Iran: Desperately Seeking Success

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November 30, 2018: The economic and political apocalypse caused by decades of corruption and revival of economic sanctions has become the focus of government attention. The resumption of sanctions created major declines in economic activity months before the trade curbs actually went into effect. Iranian GDP is expected to decline nearly two percent this year and at least four percent in 2019. Inflation rose faster than expected and hit 35 percent in November rather than sometime in 2019. The inflation is mainly the result of shortages of essential items, like medicines and many consumer items. Food is getting more expensive. The shortages and rising prices are mainly because the rial has lost over half of its value compared to the American dollar. In late November one dollar cost 120,000 rials on the black market versus the official (government) rate of 42,000 rials. Foreign currency market analysts believe the official rate is about half what the real rate is and that more extreme rates are more about so many Iranians participating in currency speculation than anything else. That explains the peak of the speculation in October when it briefly hit 190,000 rials per dollar. The government does not have enough dollars to meet demand and increasingly the black market rate is all anyone has access to. Because of that, the speculation driven peaks don’t last but they do contribute to the general uneasiness about the economic future. Iran is now trying to ban the use of dollars inside Iran.

Most trade is conducted in dollars and Iran, because of the renewed sanctions, is no longer a welcome trade partner. Thus since October prices for basic goods in Iran have gone up nearly 50 percent. Inside Iran the financial situation is made much worse by the accumulated bad debts created by decades of corrupt business deals. Those uncollectable debts and the continuation of the corrupt business deals that create them leaves the banking system unable to be much help in hard times. Smuggling has increased but that has a minor impact on the situation.

A more visible cause of the economic crises is public protests against specific incidents of corruption. These are most often companies privatized in the last few years in response to complaint about how government owned companies were often run by managers selected more for their loyalty to the religious dictatorship than to for their management abilities. Privatization did not change that because corrupt officials in charge of the process often saw to it that companies were sold, for less than what they were worth, to people with the right connections to senior clerics or other government officials who were willing to tolerate corrupt behavior if they got some of the money involved or similar help in doing favors for their own supporters or kin. Because of the sanctions more of those illegally privatized companies, which were doing poorly in the best of times, have now collapsed and the employees are protesting, often for months, got get back pay and other benefits the new owners have made off with, some of them even fleeing the country. The government can keep details out of the state-controlled media but this bad news, complete with video and regular updates, circulates on the Internet. While many of the continuing public (and illegal) protests are against the government, in general, many are about specific economic issues (workers owed back pay, civil servants and professionals demanding a living wage in the face of growing inflation)

Iran is not without allies in its efforts to evade the new sanctions. The largest obstacle is being cut off from the international banking system, mainly SWIFT, the world's largest international electronic funds transfer system. Iran can get around this, but it will be more expensive and more of a hassle and often a major obstacle. There have been proposals for Russia, China, Iran and anyone else interested to establish a separate international payments system based on the Chinese currency (the yuan). But even Chinese bankers will explain (off the record) that this would not work because, compared to the dollar, the yuan is much less stable and subject to wide and unexpected changes in value (compared to other currencies). One reason the dollar has become the primary currency for foreign trade is because it is the most widely accepted, used and, most importantly, stable of the major currencies. European countries opposed to the resumption of sanctions are establishing a barter system for Iran, to help get around the sanctions. The Americans see all these moves as fair game for U.S. countermeasures. Germany, France and Britain, who continue to honor the 2015 treaty, have attempted to get around the dollar access problem by establishing the SPV (Special Purpose Vehicle) an organization that would arrange barter deals between European firms and Iran to pay for Iranian oil imports. The viability of this is uncertain because the Americans point out that they will consider any organization using SPV as violating the American sanctions and thus subject to penalties (like no more access to SWIFT). Germany and France later said they would host the SPV but have not officially done so yet.

China has set up a system of banks to avoid sanction restrictions and pay Iran for the oil. The Americans have not gone after this Chinese system in the past but Iranians fear that this time might be different.

Blowback

While Iran has shifted most of its hostile propaganda towards Israel and America lately (because of the sanctions and the embarrassing situation in Syria) the Arab states in the region are still well aware of how Iran continues seeking to dominate or even occupy and rule some of its Arab neighbors. That led to these Arab states accelerating their growing economic and military relationships with Israel. These growing links had long been kept secret or simply denied. The Iranian threat made it possible for Arab governments to go public with their efforts to make an ally out of Israel as well as a trade partner. Arab rulers knew this shift was coming but after decades of anti-Israel propaganda, it was difficult to go public with these activities. Now it is and while there is some resistance, a surprising number of Arabs see the alliance with Israel as a plus. The irony of this was that before the 1979 revolution in Iran, Israel and Iran were on very good terms with each other. But now Iran denounces the alliance between Arabs and Israel and that sort of talk keep the Israeli-Arab alliance going.

Syria

Israeli military leaders believe they are winning their battle to keep Iran from establishing a permanent presence in Syria. This has been achieved via a combination of force (air and artillery strikes on Iranian forces in Syria) and diplomacy (convincing Russia to persuade Iran to keep their forces 100 kilometers from the Israel border or suffer Israeli attacks the Russians will not interfere with). Other diplomatic activities involved the Americans and Arab nations. There is general agreement by Israel and their Arab allies that the forces Iran has assembled in Syria and Lebanon are a far greater threat than Hamas. But this war is not yet won and whether it is depends more on what happens in Iran. As a practical matter, no one is really winning in Syria. The Turks are thwarted (by the U.S.) in their effort to destroy the military power of the Syrian Kurds. Turkey still has a problem with over a million potential refugees in Idlib province trying to get into Turkey if the Idlib showdown cannot be settled peacefully). Syria and Iran don’t care if there is a bloodbath in Idlib they just want to get it over with. No wonder Turkey doesn’t get along with Iran and their sidekick Syria. Russia is in Syria mainly to sell its new and expensive weapons and create some positive propaganda for the folks back home. That is done by not doing anything that makes Russia look foolish or gets Russian troops killed. That is difficult to do with allies like Iran, Syria and the current Turkish government. Russia does not want to fight anyone who can fight back; especially Israel or the Americans. At the same time Russia wants to appear unafraid of the Israelis and Americans. ISIL (Islamic State in Iraq and the Levant) is still around as are many less fanatic Islamic terrorists.

Iraq

The anti-Iran election results created some initial confusion among Iranian leaders but that is gone now and Iran is pushing Iraq hard to ignore the American sanctions and help Iran evade them. Iraq is cooperating, but not out of sympathy for or fear of Iran but because there is money to be made helping Iran out. This is a dangerous game because the Americans can respond by going after the Iraqi corruption in addition to invoking banking and other financial restrictions. At the moment most Iraqis see the Americans as the good guys and the Iranians as the bully next door, and often just down the street because pro-Iran PMF (Peoples Mobilization Forces) commanders are being more aggressive with the army and any Iraqis who openly oppose Iran. This risks civil war in a country that has a minority of the population willing to use violence to support Iran. Pro-Iran PMF militias take orders from Iran and that is increasingly unpopular with most Iraqis. Iraqi leaders have been subjected to a lot of pressure from Iran to ignore the American sanctions. Iran pointed out that complying with the sanctions would hurt the Iraqi economy. That pressure caused Iraqi leaders to comply with the more immediate threat (Iran) even though they realized that most Iraqis preferred the Americans to the Iranians. After all, when Iraq asked the Americans to leave in 2011 they did. Iraq is seeking an exemption to some of the Iran sanctions because otherwise, the Iraqi economy would suffer. No American response yet but Iraqi economists and financial experts have made it clear that the Americans have a lot of options and many of them involve going after individual pro-Iran Iraqi leaders, especially those who are the most corrupt. Sanctions on individuals have proved very effective and Iraq has a lot of eligible targets.

Yemen

The rebel coalition is visibly dissolving. The non-Shia tribes and groups, especially those in and around Sanaa (the rebel-occupied national capital) are losing confidence in the Shia rebels and their leaders. Over the last year, a growing number of these non-Shia leaders have defected. Although the rebels deny morale and unity problems they recently made a public call for deserters, especially Shias, to return to the fighting. Army and coalition troops have reported that a shortage of rebel fighters have become a major factor in the rebels inability to resist ground attacks as effectively as they used to. For this reason, the rebels are eager to obtain a ceasefire or truce. This would enable them to rebuild their strength and be ready for another round of fighting. That is more likely than a peace agreement. The Shia rebels and their Iranian backers are both obsessed with self-destructive, and dangerous for bystanders, goals. The Shia rebels want their autonomy back. The Sunni majority in Yemen opposes autonomy or weapons for the Shia up north because those two things have made the Shia tribes a constant source of trouble for centuries. Iran wants world domination, starting with control of Saudi Arabia and most of the Middle East. Iran also seeks to destroy Israel and the United States. Neither Iran nor the Yemeni Shia have a reputation for honoring promises, treaties or anything that limits their activities. In short, negotiations may seem smooth but compliance will be in short supply. Expect both sides to resist implementing an actual, working, ceasefire or truce.

The Shia tribes never had the degree of Iranian support they have now. That support has included large shipments of Iranian ballistic missiles and rockets. These are primarily for use against Saudi Arabia. Because of that Saudi Arabia can both identify with what Israel is going through with Hamas and Hezbollah rocket attacks, because Iranian sponsored Shia rebels in Yemen have been firing rockets, ballistic missiles and, mortar shells and machine-gun bullets into Saudi Arabia for three years now, killing over a hundred civilians and soldiers on the border. The Saudis have found the American made Patriot anti-missile missiles very effective in stopping nearly all the ballistic missiles. The shorter range rockets are another matter and there have been discussions about obtaining the Israeli Iron Dome anti-rocket system.

This rocket and missile threat to Saudi Arabia will make negotiating a Yemeni peace deal difficult. The Yemeni Shia have always been hostile to the Saudis but now it has moved beyond that. The Saudis will not accept any peace deal that does not guarantee a halt to the rocket and missile attacks. That means more government control of the Shia tribal areas of Yemen than before the rebellion began. That will be difficult for the Yemeni Shia to accept but for the Saudis nothing less is acceptable. Continued rocket and missile attacks would be evidence of Saudi inability to defend its own borders and the Saudi citizens that live there. Iran knows this to but the UN is less concerned about that sort of thing.

One very under-reported Iranian contribution to the Shia rebel effort is an effective media manipulation effort. Not as massive or well-equipped as the ones created by China and Russia (the main practitioners of this) but the Iranians do pretty well spinning news of events in Yemen to favor, as much as possible, the Shia rebels. The Iranians know what appeals to mass media, especially in the West, and what does not. Thus anytime a coalition airstrike kills civilians (or rebels who can be described as such) the Iranians see that pictures and stories are supplied to news media worldwide. Coverage of the nasty things the Shia rebels do to hostile civilians in areas they control is not reported because no journalists are allowed in rebel areas. Thus it is only later that it becomes known that the rebels were using civilians as human shields or letting them use a road the rebels know is constantly watched and most vehicles seen on it are hit with an air strike. The “hit anything that moves” policy can isolate a rebel force under attack and make the rebels easier to defeat.

The Iranians will also send out stories of rebel-controlled civilians going hungry when that can be blamed on the coalition, the Yemeni government or the West. Another technique is to make false claims of damage from Shia ballistic missile or UAV attacks on Saudi or UAE targets. These claims are eventually found to be false but Iranian media experts know that if you can get some traction with the initial story that is what most people will remember. Truth isn’t what counts here but supplying what editors are seeking at the moment.

Gaza

Gulf Arabs had long supported Hamas but no longer because they found Hamas to be unreliable and incompetent. In desperation Hamas allied itself with Iran, even though Iran is at war with Sunni Arabs, which includes most Palestinians. Most Arab states do not want to see another Israeli invasion of Gaza. It would get thousands of Gazans killed as well some (probably less than a hundred) Israelis. There is general agreement by Israel and their Arab allies that the forces Iran has assembled in Syria and Lebanon are a far greater threat than Hamas. Meanwhile, Hamas competitor, Fatah, which runs the West Bank, remains quiet. Fatah still gets financial aid from Gulf Arabs and sees Hamas reckless behavior as eventually destroying Hamas and leaving Fatah in charge of Gaza once more.

Arabs see other positive developments. The Americans have revived sanctions in Iran and hurt Iran economically. The continued inability of Iran backed groups in Gaza, Syria and Lebanon to do any serious damage to Israel makes Iran look weak. The Iranians don’t like that, the Arabs do and most Israelis are willing to give this strategy a try. This includes a change in the ROE (Rules of Engagement) for Israeli forces guarding the Gaza border. The Israelis will now increase their use of force against Hamas organized “popular demonstrations” that try to get Hamas members into Israel. This border violence will now be met with more lethal force against those to try to damage or get across the border fence and against anyone trying to throw explosives or firebombs across the fence. The Israelis have lots of vidcams on all this border violence and Hamas has had a hard time portraying its paid protesters as victims. Israel just raised the price of that violence, at least for the Gazans Hamas has recruited for this activity.

One Gulf Arab state, Qatar, is siding with Iran because its emir and the ruling family feels that is a wise move. After all, long-term the Iranians have always been the local superpower. Qatar tends to play by the rules more than Iran and helped negotiate, with Egypt, a November 8th ceasefire that was promptly broken by Hamas as soon as Qatar delivered the agreed upon $15 million in cash. This was for unpaid (for months) government employees in Gaza. Quatar agreed to make these payments for six months in return for the ceasefire which, like all the others Hamas agreed to, Hamas or some other Islamic terror group in Gaza soon violated. Qatar wanted to end the state of war between Hamas and Israel and hoped cash and public support would do it. Qatar is very wealthy (it has the highest per-capita income in the Persian Gulf) and its ruler has been increasingly active in backing change in the Arab world. Qatar was an early supporter of the Syrian rebels, including the Islamic terrorist groups and urges political reforms throughout the Arab world, something that has polarized Arabs everywhere.

November 29, 2018: In Syria, an Israeli airstrike hit an Iranian base south of Damascus, or at least that is what Jordanian media first reported and later eyewitness accounts confirmed there were numerous large explosions that went on for about an hour. Syria said its air defenses shot something down but could not produce any wreckage and Israel would only say they had not lost any aircraft or sent any into Syria. That does not rule out a missile strike, because Israel has some new air-launched missiles that strike targets as a ballistic missile would. This would be the first reported Israeli airstrike in Syria since September. A Syrian anti-aircraft missile landed in the Golan Heights but it is not clear which side of the border.

In the United States (Washington DC) the Americans put a vast trove of Iranian weapons or fragments (of ballistic missiles, naval mines, remotely controlled bomb boats or UAVs) collected from countries throughout the Middle East (Yemen., Saudi Arabia, Iraq, Syria, Afghanistan and so on) as evidence of illegal Iranian arms exports. Most of the items displayed have Farsi (the Iranian language) markings. Opening the display in Washington makes it accessible to many foreign embassy personnel and journalists.

November 28, 2018: For the first time an Iranian B-747 freighter aircraft delivered missile components directly to Lebanon. These components add GPS guidance to long-range unguided rockets. The transport flew over Iraq and Syria.

Iran added two new Ghadir class mini-submarines to its navy. One was newly built (over 18 months) while the other underwent a ten-month refurbishment. That would make 22 of these in service although there have been reports that some have been lost due to accidents at sea. After ten years of trial and error, they produced the first 120 ton Ghadir (Qadir) class vessels in 2005. By 2012 Iran claimed to have 21 of these small diesel-electric subs but no new ones were produced until recently. Some of the Ghadirs have undergone upgrades or refurbishment. The Iranians never released specification. Ghadirs look very similar to the Italian Cosmos SX-506B submarines that Columbia has operated since the 1980s. The 100-ton SX-506Bs are only large enough to carry 18 people (including up to a dozen commandos) and two torpedoes or two mines in the two 533mm torpedo tubes. News video shows what looks like to be two torpedo tubes on the Ghadirs and Iran claims that the Ghadirs carry torpedoes. Apparently, the Ghadirs have a crew of nine and space to carry nine more people. There are no living accommodations on the Ghadirs so operations would normally be less than 24 hours. The North Korean Sang-O class submarine closely approximates the Ghadir type. In 2007 North Korea gave Iran, outright, four of its Yugo-type midget submarines. These Yugos were well worn 90-ton 21 meter (65 foot) craft but Iran accepted them all the same. Taking them apart taught the Iranians much about how to design and build mini-subs. Iran makes a lot of outrageous claims about the capabilities of the Ghadirs but over a decade of observation (by Western and Arab naval forces) indicates they are just mini-subs of limited endurance that can carry two torpedoes or two or more naval mines.

November 25, 2018: Syria is apparently granting citizenship (and Syrian passports) to thousands of Iranian mercenaries like Hezbollah from Lebanon, some Iranians and Shia from other countries Iran recruited to fight in Syria. These newly created Syrians will be wearing Syrian Army uniforms as they take up position near the Israeli border. Israel suspected that Iran was planning this and now has to respond before these Iranian forces can carry out any attacks (as Iran has vowed to do) on Israel itself. Iran is desperate for a win because their recent efforts to hurt Israel have all been very embarrassing failures.

November 24, 2018: At the request of Iran Iraqi banks banned the sale of dollars to anyone traveling to Iran. This is part of an Iranian program to ban the use of dollars by Iranians.

November 23, 2018: The Iranian foreign minister, while visiting Europe, admitted that Iran would have to reconsider its current nuclear program (give in to U.S. demands) if it was the “will of the people” to do so to solve economic problems. The protests in Iran are growing in numbers and persistence. The protests are mainly about the corruption and mismanagement of the Islamic dictatorship. The revival of the sanctions has just made more of that corruption and mismanagement obvious to more Iranians that that is why the government is willing to admit that giving in to American demands is a possibility.

November 22, 2018: In Gaza ISIL, which had long helped (for a fee) smuggle Iranian weapons into Gaza, has canceled that arrangement by seizing for its own use a recent Iranian weapons shipment that contained Russian Kornet ATGMs (Anti-tank guided missiles). ISIL was not angry with Iran but with Hamas, an Iran-backed Islamic terror group that runs Gaza. Hamas had agreed to tolerate an ISIL presence in Gaza because Iran needed ISIL cooperation to smuggle weapons into Gaza. But Hamas also needed to please Egypt which continues to block the use of the only border crossing between Gaza and Egypt. Israel controls the other one, which is the conduit for all the foreign aid, which the Israelis search thoroughly for weapons and other contraband. So Hamas recently agreed to Egyptian demands that ISIL activity in Gaza be limited and offenders be arrested. ISIL is the major terrorist threat in Egypt and Gaza was a sanctuary for them. Hamas complied and ISIL retaliated by seizing the arms shipment.

November 19, 2018: Israeli officials revealed that the Russians had recently proposed to the Americans and Israelis that Iran was willing to withdraw its troops and mercenaries from Syria in return for the United States lifting some of the sanctions it just re-imposed. Such a deal is would be difficult to implement. Israel and the U.S. do not trust Iran to observe the terms of any such deal and it is unclear just how many sanctions Iran wants to be lifted. The Syrian government and the Turks have a say in this but the big problem is trust and the fact that Iran is in big economic and political trouble back home because of how the corrupt religious dictatorship has mismanaged the economy for decades. Within a week the American made it clear they would never consider accepting a deal like this and that the sanctions are one of the most effective methods of persuading Iran to reduce its violent activity in Syria and other nations.

The Americans have also sanctioned companies and individuals involved in smuggling Iranian oil to Syria. At the center of this was a Syrian owned Russian bank that was key to arranging the oil smuggling then passing the cash on to Iran. The Central Bank of Iran was also involved as well as other banks and non-banking firms in Iran. The U.S. puts sanctions on key personnel involved, which makes their international travel more difficult and their personal finances more precarious. The U.S. claims that portions of this operation have been going on since 2014.

November 18, 2018: In Yemen, the Shia rebels said they would halt their use of ballistic missiles (all Iranian) for attacks on neighbor countries and government forces in order to obtain a ceasefire.

November 17, 2018: In southern Iraq (Basra) another prominent local Shia cleric, Sheikh Wissam al Ghrawi, was assassinated outside his home. Ghrawi had recently called for Basra demonstrators to take up arms against the corrupt government because of continued failure to provide clean water and electrical power. This is the second such assassination since September when a local protest leader openly accused Iran of interfering in Iraq and was later killed by what were believed to be Iranian gunmen.

In the southeast Syria (Suwayda province) Syrian army and Iranian mercenaries forces pushed ISIL out of their last stronghold in the region. For three months the Syrians have been fighting ISIL fighter dug in atop hills in the desert area. Suwayda province is one of the four that border Jordan and ISIL has been trying to use the remote area as a base since early 2017. In mid-2017 the Syrian forces pushed ISIL away from the Jordanian border and began over a year of fighting to push ISIL out of the province. That campaign apparently ended with the ISIL forces not just retreating but dispersing into much smaller groups or individuals and attempting to get out of the country. Some of the ISIL members headed for the Jordan and Saudi borders. It is suspected that this is another negotiated retreat with ISIL abandoning most of their weapons and equipment in order to avoid a violent pursuit. Syrian and Russian warplanes are able to enforce the agreement by patrolling the escape routes and attacking any group of travelers that appear to be armed or simply too large. Turkey and Iraq have been seeing a lot more of the “dispersed” ISIL, some of them with their wives. The foreign ones are being caught at the Turkish border as they try to return home to Europe.

November 16, 2018: Iran threatened to send troops across the Pakistani border to find and destroy Iranian Jaish al Adl Baluchi Baluchi rebel camps in Pakistan if the Pakistani security forces did not take action. This is an old problem for both countries. There are Baluchi tribes on both sides of the border. The religious dictatorship in Iran is hostile to Sunnis and the Iranian Baluchis do not like that at all. The Iranian Baluchi rebels have become bolder and more successful in their attacks on Iranian security forces. Iran has responded by executing more captured Baluchi rebels and that resulted in even more Baluchi violence. There was a similar situation in 2014 and Pakistan went after the Baluchi rebel camps. But that was only a temporary fix because the ethnic and religious tensions tend to persist.

Israel is warning Lebanon and Iraq that Iranian use of their territory to upgrade unguided rockets with GPS guidance kits will result in Israeli airstrikes to destroy those operations unless local governments act. Lebanon is more of a problem because of its relationship with Iran and Syria. Hezbollah, a 1980s creation of Iran, is an autonomous military force in Lebanon and dominates local politics via terror and threats of violence against those who resist. Hezbollah, like its patron Iran, is dedicated to the destruction of Israel. Iran is currently trying to turn Syria and Iraq into subject states similar to Lebanon. Most Syrians and Iraqis want to avoid this but it isn’t easy because Iran is clever, determined and fanatic about the “destroy Israel” thing. What complicates the situation in Syria is that there a lot of major players.

November 15, 2018: The United States announced that as part of its revived Iran sanctions it would go after Iranian monetary and other aid for Hamas and Hezbollah. Both are internationally recognized as Islamic terrorist organizations and legitimate targets for American efforts to seek out and disrupt Iranian efforts to provide monetary support. The U.S. has also expanded its list of Hamas and Hezbollah officials subject to individual sanctions or even multi-million dollar rewards for the death or capture.

The Israeli prime minister admitted that there are classified (secret) activities underway to deal with the Hamas and Iran. Israelis are willing to accept that because Israel has pulled off some spectacular victories against Iran in 2018, and in the past. These have been kept secret to work and the most the prime minister can do is admit new operations exist. The view from Iran is different and the senior Iranian leaders, especially supreme leader Ayatollah Ali Khamenei, have been privately exhorting the military (including the elite Quds Force) to be more effective. Now, these exhortations are being made publicly, although politely compared to some of the private criticisms.

November 14, 2018: Pakistan rescued five of the twelve Iranian border police kidnapped from Iran last month and believe they will rescue the other seven as well. On October 17th, in southwest Pakistan (Baluchistan) Iranian Jaish al Adl Baluchi rebels from Pakistan (where these rebels often establish bases) crossed the border into Iran and kidnapped twelve Iranian police manning a border post. Apparently, those at the border post were unconscious after eating a meal containing drugged food. Jaish al Adl took credit for the operation and said it was in retaliation for Iranian attacks on Iranian Baluchis (who are Sunni Moslems). There was also the recent (late September) border clash in which a Jaish al Adl leader was killed. Iran demanded that Pakistan quickly retrieve the missing Iranian border guards as they are believed to be in a Jaish al Adl facility in Pakistan. Jaish al Adl has been around since 2012 and is the successor to Jundallah and perpetuates Iranian Sunni Baluchi resistance to Iranian Shia rule. The Iranian and Pakistani Baluchis have family, tribal and ideological links and that makes it easier for an Iranian Baluchi Islamic terror group to establish and sustain bases in Pakistan. This is a constant source of friction between Iran and Pakistan because the Iranians could shut down groups like Jaish al Adl were it not for the Pakistani sanctuaries. Pakistan is unable to suppress its own Baluchi Islamic terrorist and separatist groups. In response to this kidnapping, Iran moved several thousand more troops to the 900 kilometer long Pakistan border.

November 12, 2018: In eastern Syria (Homs province), an Iranian automobile assembly plant, built just before the 2011 civil war began, has managed to survived years of fighting and production was resumed in 2016. Components were brought in from Iran by ship but production never returned to pre-war levels (60 cars a day). Few Syrians can afford a new car so production limps along at less than six cars a day and many of those gather dust in a warehouse awaiting buyers. With the return of economic sanctions on Iran, it has become economically difficult to justify keeping the factory open. But it is a symbol of Iran helping Syria so the Iranian government covers the losses. Iran has also announced that it will build and operate a branch of an Iranian university in Syria that will teach secular and religious subjects for undergraduates and graduate students. Iran is also financing a revival of the long-sought railroad from Basra in southern Iraq to the Syrian port of Lattakia. The railroad will be owned by Iraq, which will eventually repay Iran for the construction loans. Iran will be able to use the railroad to get all sorts of cargo to the Mediterranean coast at low cost.

November 11, 2018: In southwest Pakistan (Baluchistan), seven Pakistanis in a pickup truck were caught by Iranian border guards as the vehicle sought to sneak into Iran. When the vehicle refused to stop the Iranians opened fire, killing two of the Pakistanis and wounding four others. The vehicle stopped.

November 9, 2018: A Russian hosted Afghan peace conference began in Moscow. In addition to the Taliban (which prefer to be called the Islamic Emirate of Afghanistan at these talks), eleven countries were invited (including Iran). The Taliban do not consider the elected government of Afghanistan as legitimate and insist on negotiating the United States first to ensure that all foreign troops are withdrawn. The Taliban also want all military aid for the Afghan government halted.

Meanwhile, Iranian ally Qatar hosts a Taliban headquarters where the Taliban can, in effect, meet with anyone to discuss anything. The Russian peace talks attracted delegations from Russia, India, Iran, China, Pakistan and five former Soviet republics in Central Asia as well as non-government groups from Afghanistan and some Americans as observers. Technically the Taliban cannot be in Russia because Russia recognizes the international designation of the Taliban as a terrorist organization. Nevertheless, the Taliban insisted they would make peace only if all foreign troops left and there were international guarantees to keep the Americans from returning or aiding Afghans fighting the Taliban.

November 7, 2018: The U.S. confirmed that the renewed American sanctions on Iran will not interfere with the new trade route from Afghanistan, via Iran to the Indian Ocean port of Chabahar. The Americans make exceptions for these sanctions and in this case, Pakistan is seen as a larger threat to Afghanistan than Iran. Most of the truck traffic that used to go through Pakistan to the port of Karachi is now using the new route via Iran to Chabahar (built by India and Iran mainly for traffic to Afghanistan and Central Asia). At least $5 billion worth of trade to and from Afghanistan will use Chabahar each year. Pakistan is the big loser here, especially since they had recently increased higher traffic on Afghan goods moving through Karachi. In addition, since mid-January Pakistan has closed the main border crossings to Afghan traffic entering Pakistan. Yet Pakistani goods are allowed into Afghanistan and now the Afghans are considering blocking that and depending on trade links via Iran and Central Asia. This is an undeclared trade war by Pakistan. The main reason is growing trade with India and switching from Karachi to Chabahar for Afghan imports and exports. The United States, India, Afghanistan and the UN are increasing pressure on Pakistan over Pakistani support for terrorism.

November 5, 2018: In Iraq Adil Abdul Mahdi, the new (since October 25th) prime minister said that the PMF militias wound not be disbanded but would remain part of the security forces and on the government payroll. The government is currently spending $158 million a year on the PMF. The PMF reports to the prime minister, not the Minister of Defense. There are about 150,000 PMF militiamen organized into about 70 brigade-sized units. At least half the PMF have a degree of allegiance to Iran. The allegiance varies depending on how unpopular Iran is in Iraq.

 

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