Many Iranians consider Iraq and Afghanistan as part of “greater Iran” because both those areas were once part of an Iranian empire (along with most of Pakistan and a large chunk of Central Asia). Since the violently anti-Shia (and anti-Iran) governments were removed from Afghanistan (in 2001) and Iraq (in 2003) Iran has expanded its influence there at the government and ground level. Diplomatic relations were improved and much charity work was undertaken. But the charity came with strings; recipients were restricted to those who were pro-Iran or willing to be. This made it much easier to recruit spies and terrorists, or just mobilize a large pro-Iran (or anti-American) demonstration. Iran has always preferred the long game and knows that if it keeps at it, eventually Iraq and Afghanistan will become, if not part of Iran, than very cooperative with Iran.
The sanctions are hurting in politically uncomfortable ways. The sharp drop in oil exports has seen the cost of imports more than double (because of the loss of oil income and plunging value of the Iranian rial). Oil accounts for 80 percent of exports (the source of foreign currency to buy foreign goods) and half the government budget. In order to keep unrest down, the government allowed imports to climb from $39.1 billion to over $60 billion in the last seven years. Now that is being reversed, and Iranians are encouraged to be more self-sufficient. This is not popular. Not only are popular imports (consumer goods and foods not produced in Iran) more expensive, or unavailable, but many essential raw materials or components needed for local manufacturing are missing as well, causing factories to shut down and increasing (to nearly 30 percent) unemployment. Inflation is 25 percent and increasing. Even using smugglers doesn’t help, because there is a lot less money available to pay the foreign suppliers (who won’t take Iranian currency).
One foreign country where Iranian cash is still popular is Syria, where thousands of Iranian military and intelligence personnel try to keep the Assad dictatorship in power. Rebels report (and pass on cell phone pictures) of cash seized from captured soldiers or pro-government militiamen. Some Iranians have been captured as well, but Iran is apparently pouring a lot more money into Syria and, because of the sanctions, it can no longer afford to send dollars and other foreign currencies. Few of the Iranians are involved in direct combat and many are serving as bodyguards for senior government officials (Syrians can no longer be trusted for this sort of work).
The loss of Iranian oil is not being felt in the global oil market. Libya, Iraq, and Saudi Arabia are pumping more oil and the rapidly growing American and Canadian production of oil and gas from shale formations is sharply reducing demand in North America. In the past, Iran thought oil export sanctions would not work because of growing demand and tight supplies. That situation no longer applies, and the growing use of shale based oil and gas world-wide will keep supply ahead of demand for some time to come. Iran is trying several schemes to circumvent the oil export sanctions but is finding that the sanctions quickly catch up.
The EU (European Union) has imposed additional sanctions on trade with Iran. The restrictions make it more difficult for banks and suppliers (of just about everything) to deal with Iran. The huge increase in sanctions this year have overwhelmed Iran’s extensive smuggling network. More of the smugglers are being caught or driven out of the business because of increased scrutiny (by financial regulators and customs inspectors).
President Ahmadinejad is now feuding with the judiciary (which is directly controlled by the senior clerics who have veto power over anything the elected government does), which will not allow him to visit a prison where one of his senior aides is being held.
Iran continues to deny it had anything to do with Cyber War type attacks on Western banks and Saudi Arabian oil operations. The attacks have been low grade stuff and the release of a vicious virus (that deleted hard drive data on over 30,000 Saudi PCs) in August are believed to be the work of a small group of amateur hackers (who support Islamic terrorism and Iran). Iran is developing a Cyber War ability, but mainly to defend itself. Meanwhile, Iran, Syria, and Lebanon are still suffering from stealthy software that monitors what happens on infected PCs. This “Flame” software is believed to have been created by the United States and Israel.
The government has denied that it has agreed to secret talks with the United States over the sanctions and Iran’s nuclear weapons program.
October 24, 2012: The army and air force announced plans for a large-scale exercise on the Iraqi border.
October 23, 2012: Sudan reported that one of their ammunition factories blew up and blamed an Israeli air raid. Many Sudanese believe the bombed factory actually belongs to Iran and was part of an Iranian weapons smuggling effort that supplies Islamic terrorists throughout the Middle East. Israeli officials refused to comment. Israel did carry out a similar raid 18 months ago. Israel repeated its criticism of Iranian weapons smuggling via Sudan, which Iran denies.
October 22, 2012: Two European satellite TV and radio providers invoked sanctions on Iran and halted delivery of Iranian programming outside Iran. Syria and Iran then began quietly jamming BBC, France 24, Deutsche Welle, and the Voice of America broadcasts, via radio and satellite, to Iran and Syria (who denied they were jamming). There is ample evidence that the jamming is coming from Syria and Iran.
October 19, 2012:
A bomb went off in a Christian neighborhood in the Lebanese capital, killing a senior security official (and seven others) who was openly anti-Syria (and anti-Assad and anti-Iran). This angered many Lebanese who are still bitter about decades of Syrian interference in Lebanese affairs. Hezbollah has long used non-Shia allies, as well as Syrian agents, to carry out attacks on political rivals. This attack led to more gunfire between pro and anti-Syria factions in Lebanon. Iran is believed to have approved the attack, as they do any major Hezbollah operation. Iran media blamed Israel and the U.S. for the attack, which is a normal reaction in Iran (which blames Israel and the United States for the rebellion in Syria). Most Iranians consider it their right (and responsibility), as the regional superpower to interfere in Lebanon, Syria, Iraq, Afghanistan, and anywhere else in the area. What Iranians do not like is their government spending a lot of money on these operations. The billions spent to prop up Hezbollah in Lebanon and the Assad dictatorship in Syria is not popular at all.
A suicide bomber set off his explosives at the entrance to a mosque near the Pakistani border, killing himself and two guards.
October 18, 2012: The United States announced rewards for the capture of two senior al Qaeda officials believed hiding out in Iran. Al Qaeda financier Muhsin al Fadhli now has a $7 million price on his head and $5 million for his deputy, Adel Radi Saqr al Wahabi al Harbi.
October 17, 2012: Turkey is prosecuting two Iranians for espionage.
October 16, 2012: The government claims that Iranian UAVs, flying out of Lebanon, have made dozens of recon sorties over Israel. An Iranian UAV was shot down over Israel on the 9th and Israel doubts that any other Iranian UAVs have been able to sneak in undetected.