The government stopped reporting inflation rates in late 2018 but anyone who shops regularly knows that it is at least 40 percent and the government is not having much success dealing with the constantly rising prices and shortages of consumer and commercial items. The inflation is particularly painful this time of year when springtime, and traditional (long before Islam or Christianity showed up) Nowruz (Festival of Fire) celebrations. This is a collection of cultural customs, many of them over 4,000 years old that have survived as a major holiday. The Islamic dictatorship tried to ban Nowruz, mainly because they shared many beliefs with the pre-Islamic Zoroastrian religion of Iran. Recent protests often involved people condemning Islam and openly advocating a return to Zoroastrianism. Doing Nowruz right means lots of special foods and recipes and this year most Iranians cannot afford the food treats because the essential ingredients are either too expensive or simply not available in many parts of the country.
There are other shortages. After a few months of trying even, senior officials are criticizing European and Russian efforts to help Iran cope with the revived American sanctions. Iran was able to persuade the EU (European Union) to assist Iran in getting around the sanctions the Americans restored because of Iran violating the 2015 treaty that lifted most of the sanctions. Iran offered EU nations lucrative economic opportunities in return for cooperation in getting around the American sanctions. The EU created the SPV (Special Purpose Vehicle) which is basically an EU approved barter system that makes it easy for Iran to sell trade with the EU via barter rather than use dollars. Iran uses a similar system with Russia and China. There were great hopes for the SPV but so far it has been a major disappointment to the many Iranians seeking to overthrow the religious dictatorship that has made life miserable for over four decades. Iranian leaders considered the SPV a major victory if only because it reduces cooperation between the United States and the EU. SPV looked good on paper but in practice it did not work. Part of the problem was that Iran has few friends and when faced with the choice of going along with sanctions or making a little effort to use SPV many nations and international businesses preferred to abandon Iran rather than take on the American sanction enforcement efforts. The Europeans say they will keep working on getting SPV to work. In the meantime, the government says it is trying to get some cryptocurrency (bitcoin and blockchain) working. These days that is a sign that you have run out of practical ideas.
Iran has deployed a lot of ingenuity in exporting oil in violation of the sanctions. The problem is there are not many new ideas and recycling the old ones stumbles over the fact there are a lot of people who know how to detect and disrupt the classic smuggling techniques. The Americans are particularly good at that because they have been at it since the 1990s (when Saddam Hussein of Iraq was the chief violator). Articles and technical reports were written about how best to detect the oil smuggling and even though Iran has access to that information it is difficult to come up with something unique and effective. Smuggling efforts have some success but not enough to make a significant difference. This could be seen in the continuing decline of Iranian oil exports. While the smuggling scams reduce the decline in exports it has not been able to halt or reverse it. Moreover, foreign economists agree that the sanctions put the Iranian economy into a severe recession in 2018 that is continuing into 2019. Iranian GDP is expected to shrink by over three percent in 2019.
The government is trying to put all the blame for economic problems on the United States and the American sanctions. That bit of rhetoric has been rendered obsolete by the growing popular anger at the corruption and mismanagement of their own government.
The government has cracked down hard on the continuing protests. Those identified as “leaders” or “most damaging” have been jailed and accused of whatever crimes seemed most appropriate. A lot is forbidden in Iran because the religious dictatorship is run by senior clerics who can declare anything “an enemy of Islam” and prosecute anyone associated with the newly created criminal act. This approach has reduced the public protests somewhat but the popular anger remains and is still there.
The major complaint of Iranians is how their government has mismanaged the economy over the four decades the clerics have been in charge. Since the clerics took over in 1979 Iraq has been perpetually at war, first with Iraq for nine bloody years and since then with Israel, America and anyone the clerics felt was a problem (including “troublesome” expatriate Iranians). For three decades the “war” against Israel and America (the two “Great Satans”) has been largely one-sided but increasingly expensive as the Iranian defeats piled up. It didn’t take long for many Iranians to figure out that this war against former allies was not really a war but rather an excuse for the clerics to spend a lot of money on an army of Islamic terrorists whose main job was to protect the ruling clerics from the Iranian people. The clerics thought they could control popular dissent by maintaining a militia of religiously minded volunteers could earn some extra cash (and other favors) by bullying (or beating) anyone who openly opposed the religious dictatorship. These government approved thugs were a common feature of dictatorships (Nazis and communists both used them). By the 1990s the government had organized street gangs, composed of young men who are Islamic conservatives, paid to break up pro-reform demonstrations by force and attack any groups that openly oppose the government for whatever reason. There has always been the risk that a series of street brawls could escalate and lead to another mass revolution like the one in 1979. So far that has been avoided but more and more of the young men who were prime candidates to join these gangs have changed sides. Once more there are protests and even attacks on local religious leaders in towns and cities that do not have a lot of religious conservatives, or a local Islamic conservative militia unit.
The militia had a name; the Basj, which provided the manpower for pro-government street gangs since the 1990s, when popular protests against the dictatorship became more common and threatening. The Basj is actually part of the IRGC
(Iranian Revolutionary Guard Corps) whose main job is to protect the religious rulers from any internal threat (including from the national police or regular armed forces). Although the Basj officially has 11 million members, less than ten percent of that number can actually be depended on. There are about 700,000 Basj who can be activated quickly and used to suppress public protests by force or intimidation. About 15 percent of the Basj are full time and these “leaders” are having a more difficult time finding reliable Basj members to do the dirty work. Most Basj members joined to protect Iran from foreign foes, not fellow Iranians. A lot of Basj members are out in the streets protesting and this creates some interesting discussions between protestors and the Basj sent to disperse the protest. In many areas of Iran, the local Basj can no longer muster much of a street gang. Sending a few Basj (the full-time leaders) to deal with a protest does not work.
A major cause of the declining Basj morale is the government admitting that there has been a lot of corruption. Yet no clerics and few family members of clerics have been prosecuted and convicted. Most Basj know from personal experience that the ruling clerics and their growing families account for a lot, if not most, of the corruption. The government efforts to blame it all on non-clerics has not gained much traction and is apparently having the opposite effect. That’s largely because the government cannot control the Internet. Embarrassing news about corruption in clerical families gets around, often accompanied by pictures and video. This is no centralized conspiracy to discredit the religious dictatorship but a popular effort to find out more about who the crooks are. As a popular movement, these online “journalists” are impossible to stop. There is no leadership or centralized organization directing this growing evidence collecting and publicizing of the corruption the government will not prosecute.
One response to this has been some dramatic adjustments to government spending. The IRGC budget for foreign operations (especially Syria and Lebanon) have been cut, apparently in a big way. The Iranian mercenary force in Syria is undergoing a reorganization and downsizing. The IRGC explains this away by describing it as a “redeployment for the attack on Israel.” The reality is that there is a lot less cash to pursue that goal and the IRGC is actually trying to avoid more airstrikes by Israel which continues to win this war with Iran. In Lebanon the well-established (since the 1980s when founded by the IRGC) Hezbollah has done the unthinkable and is asking the public for donations because Iranian subsidies have been cut, apparently drastically. The Iran government is spending more money to relieve the economic problems most Iranian face. But that won’t be enough as it has become common knowledge (again, via the Internet) that Iran has fallen behind the rest of the world economically and in a big way. All those expatriate Iranians report this in various ways and provide personal testimony (with lots of pictures and video). Life is usually much better for Iranians outside of Iran.
While the government prefers to blame the sanctions and the revival of many sanctions by the Americans, for many of Iran’s problems most Iranians note that life did not improve much within a year of sanctions were lifted in 2015 and the reason was internal. That realization triggered growing popular anti-government protests that just get worse. Actually, it gets worse than that because neighboring Iraq, which Iran hoped to annex or at least turn into a compliant client state, is not cooperating. In part, because Arab Shia have always disliked the Iranian (Indo-European) Shia and vice versa. Iraqi Shia get regular reports of how badly Iran still (after thousands of years) treats its Arab minority. So while the Shia dominated government of Iraq pretends to be friendly and grateful towards Iran it is becoming obvious to Iran that this is all for show and not real. Opinion polls in Iraq make it clear that most Iraqis are hostile to Iran and Iranian intentions. These suspicious attitudes are on the rise. This does not mean the Iraqis are above making some cash in somewhat questionable transactions. But bending the knee to Iran is not on the menu.
For Arabs, the scariest thing about Iranians is that seem to be better at admitting mistakes and changing their ways. That is why Iran has been the local superpower for thousands of years. History has shown repeatedly that Iran is its own worst enemy but also capable of recovering from the most devastating self-inflicted damage. If Iran gets into recovery mode (which the ruling clerics want to avoid) the local Arabs are in big trouble. So the Arab policy towards Iran is to be polite and try to keep them corrupt and ineffective. That may not work because a growing number of senior Iranian clerics are admitting what the real cause of Iranian woes is and it is among the senior religious establishment. It is one of those “we have met the enemy and it is us” moments that are so common in Iranian history.
There are a number of complications in Syria that have led to a stalemate. Iran has problems with Israel in Syria, as well as its own allies. The Iranians want the Syrian government (controlled by the Assad clan) to accept Iranian domination (as Hezbollah does in Lebanon) and agrees with Turkey the Syrian Kurds should not get autonomy and should accept rule by the Iran backed Syrian government as well as Turkish control of border areas. Iran has a major problem in that no one wants them in Syria much less acting as an occupying military force in Syria dedicated to starting a war with Israel.
The Russians would prefer that the Turks and Iranians got out of Syria and that the Assads and Kurds worked out a compromise (which the two seem willing to do). The Americans, Israelis and most other Middle Eastern nations agree with this approach.
Israel wants Iran out of Syria and would prefer that the Kurds got their autonomy. Israel is willing to make a peace deal with Syria and Turkey. Israel has successfully attacked Iranian efforts to build a military infrastructure (bases, arms factories, forces on the Israeli border) in Syria and this has made the Iranian leadership angrier and very frustrated. Iran is seen as even more unstable and unpredictable than Turkey.
Russia has taken the lead in brokering agreements that would solve most of these disagreements. So far there has been limited success with only Israel willing to work with Russia. Israel and Russia have been cooperating in Syria for years but Turkey and Iran are determined to have their way despite the opposition they are encountering.
The current effort to negotiate a peace deal with the Taliban in Afghanistan is not popular with Iranians. The Taliban are seen as inherently anti-Iranian. Iran also has issues with the Afghan drug gangs, who continue to produce, with Pakistani cooperation, all that heroin, opium and hashish. Much of it gets out of Afghanistan via Iran and that has turned the Iran/Afghan border into an increasingly bloody battle zone.
March 21, 2019: In the southeast (Sistan-Baluchistan province on the border of Pakistani Baluchistan) IRGC troops were pleased to hear that Pakistan had rescued four Iranian soldiers who had been taken in October 2018 by Iranian Sunni Baluchi separatists. Pakistan handed over the four Iranians. The search is still on for all the Iranian rebels responsible and who operate from bases in Pakistan and frequently cross the border to carry out attacks in the IRGC forces who guard the border. During the 2018 incident the separatists took prisoners and got them out of the country. Pakistan reported that the four were found being held in an area where the borders of Iran, Afghanistan and Pakistan met and rescued by Pakistani commandos. This violence has been going on for decades and never needed any outside assistance to keep going. Pakistan keeps getting blamed for the continued presence of Iranian Sunni separatists in Pakistani Baluchistan. Pakistan tries but the Baluchis live on both sides of the border and Iranian and Pakistani Baluchis want to create an independent Baluchistan that includes a chunk of southeast Iran where most of the Iranian Baluchis live. One of the usual suspects, Iranian separatist group Jaish al Adl, is particularly hated by the Iranians. In late 2018 Iran threatened to send troops across the Pakistani border to find and destroy Iranian Jaish al Adl camps in Pakistan if the Pakistani security forces did not take action and neither did the IRGC.
March 20, 2019: The government revealed and praised an agreement with Turkey that enables joint Iranian-Turkish military operations against Turkish and Iranian Kurdish separatists. The most recent operation was against Turkish PKK groups operating on both sides of the Turkish/Iranian border.
An Iranian student group has documented and publicized another incident of corruption among senior clerics. This one involved stealing real estate in a very expensive Tehran neighborhood. Since the government is officially cracking down on corruption anyone who compiles convincing proof of corruption can put the special anti-corruption prosecutors in an embarrassing position. This is especially true now as the government has been forced to allow prosecution of senior clerics and their family members for corruption or face even more popular anger. There are other side effects to these corruption prosecutions. Some of the accused will document other misbehavior of the government (like support for foreign or Iranian Islamic terrorist groups) as part of their defense.
March 15, 2019: Russia apparently supplied Iran with the “zero click” cell phone hacking tech which Iranians recently used to hack the phone of an Israeli politician. It’s unclear if this was an authorized transfer of technology to Iran or an illegal one. Both methods are used for Iran to get needed items from Russia.
March 14, 2019: Dozens of Iranian UAVs were seen in the air near the Strait of Hormuz. Iran described it as practice for a mass UAV attack on Israel, using about ten stealthy (based on a captured American RQ-170s UAVs) and many more conventional designs. Iran regularly tests Israeli detection and defenses against their UAVs by having Hezbollah fly one into Israel from Lebanon or Syria. Iran believes it has detected an Israeli vulnerability although those test flights also provided Israel with a list of improvements they can make in their ability to deal with these UAVs. Israel is bombing Iranian weapons construction and storage facilities in Syria and Lebanon to prevent such a UAV attack from being launched from those two countries, which would be more difficult to deal with than one launched from Iran (which would have to be one way.)
March 13, 2019: Israeli intelligence released aerial photos showing construction of what Israel describes as an Iranian weapons factory in western Syria (outside the port of Latakia). Israel also released aerial photos of a similar missile plant in Iran.
March 12, 2019: Iran and Iraq have agreed to reestablish railroad connections and revive the 1975 treaty that settled long standing disputes over joint use of a waterway that served as part of the Iran-Iraq border.
March 11, 2019: Iran awarded the commander of the Quds Force, Qassem Soleimani, the nation’s highest award. Quds is the IRGC branch that stirs up and sustains pro-Iran terrorism overseas. Quds is largely responsible for terrorism attacks against Israel and for the very expensive Iranian efforts in Syria, Lebanon, Yemen, Iran and many other lesser operations (like in Venezuela). Quds recently had its budget cut drastically and the clerical leadership wanted Soleimani to know that it wasn’t personal.
March 10, 2019: A senior Iranian cleric spoke out against the conditions in Iran that cause the best educated and most capable Iranians to emigrate and not come back because economic and other opportunities are much better in the West. Some Iranian economists have put a price on this calculating that the loss of 150-200,000 Iranians a year to migration costs Iran over $100 billion a year. Opinion polls show that about two million Iranians want to immigrate. The college educated are the most likely to do it because the unemployment rate among the college graduates is about 20 percent.
March 9, 2019: The government is trying to revive its maritime smuggling routes to Syria by obtaining port management agreements with Syria. Iran is running into resistance from Russia as well as Lebanon who fear that this will turn the local coasts into a combat zone as Israel and the Americans put intensive and heavily armed, scrutiny on the area. Although the Assad government will not openly defy Iranian requests it has learned how to quietly cooperate with other nations, especially Russia, that will be blunt with Iran in opposing Iranian proposals seen as too dangerous to work.
March 2, 2019: Israeli media is reporting the presence of Iranian mercenaries based near the Israeli border, with most of these Iranian forces east of the Golan Heights portion of the border. It is also believed that Iran still has Hezbollah members, pretending to be Syrian soldiers, operating an Iranian observation post along the Golan Heights border to keep Iranian commanders current on what is happening on both sides of the border. Iran believes many Syrian civilians and even Syrian soldiers along the Golan border are not fans of Iran. Actually, Israelis have seen examples of this increasingly since 2011.
March 1, 2019: Because of the air battles in Kashmir between Pakistan and India Afghan air transports could not use Pakistani air space to reach India. For the first time Iran allowed Afghan transports to reach India via Iranian air space (to the Indian Ocean and then east to India.) This took a lot longer (and was more expensive in terms of fuel and other operating expenses). Via Pakistan, the flights take 90 minutes. Via Iran, the same flights take 300 minutes. Thus passengers had to pay $300 to fly to India versus the usual rate of $160. The air space closures lasted until late March.
February 27, 2019: Iran recently announced it had built a new type of submarine, the 660 ton Fateh. Iran claims this sub could remain submerged up to 200 meters (650 feet) for up to five weeks, apparently using a periscope length snorkel (a pipe type device to bring in air and expel diesel engine fumes) and fire locally built Hoveizeh cruise missiles (with a range of 1,300 kilometers and able to reach Israel). Hoveizeh was designed to be fired from a truck but Iran implies it has developed a version that can be expelled from a torpedo tube, get to the surface and get into the air. No evidence of that being tested yet. Iran has announced plans to build Kilo type subs but no such activity has been detected. For the last five years, Iran has been working on the 1,200 ton Besat but it is unclear when this sub will be completed. The Fateh may be an intermediate step in attempting a larger boat like Besat that is similar to the Kilo.
February 23, 2019: In Syria, the commander of Iranian forces in Syria said that 90 percent of Iranian goals had been achieved and Iran was now concentrating on rebuilding the Syrian armed forces. Not mentioned was any efforts to destroy Israel and this was deliberately downplayed in an effort to avoid more Israeli airstrikes. Iran has withdrawn its forces from the Israeli border and has greatly reduced weapons shipments to Syria. The Israelis are still watching and apparently still willing and able to launch airstrikes on Iranian forces.
In northern Sinai (Gaza), Qatar, an Iranian ally that has provided Hamas (which runs Gaza) with over $1.1 billion in aid since 2012, has told Hamas that it is halting it $10 million monthly payment to keep the Gaza electrical supply system operating. Over the last year Qatar has cut most cash aid to Hamas. Partly this is because it is so difficult to get the cash into Gaza but the main reason is that Qatar wants the cash to go towards improving the economy and living standards for Gaza residents. Iran backs Hamas in preferring to use most aid, especially cash to improve military forces and the ability to carry out terror operations in Israel and Egypt. Qatar continues to provide cash for Gaza, but only if Qatari officials can supervise the use of that money. This restricts the ability of Hamas to divert the aid to military projects.
February 22, 2019: Commercial satellite photos appear to show that Iran attempted, and failed, to launch another satellite into orbit in late January.