranians, who make no secret of their desire to make Shia the dominant form of Islam. Al Qaeda is one of many Sunni Islamic radical groups that is dedicated to making Sunni Islam dominant worldwide. That means converting all non-Moslems and forcing “deviant” Moslems (like Shia) to accept the true Sunni way. For al Qaeda those who refuse to get it straight must die. Naturally this creates a great deal of tension between devout Sunnis and Shia, and in Iraq that has resulted in decades of growing violence between the two groups. Saddam Hussein and his Sunni minority dictatorship was supported by most Arabs as a necessary evil that kept the Iranian dominated Shia from advancing into Arabia and taking the Arab oil. The Iraqi Shia (over 60 percent of the population) are determined to defend their version of Islam but also their independence from Iranian domination. So the Shia led government of Iraq is caught between Sunni radicals who want to kill them for being heretics and Iranians who threaten invasion if the Iraqi Shia do not cooperate more closely with Iran. 

November 9, 2013: The government ordered kindergartens and elementary schools closed in the capital because of the higher pollution levels. The population of Tehran has grown from 3 million to 14 million in the last 30 years and there’s a lot more air pollution in the same valley. The pollution is now at dangerous levels because so many factories and older automobiles are in the city.

November 8, 2013: Iran has set up a factory to produce the Sayyad-2 anti-aircraft missile. This is a copy of the Chinese HQ-2, which is a copy of the Russian S-75/SA-2 system (from the 1950s). Iran has had an earlier version (Sayyad-1) since 1999.

November 4, 2013: Thousands of hardliners marched in the capital shouting “death to America” (actually a more accurate translation is “down with America”, but that’s another matter) to commemorate the anniversary of the 1979 seizure of the U.S. embassy and diplomatic personnel. This breach of international law triggered decades of animosity with the United States.

November 2, 2013: China will use $20 billion in cash it owes Iran for oil for development projects inside Iran. A lot of the Iranian oil is paid for with barter (sending goods in exchange for oil) but the current sanctions make it impossible to send much cash because of the control the West exercises over the international banking system. Meanwhile this year, Iraq surpassed Iran as the largest exporter of oil to China. This is because of the more severe sanctions imposed on Iran in 2012. Even Iran admits that it’s GDP has shrunk this year as a result. China would like to get more oil from Iran as well, but the sanctions make that difficult.

The editor of a pro-reform newspaper was jailed because of an article he recently published that offended hardliners. The article discussed ways that the religious disputes between Sunni and Shia might be resolved. The hardliners considered this un-Islamic and the newspaper was shut down.

October 29, 2013: A popular actress was sentenced to 18 months in prison for speaking out in favor of government, social, and economic reform.

October 28, 2013: A previously unknown Sunni radical group, Jaish-ul Adl (Army of Justice), took credit for the ambush that killed 14 border guards on the 26^th.

October 26, 2013: Iran executed 16 jailed Sunni (Baluchi) separatists after other Baluchi rebels killed 14 border guards in the southeast yesterday. Troops pursued the Sunni gunmen and over the next day or so killed at least four of them.

Kurds in the northwest accuse police and soldiers of killing at least 17 Kurds in the last two months.

October 25, 2013: In the capital the government ordered anti-American posters (which questioned the ability of the U.S. to negotiate an end to oil sanctions) taken down. The government is playing nice before the next round of negotiations with the West.

October 24, 2013: The U.S. is prosecuting an Iranian man, who is an American citizen, for trying to buy American anti-aircraft missiles for Iran.