Iran: Faith In Victory Makes Anything Possible

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March 2, 2015: The government continues to try negotiating its way out of the growing list of sanctions seeking to get Iran to shut down its nuclear weapons and ballistic missile programs. The religious dictatorship sees these negotiations as crucial to its survival. In part that is because most Iranians have decided that the ruling clerics and their Islamic Republic are a failure. This can be seen in the plunging birthrate, growing number of drug addicts and the many small protests against the rule of religious zealots. Young Iranians feel like prisoners serving life sentences in a nightmarish jail run by unpredictable religious fanatics who are also corrupt and unable to manage the economy.

Actually the religious dictatorship has been pretty competent in organizing countermeasures for the growing list of economic sanctions. But this simply eases the pain of the sanctions and does not eliminate the growing privation all Iranians are suffering. The religious leaders see the ultimate solution to all this as nuclear weapons, which will enable them to force their neighbors and the West to drop the sanctions and deal with Iran on Iranian terms. Pointing out that this is not how it actually works for nations with nukes has no impact on the Iranian leadership. They are determined to have their nukes and see the West too disorganized and their Arab neighbors too scared to really prevent Iran from building a bomb or negotiating and end to the sanctions. Again, it is obvious that while the Arabian states may be afraid of Iran, they seem determined to use their oil weapon (control of so much of the worlds’ oil that they can keep the price low as long as they wish) to force Iran to surrender their nuclear program. It’s a test of wills but the Arabs have the more powerful economic weapon and show no signs of backing off.

Inflation is down a bit. It is 15.8 percent compared to 16.2 percent in late December. Iranian smuggling efforts have led to a 30 percent increase in oil shipments recently. These sales are currently bringing in about $1.4 billion a month It is not enough.  More oil income is needed and to help with that nearly 8 percent of the $62 billion sovereign wealth fund (the government savings account) will be spent modernizing oil and natural gas fields in the next year. Maintenance and updates have been delayed for decades because of sanctions (that prevented foreign firms who do this sort of work or supply necessary equipment from doing business with Iran) and other spending priorities. But too many oil and gas fields are suffering from falling output, mainly because of equipment problems. Because of the sanctions the upgrades to equipment will be somewhat limited but a lot of deferred maintenance can be performed. China produces a lot of the needed equipment and that can be smuggled in. China can also supply manufacturing equipment to help Iran create some of the needed equipment. Iran is smuggling more oil out, but with local forecasts of prices declining to $40 a barrel, all Iran can do is ship even higher quantities.

The U.S. believes that Iranian smuggling activities continue at a high level and that recently this included sneaking in a billion dollars in U.S. currency, to be used to pay for essential imports. The Iranians gathered the cash using front companies and assets they have outside Iran (especially Iraq).

All the agitation over Iranian nukes has been overshadowed (in Western media at least) by other events in the Middle East. Despite the declining ISIL (Islamic State in Iraq and the Levant) prospects a recent opinion poll in the United States showed that 84 percent of Americans believe ISIL is the most serious threat over the next decade. International terrorism also has 84 percent of Americans concerned. Iranian nukes frighten 77 percent followed by North Korea (64 percent) and Russia (49 percent, actually a tie with the Islamic effort to destroy Israel). 

Then there is Yemen. It is unclear if the military and the Sunni tribes will succeed in resisting and defeating the growing Shia power. Yemen needs a new coalition to run the country because the one that existed until September ceased to function long before president Hadi was forced out in January. Once the Shia rebels occupied the capital in late 2014 and then a growing number of cities and provinces to the south it was obvious the Shia would have a lot to say about the next government. Now the Shia claim they are the government and Iranians worry that this will turn into another expensive foreign obligation (like Hezbollah and the military aid efforts in Iraq and Syria, not to mention financial aid to Hamas in Gaza and several similar entanglements). All this military foreign aid is unpopular with most Iranians who would rather see the money spent at home.

Iran officially has nothing to do with what is going on in Yemen but Arabs know that the “victory” in Yemen is being celebrated in the streets of Iran (at least in conversation) and increasingly in Iranian media as well. This is humiliating for the GCC members and Sunnis in general. Iran has not directly intervened (but is suspected of supplying the Yemen Shia with cash and advice). The best Sunni hope for military intervention is the Saudis, but that’s not the Saudi style. The Saudis don’t want to see their armed forces tied down in Yemen, not when Iran remains a major, and growing, threat. Then there is the ISIL threat in Syria and Iraq (and, to a lesser extent, inside Saudi Arabia itself). There is no easy way out of this mess for anyone. The customary way these things are settled in Arabia is by making deals. The Yemeni Shia feel an affinity for Iran, considered the “leader” of the Shia world and expect help from that direction. Most Yemeni Shia don’t want the religious fanaticism of Iran but are willing to accept aid from Iran and work to make Sunni majority Yemen a “friend“ of Iran (much like the Shia minority has done in Lebanon and Syria). The Saudis and GCC are very hostile to this sort of thing but reluctant to go to war over it. That may change now that the Yemeni Shia rebels have officially declared themselves the rulers of Yemen even though they control only the capital and the north (about a third of the country).

March 1, 2015: For the first time a direct flight from Iran landed in Yemen. The transport was carrying medical supplies and arrived in the capital at the same time that Arab countries were moving their embassies south to the port city of Aden, which is not yet under control of the Shia rebels who have been advancing south since 2014. In February the elected president (Hadi) of Yemen fled the capital and, in effect, moved the government to Aden. At the moment the Shia rebels have control of northern Yemen but the Sunni majority, in the form of the armed Sunni tribes, are preventing a Shia advance any farther south. Meanwhile Iran announced that it will now carry out regular (14 flights a week) service between Iran and the Yemeni capital. Iranians have been warned that Sunni Islamic terrorists (ISIL and al Qaeda) are very active in Yemen and will be seeking to kill or kidnap Iranian visitors.

February 28, 2015: In the southwest Iranian intelligence officials apparently provided the tip to Pakistani police that led to the arrest of a wanted (on both sides of the border) Baluchi Sunni terrorist leader; Salam Rigi.  The arrest took place when police stopped a bus that Rigi was on and arrested him. Iran apparently expects Pakistan to turn over Rigi so Iran can try (and probably execute) the leaders of Baluchi Sunni rebels in southeast Iran.

In Yemen the Shia rebels in control of the capital and most of the north signed an agreement with Iran to enable, for the first time, commercial air traffic between the two countries. 

February 26, 2015: The U.S. revealed that it was pretty certain that the Internet based attack on a major casino in Las Vegas in early 2014 was carried out by hackers based in Iran and probably at the orders of the Iranian government. The attack crippled the casino operations for a while but did not steal any money.

February 25, 2015: Iranian exiles claim there is a secret uranium enrichment plant northeast of the capital. The exiles presented satellite photos of an industrial facility they insist is actually for enriching uranium. Such a facility could be put just about anywhere as machinery used is typical of what is found in many factories.

February 23, 2015: Russia has offered to sell Iran the S-300VM system. This is the latest (2013) version of its S-300 anti-aircraft missile system. The problem is money. Russia has also been badly hurt by the plunging world oil price and recently cut its current defense budget ten percent. By early March Iran had not yet responded to the Russian offer. Iran is still demanding that Russia pay a billion dollars compensation for cash paid for older model S-300s in 2007 that were never delivered. That sale was halted by the sanctions and deals with Israel and the United States. But now Russia is under sanctions for its invasion of Ukraine and not concerned with any sanctions.

February 22, 2015: In Libya a bomb went off in the capital near the empty Iranian embassy compound. A grenade was also thrown into the compound. No one was injured and there was not much damage.

February 16, 2015: In Yemen the Shia rebels officially claimed to be the only legitimate government of the country. The new Yemeni president was not elected but the Yemeni rebels control the capital and most of the north so they can get away with this. The rebels say they will eventually take the largest city in the country, the port of Aden in the south. That will require defeating a larger number of very angry and heavily armed Sunni tribesmen and some of the armed forces.

February 15, 2015: The Chinese foreign minister arrived to encourage the government to work out a deal on nuclear weapons. China would prefer that Iran dropped its nuclear weapons program but is too polite to say so publicly.     

February 14, 2015: The navy has sent a 1,200 ton corvette (described as a “destroyer) and a supply ship on a tour of the Indian Ocean. This included stops at the Sri Lanka and then, after crossing the Equator (a first for an Iranian warship) Indonesia. This is mainly for propaganda purposes.

February 12, 2015: In Syria senior an Iranian Revolutionary Guards officer and an aide were killed during a fire fight with Islamic terrorists, who have the two bodies. Iran is believed to have several thousand military trainers, advisors and technical experts in Syria and at least twenty had been killed there so far. This incident took place in southern Syria (Daraa) near the Jordanian border. Syria is assisting the Syrian government in fighting rebels along the Jordanian and Israeli border.

February 11, 2015: Iran announced it would begin training Iraqi Army officers, a task the United States and NATO previously had a monopoly on.

In the east police opened fire on a group of 21 Afghans trying to enter illegally. Two of the Afghans were killed and seven wounded. These Afghans were apparently seeking jobs, not smuggling drugs.

February 10, 2015: In the northwest (Kermanshah province) a senior judge was murdered by a gunman. This area is largely Kurdish (who are Sunni) and Kurdish radicals (PJAK) are active in opposing rule by Shia Iranians. The judges and secret police are particularly unpopular in this area.

February 9, 2015:  The government revealed that another senior Iranian Revolutionary Guards officer had been killed (by a sniper) in Iraq on the 7th. This is the second such death in Iraq, the last one occurred in December. Iran is believed to have several thousand military trainers, advisors and technical experts in Iraq.

 

 

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