Economic problems are getting
worse. In the United Arab Emirates (UAE), where much of Iran's foreign trade is
handled, local banks are refusing to do business with the 10,000 Iranian trading
firms based there. This has caused delays and cancellations of Iranian imports (over
$9 billion worth from the UAE last year) and exports. This is being felt by the
rule elite in Iran. There, the large extended families of the clerical
leadership live the good life, and the goodies come in via the UAE. The sudden
shortages of iPods, flat screen TVs, automobiles and bling in general, has been
noticed in Iran, and is not appreciated.
price of oil is producing another problem, national bankruptcy. The government
admits that if the price of oil falls below $60 a barrel (which it has) and
stays there (which it may, at least until the current recession is over), the
nation will not be able to finance foreign trade (which is already having
problems with increasingly effective U.S. moves to deny Iran access to the
international banking system), or even the Iranian economy itself. The latter
problem is largely self-inflicted, as president Mahmoud Ahmadinejad desperately
borrows money to placate his few (heavily armed and fanatical) followers (about
20 percent of the population). The rest of the population has been in recession
for years, and is getting increasingly angry over Ahmadinejad's mismanagement. Some
80 percent of Iran's exports are oil.
2008: In northwestern Pakistan, an Iranian diplomat was kidnapped, and his
bodyguard killed. Iran invoked the Vienna convention of political immunity of
diplomats, and insisted the Pakistan take aggressive action to free the
2008: The government claims to have test fired a new, two stage solid fueled
ballistic missile, with a range of 2,000 kilometers. If true (and there are
some doubts), this would not change much. Iran already has over fifty older
Shahab 3, liquid fuel, ballistic missile, which also have a range of 2,000 kilometers.
Iran has bought the technology to produce solid fuel rockets (basically slow
burning explosives, but made in such a way that they provide precise power for
any kind of rocket), and has been increasing its capabilities in this area for
about a decade.
2008: There are still 2.8 million Afghans living in the country, and only 35
percent of them are there legally. The rest have come to Iran to take jobs
Iranians won't do, or simply to escape the banditry and drug lords that
dominate western Afghanistan. Many of these Afghans have lived most of their
lives in Iran, having fled Afghanistan in the 1980s to escape the invading
Russians. This large Afghan population provides cover for numerous criminal
gangs, especially those involved in the heroin trade. Some 90 percent of the
worlds heroin and opium comes from Afghanistan, and about a third of that is
exported via Iran. This has led to a small war being fought in the Iran-Afghan
2008: Sixty Iranian economists (mostly academics) signed an open letter to president
Mahmoud Ahmadinejad, criticizing his economic policies. The economists also
criticized Ahmadinejad's nuclear weapons and foreign policy, which has brought
about increasingly effective sanctions. The economists condemned current
government policies that do little to promote economic growth. What was not
mentioned in the letter was the corruption and diversion of vast sums to the
few Iranians who support the government. But everyone already knows that. And
those who talk about it in public go directly to jail.
2008: The U.S. has cut off all Iranian access
the U.S. banking system. This is a big deal, because many transactions, like Internet
traffic, have to at least pass through the U.S. banking system in order to be
completed. Now it's even more difficult (time consuming and costly) for
Iranians to do business overseas. Iran currently imports about $60 billion
worth of goods a year (up from $21 billion in 2003).
2008: In another blow to the religious radicals that control the Iranian
presidency, the more moderate parliament removed the Interior Minister, who had
been caught claiming to have a degree from Oxford University, when he did not.
Normally, this sort of resume enhancement would be overlooked. But president Mahmoud
Ahmadinejad has made himself very unpopular with his radical policies
(especially economic ones, which have been generally more destructive than
constructive.) To make matters worse, a presidential aid was also dismissed,
for attempting to bribe members of parliament to back off from impeaching the
Interior Minister. Ahmadinejad rose to power by opposing corrupt practices. But
since he has reached the top, he has changed. This has been noticed.
2008: Nationwide celebrations were held
to commemorate the 1979 takeover of the U.S. embassy in the capital. This was a
serious breach of international law, but is still celebrated in Iran as a
national victory. This is one of the reasons why all subsequent attempts (numerous
and frequent) to negotiate with the Iranians have failed. The Iranians believe
that international law is an inconvenience, and does not really apply to a
nation on a Mission From God (converting everyone on the planet to the Shia
brand of Islam.) Foreign diplomats keep hoping the Iranian government will
change its mind and play by the rules. But so far, no joy.
2008: The government is buying fifty
An-148 transports from Ukraine. These aircraft are similar to the Boeing 737,
and can carry about 80 passengers up to 5,000 kilometers. They cost about $20
million each. The An-148s can also move troops and military cargo around.
2008: Iranian merchant ships, which largely handle cargo moving between other
countries (the many trade sanctions placed on Iran for misbehavior make trade
directly with Iran difficult), have been ordered to obtain barbed wire, and
place it on the railings of the main deck, if the ship is moving through the
Gulf of Aden. Most Iranian cargo ships do, as most Iranian trade still moves
through the Suez canal (which is reached by going through the Gulf of Aden and
then into the Red Sea.) Crews have been ordered to post extra lookouts whenever
the barbed wire is deployed, so the Somali pirates can be spotted in time to have
the ship speed up and possibly outrun the pirates.
2008: The government announced the
opening of a new naval base near the port town of Jask, which is located at the
entrance to the Persian Gulf (the Straits of Hormuz). This is not a big deal,
because the Iranian Navy is a patchwork of obsolete, and largely unreliable warships, and
over 200 armed speedboats. There are fewer than 30 "major" warships
(over 1,000 tons displacement), led by three Russian Kilo class subs and some
ancient destroyers. Iran constantly announces new ships, built in Iranian
shipyards, but intense searches via Google Earth (and travelers passing Iranian
naval bases with cell phone cameras) have failed to detect most of these
vessels. Given the Iranian tradition of announcing new weapons that never show
up, it is believed that the Iranian navy is what it appears to be, not much.
The hundreds of speed boats are, however, often manned by religious fanatics capable carrying
out suicide missions. Many of these speed boats can carry several hundred
pounds of explosives, in addition to several suicidal Iranian sailors. This
makes each speed boat the equivalent of an anti-ship missile. However, all the
Western and Arab warships in the region (which far outstrip the Iranians in
numbers and combat power) practice dealing with suicidal speedboats. Thus the
Iranian navy is a danger only if you are dumb enough to not plan and practice
how you can deal with it.