Iran: The Charm Offensive

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October 8, 2013: President Hasan Rouhani has agreed to resume negotiations later this month regarding the Iranian nuclear program and the UN sanctions meant to halt it. Rouhani made it clear during a visit to UN headquarters in New York City in late September that Iran was willing to negotiate an end to the severe economic sanctions imposed in 2012. The sanctions are doing major damage to the Iranian economy and Rouhani has dropped the official line that Iran was coping. Iran is not coping and that is no secret.

Since the sanctions began in June 2012, the prices of imported consumer goods has increased 40 percent. Most countries pressuring Iran to halt its nuclear program don’t believe Rouhani is really willing to make any real concessions (like admit they have a nuclear weapons program and allow inspectors to monitor dismantling of that program) but will show up to talk anyway, just in case. Rouhani has to do something, because the usually clever Iranians have not been able to find their way around the 2012 sanctions and losing more than half their usual oil income has been a major problem. Oil accounts for 80 percent of exports (the source of foreign currency to buy foreign goods) and half the government budget. Before the new sanctions Iran allowed imports to climb from $39.1 billion to over $60 billion in the last 7 years, in order to keep unrest (against the corrupt religious dictatorship) down.

Now that import policy is being reversed and Iranians are encouraged to be more self-sufficient. This is not popular and often not possible. Not only are popular imports (consumer goods and food) 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 over 20 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). Consumer goods now comprise 80 percent of imports and Iran is trying to arrange barter deals with major oil buyers, like India and China. But neither India nor China have a lot of food to export and buying food from other nations and then passing it on to Iran is too likely to be discovered and cause sanctions on anyone using this scam. India has tried paying its oil bill in its own currency (rupees), but the international market for rupees is too thin to make this work and Indian imports of Iranian oil have fallen more than 50 percent in the last year.

Meanwhile, Iran is under a lot of financial pressure in Syria. There, despite the high desertion rate in the Syrian military, the government has replaced these losses with militias formed from their core supporters (Alawites and other religious minorities like Christians and Druze). Iran is key in making this happen, as they have trainers (from the Quds Force) with experience in organizing these types of militias (especially in Iraq). Iran also provides cash to pay many of the militiamen. It’s only a part-time job (guarding their neighborhoods as well as checkpoints and military bases in the area) but the economy is a mess and a little cash means a lot. The rebels have gotten some similar aid from foreign allies (mainly Arab oil states) and the West but not as much as Russia and Iran have provided. The heavy losses in weapons and ammunition Syrian forces have suffered in the last year have made new supplies of weapons and ammo from Russia and Iran essential. This aid is keeping the Syrian Air Force operational, although most of the bombing attacks are purely terror, with aircraft dropping bombs in towns and neighborhoods known to be pro-rebel. Iran is also allowing Syria to fly some of its warplanes to Iran where they are safe from NATO air raids. This, of course, required Iraq to allow the Syrian aircraft to use Iraqi air space to reach Iran. That sort of thing gets Iraq in trouble with its Western aid donors and that means Iran has to spend more money bribing Iraqi politicians to deal with that problem.

October 6, 2013: The government revealed that it had arrested 4 employees of one of its nuclear facilities and charged them with planning to commit sabotage. No more was revealed other than that the 4 were still being questioned.

October 5, 2013: Tunisia announced that, unlike Egypt, they allowed and encouraged Iranian tourists. Fewer Iranians can afford overseas travel these days because of the severe new sanctions imposed in 2012, which sharply cut the amount of foreign currency Iranians have access to.

October 2, 2013: In the last week Iran and Iraq signed at least two military cooperation agreements. These involved joint training and Iran providing training for Iraqi specialists. The two countries will also allow trade between the two countries in locally made military equipment. Mainly that means Iraq buying Iranian weapons. There has long been informal cooperation of the same sort that is now part of the formal agreements.

October 1, 2013: Tourists from Iran will no longer be allowed into Egypt because anti-Iran sentiments are on the increase (because of fears that Iran is helping some Islamic radicals or Shia efforts to convert local Sunnis to Shia Islam).

September 30, 2013: Israel revealed that it had recently arrested an Iranian, who was a Belgian citizen, as a spy. He was recruited by the Iranian Quds Force (which runs overseas terrorist operations) and promised a million dollars if he could help organize terror attacks inside Israel. The arrested man contends that he was the victim of an Iranian extortion scheme to force him to spy.

September 29, 2013: The head of Iran’s Cyber War force was killed by gunmen on a motorcycle. Israel is being blamed.

September 24, 2013: Israel made public its fears that Iran was trying to deceive the world into thinking its newly elected president represented a change in Iranian policy. Israel believes Iran is still committed to developing nuclear weapons and is trying to get economic sanctions (that have been very effective) lifted any way it can, but without actually halting the nuclear weapons program.

September 22, 2013: During a parade in the capital the military had 30 long range (at least 2,000 kilometers range) missiles roll by (12 Sejil II and 18 Ghadr 110 missiles). 

 

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