It is telling that there were no spontaneous public demonstrations of joy in Iran on the 17th as the sanctions were officially lifted. The religious fanatics running the government are not too optimistic either. They note that year by year more of the senior clergy appear less fanatic and more willing to allow social reforms. Since this includes moving away from a religious dictatorship the most conservative and ruthless Iranian Moslems fear for their future.
The lifting of sanctions gives the government a chance to improve the lives of Iranians. Thus the government ordered an increase in oil production from the current million barrels a day to 1.5 million by the end of 2016 and to two million by late 2017. This is still less than the 2.3 million barrels a day produced before the 2012 sanctions were imposed but it will take a while to restore production. Foreign experts believe Iranian oil production targets are a bit too high and that it may take until the end of the decade to match 2012 production. Meanwhile Iran is selling off the more than 40 million barrels it has stored in tankers offshore or in land facilities. Unfortunately the price of oil is much lower ($29 a barrel) now than it was in 2012 ($108) and pumping a lot more does not mean as much. The Saudis and other Gulf oil states are keeping oil prices low in an effort to destroy the American shale oil industry (which most oil experts believe will not work) and hurt Iran (that is working). The lifting of sanctions also frees about $50 billion in cash frozen in foreign banks. This can be used to buy equipment needed to maintain and expand the oil industry, as well as other parts of the economy hurt by the sanctions. Iranian oil facilities are way overdue for refurbishment as much maintenance has been put for since the 1980s. Without massive investment the oil industry will become less productive and profitable. The government does not like to discuss this openly because the needed investments are huge and mean that other infrastructure needs will have to wait and that will hurt nearly all Iranians.
Iran plans to achieve GDP growth of 8 percent a year via foreign investment of over $30 billion a year. That will encounter problems with the notoriously corrupt bureaucracy. The religious dictatorship tolerates a lot of this corruption in order to assure the continued loyalty of many key supporters. But the majority of Iranians, and foreign investors, suffer from the corruption. Even the Chinese and Russians are wary, but both of these nations are even more corrupt and know how to deal with corruption encountered overseas. The Chinese and Russians do this with threats and whatever else (legal or illegal) that will protect their investments. This works often enough to keep doing it although neither Russian nor China invest for the long haul overseas. Corrupt nations tend to be politically unstable in the long run and when the revolution comes the foreign investors are usually big losers. Moreover the current Iranian government is kept in power largely because of the many religious fanatics willing to die to protect this corrupt religious dictatorship. China and Russia are not officially denounced by the Iranian government (as the U.S., Israel and West are) but China and Russia are not seen, by most Moslems, as friends of Islam. In short, Iran is a dangerous and unpredictable business partner and shows no signs of trying to change that. A lot of Iranians agree, which is one reason Iran allows so many well educated Iranians to emigrate. That simply reduces the number of potential (and more able) rebels.
There are still some sanctions on Iran and more may be added because Iran refuses to halt its ballistic missile development. Iran says this is mainly for use in destroying Israel but the new missiles have longer range that threatens more of Europe. Iran also recently boasted of its growing number of underground missile launch, storage, maintenance and production facilities. Israel has made it clear that Iran is still a threat and will be closely watched by Israel.
It is well that Iran be watched closely because the Iranian Islamic conservatives are determined to support terrorism overseas and eventually build nuclear weapons at home, rather than concentrating on improving the economy and living standards. Expensive efforts to aid pro-Iran groups in Syria, Yemen, Iraq and Lebanon have worked but at the cost of popular support inside Iran. The government sees these foreign adventures as a way to distract an unhappy population but too many Iranians see through that and it just increases the popular anger. The nukes remain important because Iran has been increasingly vocal about how Iran should be the leader of the Islamic world and the guardian of the major Islamic shrines (Mecca) in Saudi Arabia. Iranians believe that having nukes would motivate the Arabs to bow down. The Arabs have been kicked around by the Iranians for thousands of years and take this latest threat very seriously.
Yet many Arabs just want peace with Iran. A recent poll of Arab opinion leaders (political, economic, media and academic) found that 81 percent backed better relations between Iran and the Arab world. But only 35 percent believed that Arab countries were serious about making peace with Iran compared to 58 percent who believed that Iran was. Arab leaders know they would benefit from trade with Iran. The only problem is that Iran is again asserting its claim to political domination of the region. The last time this was a threat was in the 1970s when the Iranian monarchy was talking about rebuilding the ancient Persian Empire. The nearby Arab states were rattled by this as it was aimed at them. Iran was not a threat to Turkey (a NATO member) or Russia (then, as now, a nuclear armed state). This time around the Iranian monarchy is gone and replaced with a religious dictatorship that invests heavily in ballistic missiles and nuclear research.
The Iranian religious leaders have made the traditional Iranian empire building into a religious matter. That is a bad move. You can see that on the Internet where most of the Islamic terrorist related traffic in the Arab world (which is often in Arabic) is Sunni Moslems saying nasty things about Shia Moslems. This makes sense when you consider that 80 percent of Moslems are Sunni and only ten percent Shia. Unfortunately many of the messages criticizing Islamic terrorism in general gets denounced, at least among Sunni Moslems, as Shia propaganda. That shows the depth of the antipathy between Sunni and Shia because over 90 percent of Islamic terrorists are Sunni and most of their Internet support comes from the Arab Gulf states (in other words, the Arabian Peninsula). In the last few years the Islamic terrorist related messages by Moslems have increasingly been about the growing animosity between Shia Iran and Sunni Saudi Arabia (and other Sunni Arab states). This has become something of a religious war with Sunni and Shia clerics encouraging their followers to vigorously defend their form of Islam on the Internet. This often involves posting increasingly strident sermons (in text, audio or video format) by clergy backing their form of Islam. This has swept away earlier efforts by Sunni and Shia to use the Internet to help build better relations between the many forms of Islam. The fighting in Syria, which is basically a Sunni majority rebelling against an Iran-backed Shia minority government, further inflamed the nasty rhetoric on the Internet. That got worse when a Saudi led Sunni coalition entered the civil war in Yemen. There a Shia minority was defeating the Sunni majority and most Sunnis were not happy with that.
Iran has always been the economic (and military) superpower in the Persian Gulf and the much of the Middle East and now wants to go beyond that to be the leader of the Islamic world. The majority of Moslems oppose that as do most non-Moslem nations. Because of Iranian involvement in Syria Turkey is now an enemy of Iran and allied with Israel. This is not good for Iran but an excellent development for Israel and most Turks. The war in Syria, in particular the recent Russian intervention was very unpopular in Turkey. This was good for Israel because Turkey, long a foe of Russia was not happy with Russian troops fighting right on the Turkish border, Thus by the end of 2015 the Turks were discussing the resumption of diplomatic relations with Israel. Since 2002 the Islamic government of Turkey has been battling Turkish secularists and trying to improve relations with other Islamic countries (including ancient rival Iran). This 2002 policy meant adopting an anti-Israel attitude after decades of close relations with the Jewish state. The Iranian threat also led many Gulf Arab states to openly ally themselves with Israel.
That’s not the only new problem Iran has because of Syria. Russia and Iran have had some nasty disagreements over how to conduct the campaign in Syria. Iran was not happy with the Russia attitude, which implies that Russia should be in charge even though Iran had been fighting in Syria since 2013. By the end of December Iran had moved a lot of its personnel to Iraq, where Iran was assisting the Iraqi government in driving ISIL out of western Iraq (Anbar province and Mosul) and relations between the two nations have cooled. Russia and Iran still need each other but over the two centuries they have been neighbors relations have usually been cordial but tense.
These tensions have crippled UN efforts to get Syria peace talks going. The growing hostility between Saudi Arabia and Iran has made cooperation over brokering a Syria peace deal less likely. Russian efforts to mediate are also compromised because of tensions with Iran and the Saudis.
Iran is also suffering setbacks Yemen and is trying to delay the defeat of the Shia rebels until something can be done to distract or disrupt the Saudi led Arab coalition that has deprived the Shia rebels of the victory they seemed on the brink of in early 2015. The UN hosted peace talks brought no peace so far but the UN is still trying. Both sides continue fighting and government forces are closing in on Sanaa, the national capital. As powerful as it is, the Arab coalition is dependent on popular support at home and that means keeping coalition casualties down. So the advance is deliberate and prudent. Nevertheless this conflict appears to be ending without addressing the corruption and bad government that have made Yemen a bloody mess in the first place.
January 17, 2016: The United States and other Western nations lifted most of the heavy UN-approved economic sanctions Iran has been coping with since 2012. This comes as a result of the July 2015 treaty and UN inspectors declaring that Iran had met the treaty conditions regarding nuclear research. Many, especially the Israelis, believe this only delays (by up to 15 years) Iran obtaining nuclear weapons. At the same time the U.S. imposed new sanctions on Iran for continued violation of UN bans on ballistic missile development and testing. The Arab states in the region, especially the ones with lots of oil, do not believe Iran will be any less aggressive in its efforts to regain military and political dominance in the region. Many Arabs believe that lifting the sanctions was a plot by Western nations to help Iran again become the most powerful economy in the region. That would mean a lot of business for Western firms. But in Iran there is more of a desire to return things to “normal”. For example in 2000 Iran had a larger GDP than Saudi Arabia. Because of the sanctions the Saudis now have a GDP 60 percent larger than Iran.
January 14, 2016: Russia released the text of the agreement it signed with Syria in August 2015 to authorize Russian intervention in Syria. One interesting aspect of this treaty was the fact that the Russians can stay as long as they wish. This is apparently irritating to Iran which is believed to want a post-civil war Syria that is under more direct Iranian control and a semi-permanent Russian military occupation would interfere with that. Short term the Assads want to survive but long term they and most other Syrians are not keen on becoming, unofficially, another province of Iran. If a permanent Russian military presence will prevent that then it is OK.
January 13, 2016: The government announced that another IRGC (Iranian Revolutionary Guard Corps) commander (a colonel) had been killed in Syria. Over a hundred Iranians that have died in Syria since October. Before the Russian intervention there the government played down Iranian deaths in Syria and denied there were many Iranians there at all. Now Iran admits that their troops have been actively involved in Syria since 2013 and over 300 have died so far. A thousand or more Iran recruited and supported foreign mercenaries in Syria have also died.
January 12, 2016: Two U.S. Navy coastal patrol boats and ten sailors manning them were seized by armed Iranian patrol boats in the Persian Gulf. The Americans were accused of being in Iranian territorial waters. The American boats and sailors were released a day later but the U.S. Navy has not yet explained how this improbable event actually took place.
Mohammad Ali Jafari, the commander of the IRGC (Iranian Revolutionary Guard Corps) boasted that the IRGC was responsible for training (and often recruiting, arming and paying) 200,000 fighters in Syria, Iraq, Yemen, Pakistan and Afghanistan. At least a quarter of these are in Syria, followed by Lebanon, Iraq and Yemen. Pakistan and Afghanistan were not happy with the IRGC publicly admitting that Iran has sponsored local (and often illegal) Shia militias. Iran had to do some diplomatic fence mending over that. Jafari’s comments did not help efforts to defuse the Sunni-Shia feud that Saudi Arabia and Iran have revived as part of an Iranian effort to reassert the traditional Iranian domination of the region.
Near the Pakistan border an Iranian F-4 jet fighter crashed during a training flight. The pilot and the weapons officer aboard both died. Iran is one of the few nations still operating the American built F-4, a 1950s design that was once widely used and exported. Iran received them in the 1970s.
January 9, 2016: In the Kurdish northwest local opposition leaders complain that government persecution of Kurds has gotten worse in the 2015. Executions of Kurds are more common, running at the rate of 80 a month. Many of executions and fatal encounters with the security forces are attributed to Kurds involved in drug smuggling. But local Kurds deny this and accuse the government of becoming more violent about destroying Kurdish separatist and opposition groups. Sunni Baluchis in the southwest have the same complaint.
January 8, 2016: In the Pakistani capital nearly two thousand local Shia demonstrated against Pakistan joining a Saudi led anti-terrorist organization. Shia believe this effort is directed against Iran and Shia Moslems in general. Most of the demonstrators specifically condemned Saudi Arabia for the recent (January 2nd) execution of a Saudi Shia cleric who was accused of encouraging Shia violence in Saudi Arabia. The Pakistani decision to not send troops to help Saudi Arabia fight Shia rebels in Yemen was, in part, to avoid problems with Pakistani Shia. Pakistan points out that over 20 percent of Pakistanis are Shia, Iran is a neighbor and trading partner and Pakistan is heavily involved with battling local Islamic terrorists. Off the record Pakistanis note most of this Islamic radicalism began in Arabia, financed by Islamic charities sponsored by Arab oil money (from governments and wealthy individuals). The oil rich Gulf Arabs are angry with what is perceived as ingratitude and betrayal after years of generous financial support. Pakistan made matters worse by announcing it would cooperate with Iran to try and solve the Yemen unrest (where Iran admits it backs the Shia rebels) peacefully. That was seen as insulting to Saudi Arabia, which had publicly asked Pakistan to join the Saudi led coalition (Qatar, UAE, Kuwait, Egypt, Sudan, Bahrain, Morocco, Jordan, and Egypt) fighting Shia rebels in Yemen. At the same time Pakistan assured Saudi Arabia that Pakistan would provide military assistance if the territory of Saudi Arabia were invaded. That would only happen if Iran attacked, although Pakistan refused to elaborate on that possibility.
January 7, 2016: The government accused Saudi warplanes of bombing the Iranian embassy in the rebel held capital of Yemen. Saudi Arabia investigated the claim and found it to be false.
January 3, 2016: Next door in Iraq (south of Baghdad) two Sunni mosques were bombed and at another a mosque employee was shot dead. This was believed to be revenge attacks for the January 2nd execution of an outspoken (against Sunni mistreatment) Shia cleric in Saudi Arabia. Iran loudly protested this execution as well and a crowd of Iranian protestors invaded and burned part of the Saudi embassy there. This led to Saudi Arabia breaking diplomatic relations with Iran and ordering Iranian diplomats out of Saudi Arabia within 48 hours. Kuwait followed suit despite Iranian apologies. This is a disturbing development for Iraq because nearly all Iraqi Shia are Arabs. Despite close religious ties to Iran even Shia Arabs believe that Iranians (who are Indo-European, not Arab) want to dominate the region and Arabs in general oppose that.