In the last month the Iranian currency hit record lows versus the U.S. dollar. Currently it costs 317,000 rials to buy one U.S. dollar. A month ago, it was 262,000 rials per dollar. This catastrophic weakening to the rial began in 2017 when the U.S. revived economic sanctions. By
August 2019 it cost 120,000 rials to buy a dollar. Back in 2015 a dollar could be had for 32,000 rials. The current foreign exchange crisis is partly due to exporters of non-oil goods keeping about half the money they receive outside the country. That is a good business decision because that money is safer from government corruption if it is kept in foreign banks. These sanctions plus the covid19 shutdowns are on their way to shrinking the economy (GDP) up to 8 percent this year. GDP has been tanking since sanctions were revived in 2017. Inflation is currently over 30 percent and rising. The unemployment rate is twelve percent but the underemployment rate, because of firms shut down by quarantines, is much higher. Over 60 percent of the population is living below the poverty line. A growing number of senior officials fear this will spark another round of violent anti-government protests. Even government-controlled media is openly discussing this prospect. Surrender is not an option for the religious dictatorship, which has been encouraging retired IRGC (Iranian Revolutionary Guard Corps) generals to run for parliament and the presidency. While parliament decisions are subject to veto by the senior clerics in the Guardians Council, such vetoes always cause more popular opposition to the government. With more IRGC men in parliament there is the possibility of blocking embarrassing new laws before they are passed and must be vetoed.
In late September the U.S. threatened to bomb pro-Iran Iraqi militias unless Iraq eliminated the threat first. The American position was that Iran was at war with Americans in Iraq and said so frequently and publicly. All the major Iraqi Shia religious leaders have called for the disbanding of all PMF (Popular Mobilization Forces) militias, in part because Iran was rapidly turning the entire PMF into an Iraqi version of the Lebanese Hezbollah organization, called Kataib Hezbollah. Founded in the 1980s with Iranian help, the original Hezbollah still takes orders from Iran and has dominated Lebanese politics for over three decades. Most Lebanese want Hezbollah gone but a heavily armed militia with enormous economic power in Lebanon is difficult to disband. Iraqis want Kataib Hezbollah gone now and cannot understand why their prime minister does not act. Fear probably has a lot to do with the delay. In Lebanon, Iran had several senior Lebanese politicians assassinated for being too openly hostile to Hezbollah. The personal danger for the Iraqi prime minister is based on fact, not just speculation.
The new Iraqi prime minister (Mustafa al Kadhimi) is decidedly hostile to Iran. He has already ordered the removal of many pro-Iran commanders in the security services and disbanded some units that were dangerously pro-Iran. Kadhimi went to the U.S. in late August to meet with the American leader and discuss improving U.S.-Iraq relations. Such a meeting was important because Kadhimi is the first post-Saddam (2003) prime minister that is not heavily influenced/controlled by Iran.
Iran still has enough loyal (to Iran) Iraqi militias to be a threat to the Iraqi government. Most Iraqi politicians and voters want less Iranian influence. Iran wants fewer foreign troops in Iraq. That is a point of contention because Iraqis realize the foreign troops offer some assurance that Western and Arab states would actively assist Iraq if Iran sought to take control via a civil war or invasion. Civil war is the more likely option, but only in an emergency, such as Iraq appearing to succeed in disbanding all the pro-Iran militias. At the moment Iran is willing to halt all violence by Kataib Hezbollah if the government agrees to have all foreign troops leave Iraq, except for Iranian advisors. This sort of thing is seen by Iraqis as an expression of Iranian contempt for Iraq and confidence that Iran will turn Iraq into another Lebanon.
Russia wants Turkey to withdraw its troops from Syria and the Turks refuse to leave. Russia also wants the Americans out of eastern Syria and the Americans won’t leave. In the south Russia wants the Iranians out of Syria. The Iranians won’t leave. All these Russian eviction notices are in support of the Assad family and their continued rule over Syria. The Assads want the last rebel stronghold in Idlib province eliminated and the surviving Islamic terrorist rebels pushed out of the country. Turkey, Iran and the Americans have other priorities.
Too many of these Russian, Turkish, Iranian, American and Syrian goals contradict each other. There are other parties that must be paid attention to, like ISIL (Islamic State in Iraq and the Levant) and Israel. ISIL is still a violent presence in eastern Syria and Israel continues carry out airstrikes on Iranian forces as long as the Iranians are in Syria and demanding that Israel be destroyed.
In Syria, Turkey, Russia and Iran continue to pretend they are all friends and allies of Syria but the reality is different and becoming more visible and violent. Syrians fear Russia and Turkey will join forces to extract what they can from Syria.
In north, neighboring Azerbaijan is again attacking Armenia. Iran should back Azerbaijan against Christian Armenia, but cannot. Azerbaijan is on good terms with Israel and a major customer for Israeli weapons. Iran is trying to stay out of this renewed mess. In 2016 Armenia defeated an Azerbaijani April “offensive” and Russian brokered a new ceasefire deal. Russia and Iran cooperated to maintain the ceasefire. Iran has more influence over Azerbaijan and did what it could to persuade the Azerbaijanis to stop violating the ceasefires. That worked for a while, mainly because the previous Azerbaijani attacks were not successful. After 2016 Azerbaijan continued to purchase new weapons and improve the performance of its troops. They turned to Israel for help, not Iran. There was little doubt that there would be another war.
Both Azerbaijan and Armenia were formerly part of the Soviet Union and quite different even though they were neighbors. Azerbaijan is majority Moslem while Armenia is Christian. Along with the smaller Georgia, these two are the only two nations in the Caucasus that are majority Christian. For over a thousand years Armenians and Georgians resisted efforts by stronger neighbors to make them Moslem. Russia played a key role in preserving Christian Armenia and considers itself the “protector” of Armenia. Despite that Russia has managed to maintain good relations with Azerbaijan as well. In doing that Russia established one of the more successful peacekeeping operations since the Cold War ended in 1991 by getting Armenia and Azerbaijan to agree to a ceasefire in 1994 after another round of heavy fighting over Nagorno-Karabakh. Russia became a military ally of Armenia as part of that arrangement. Iran has tried, and not always succeeded, to be on good terms with Azerbaijan, if only because about a quarter of the Iranian population are Azeris. At the same time Iran and Russia, traditional enemies, have become allies and those links are being used to deal with latest round of violence.
Iran has long harbored an intense interest in Azerbaijan. This is because most of the Turkic and Moslem Azeris live in Iran. Up until 1813, modern Azerbaijan was part of Iran. Then the Russians showed up. Armenia and Azerbaijan were the last Russian conquests as the tsar’s soldiers and Cossacks advanced through the Caucasus in the 18th and 19th centuries. The Russians stopped when they ran into the Turkish and Iranian empires, but not before taking a chunk of Azerbaijan from Iran. The Iranians have not forgotten. In effect, most of "Azerbaijan" is in Iran and Iran has long hoped to reunite all Azeris under their rule. Many Iranian Azeris have risen to senior positions in the government. Despite that, most Azeris would like all Azeris united in a single Azerbaijan. This is not a popular idea within Iran. The Russians, on the other hand, have come to accept the 1991 loss of Azerbaijan and Armenia.
Covid19 has hit Iran particularly hard and Iran has the highest death rate in the region. The official number of covid19 deaths in Iran recently passed 30,000. That’s 357 per million. Two months ago, the death toll was 18,000 Iranians, mainly the elderly or those already ill with something else. Unofficially the death toll is four or five times higher and some Iranian medical statistics experts believe it is more than ten times the official number. Initially the clerical rulers of Iran (the Guardians Council) denied the virus would hurt Moslems and would only threaten non-Moslems. Then elderly clerics began to die in large numbers and soon Iran was suffering more covid19 deaths per capita than most anyone else. By early June Iran had already suffered
over 8,000 confirmed covid19 deaths. That came out to a hundred deaths per million population. By August deaths per million are officially 221, which was more than double the global average of 95 and higher than nearly 90 percent of the word’s nations. Iran is considered the epicenter of covid19 infections in the region and the source of infection for most of its neighbors. For example, so far Afghanistan has 38 deaths per million people, Turkey 56, India 82, Iraq 252 and Pakistan 30. Across the Gulf Saudi Arabia has 148 deaths per million and the UAE 46. In Europe Spain has 722, Britain 641 and Sweden 585. The U.S. rate is 676. The world average is 142 deaths per million.
October 19, 2020: The government announced it was ready to sign military and security agreements with Gulf Arab states. No details were given. Details are very important, but so is the Iranian history with treaties and agreements. Iran tends to treat these documents as “subject to interpretation”. That means Iran will often reinterpret these deals without telling the other signatories. An example of this deceptive behavior can be seen in how Iran presents and then uses its annual defense budget.
The 2019 government budget was supposed to be $47 billion but that seemed optimistic if only because the Iranian currency has lost half its value (against the dollar, the benchmark for buying imported necessities) when the budget took effect. Another suspicious item was the unusually low $7 billion military budget. Compare this to $20 billion for Israel, $7.2 billion for Iraq, $8 billion for Pakistan, $15 billion for the UAE and $30 billion for Saudi Arabia. Iran was expected to increase defense spending to $10 billion by 2019. Domestic unrest encourages Iran to report inaccurately lower defense spending. The government admits that only about a third of the defense budget goes to improving Iranian defenses the rest goes to secret projects, like supporting wars in Syria and Yemen as well as forces in Iraq and Lebanon.
It is obvious that the Iranian military gets little money because the navy is practically non-existent and the air force is an antique show. Yet the foreign wars are very expensive, as is the smuggling program to support ballistic missile, nuclear and other new systems development. The actual military spending is believed to be closer to $20 billion a year, most of it not even included in the official government budget. Despite all the smuggling and improvisation Iran is stuck with the oldest, least capable fleet of warplanes in the Middle East. Russia, which lost most of its conventional forces in the 1990s because of the dissolution of the Soviet Union, spent a higher proportion of its defense budget on maintaining their nukes.
The United States sanctioned six more Chinese companies and two individuals for smuggling banned items between China and Iran. Such sanctions cause problems for the Chinese firms, who are now hampered in their other international dealings.
October 18, 2020: According to the 2015 treaty UN arms sanctions on Iran are lifted as of today. These sanctions been in force for thirteen years. Technically Iran can now freely import and export weapons. In practice that will be difficult because the United States declared Iran in breach of the 2015 treaty terms. The Americans revived economic and military sanctions in 2017 and has been very effective at enforcing them.
In Yemen a new Iranian ambassador, replacing one that had left Yemen in 2015 when the civil war escalated. The old ambassador was for the pre-civil war Yemen government. The new ambassador is reassuring for the rebels, who have been on the defensive for more than a year. Despite that the legitimate Yemeni government has internal problems that the rebels may be able to take advantage of. Up north another Iranian ballistic missile was fired by the Shia rebels towards a target in Saudi Arabia. This missile, like nearly all fired into Saudi Arabia, was shot down by Saudi Patriot anti-missile systems.
October 17, 2020: In Iraq (Baghdad) a pro-Iran militia demonstrated outside the office of an Iraqi Kurdish political party. The Kurds were accused of helping the Americans kill Iranian Quds Force general Soleimani in January 2020.
October 16, 2020: An Iranian resistance group, based in Europe, revealed that it had evidence of a new Iranian nuclear research facility outside Tehran. The group presented commercial satellite photos of the facility, showing buildings in a fenced compound and guarded by soldiers. The compound in located inside a larger military controlled area. Those working at this facility, completed in 2017, live in the military controlled area outside the nuclear research compound.
October 15, 2020: In the Arabian Sea south of Iran an Iranian dhow (wooden cargo vessel) put out a distress call. An American destroyers responded. The dhow used ship-to-ship radio to report that their engine battery was dead and they could not start their engine. The destroyer found that it did not have the type of battery required and called on the Oman Coast Guard, which said they had one of those batteries and were sending out a ship with it. Meanwhile the destroyer stayed with the dhow until the Omanis arrived and supplied the Dhow crew with food and water.
October 14, 2020: The government revealed that there were two major Internet-based attacks on unnamed government institutions recently. It was believed that one of these attacks was similar to the May incident that shut down
Shahid Rajaee/Bandar Abbas container port near the Strait of Hormuz. Back then Iranian officials admitted that local government networks had been hit with an Internet based attack that crippled container operations. The official insisted the attack did no lasting damage to port operations. But commercial satellite photos later showed trucks (delivering or going to pick up containers) backed up on roads to the port. An unusually large number of container ships were stuck waiting to get a berth. In a rare move Israel took credit for the hack, which was meant to halt port operations for several days. Israel rarely takes credit for these attacks but did so in this case to warn Iran there would be a lot more of this if Iran did not halt its efforts to hack Israeli public utilities, as in a recent effort against a local water supply system. The Iranians had attempted to hack Israeli water systems in late April. It has not been revealed what triggered the latest Cyber War attack on Iran. Bandar Abbas is the major military and commercial port in Iran. The container port is part of the Bandar Abbas complex and is where all the modern tech and consumer goods arrive. Shutting down Bandar Abbas for months, or more, would be quickly felt by most Iranians. The other major Iranian port is Kharg Island, in the Persian Gulf. This is the main export facility for 90 percent of oil and gas shipments. Income from these exports pay for over a third of the government budget. The current sanctions have reduced oil exports by 70 percent or more.
October 13, 2020: Iran confirmed that it had moved some of its air defense systems to Syria.
October 12, 2020: Somalia awarded Turkey the 14-year contract to develop and operate the port of Mogadishu. Turkey has a track record of successful projects in Somalia. These include a major hospital, a military training center as well as road maintenance and rebuilding the Mogadishu airport. The main competitor for the port contract was the UAE, which currently manages the port. The UAE lost out here because they had already signed deals to rebuild and manage ports in the two autonomous parts of Somalia; Puntland and Somaliland. This angered the Somali government, which wants to make Puntland and Somaliland part of Somalia once more. The UAE also has a problem with its tolerating the continuing illegal export of Somali charcoal to the UAE and other Gulf states.
For over a decade Turkey, Qatar and the UAE have been competing to buy control of Somali coastal assets. A further complication is that Qatar and Turkey are allies of Iran. Turkey has long provided some aid, mainly military training for the Somali army. Qatar is believed to provide aid in the form of bribes for specific politicians. This eliminates the more normal payment method whereby money is provided as foreign aid and most of it is stolen by politicians. The U.S. alone has seen over a billion dollars’ worth of aid disappear like that. There are rumors that Turkey will begin using its training facility and connections throughout the Somali military to recruit mercenaries for the Turkish Libyan invasion force. Rumors are still rumors, even in Somalia but dirty business and massive corruption are a fact.
October 9, 2020: Iranian officials arrived in China for two days of discussions on how to implement the military aspects of the mew 25-year agreement with China. The agreement goes into force next month (November). Apparently, the military portion of the agreement will include China facilitating North Korea selling ballistic missile tech and some KN-17 IRBM (Intermediate Range Ballistic Missiles) missiles and mobile launchers to Iran. These missiles have a range of 5,000 kilometers and entered service in 2017. Iran will apparently pay in oil, which will be sent to China and then transferred to North Korea via the existing oil pipeline from China to North Korea.
Since early 2020 the terms of the 25-year economic/political/military agreement with China have been under negotiation. Some details of the agreement are still being worked out but the draft document indicated Iran was willing to make a lot of concessions to become a close economic partner of China. That would mean China would have an incentive to protect Iran diplomatically and militarily. The document makes Iran the major supplier of petroleum to China and China the major source of foreign investment as well as becoming Iran’s largest trading partner.
October 8, 2020: The United States revealed that it had sized 92 Internet domain names and shut down 300 Iranian fake news sites.
In Baghdad the government ordered pro-Iranian PMF militias out of the main airport. These militias gave Iran control of the airport and to ensure that one of those militias was a detachment from Kataib Hezbollah. These are the PMF brigades that want to create an Iraqi version of the powerful Hezbollah force in Lebanon.
October 6, 2020:
Iran recently admitted, during a boatful interview of a senior general on Iranian TV, that Iran had indeed encouraged the Shia rebels in northern Yemen to exploit the post-2011 Arab Spring chaos and move forces south into the capital Sanaa. Iran provided planning, some cash and weapons and encouragement. With the help of some politicians and army commanders, the Shia tribes did the unexpected and took control of most of the more populous north.
Saudi Arabia is less concerned with Yemeni unity and more about Iranian efforts to establish an autonomous or independent Shia Arab dominated state in northern Yemen. This new state would depend on Iran for survival because Iran is the largest Shia majority nation in the world and currently a deadly rival of Saudi Arabia. While the UAE is less concerned about an autonomous Shia Arab entity in Yemen, the Saudis will not tolerate it under any circumstances tolerate such an Iran-backed Shia presence on its southern border.
October 2, 2020: The Saudis have revealed details of the Iran smuggling operations. Interrogations of numerous captured smugglers revealed a lot of detail of how one smuggling network operates via a northern Somali port of Berbera. Yemeni fishermen from the Red Sea coast were recruited in 2015, after the Arab Coalition naval blockade went into effect. Key members of the smuggling teams were sent to Iran for a month or more of training which included GPS use, maintaining ship engines, hiding arms cargo on fishing boats and tactics to evade the blockade. The smugglers were well paid but as time went by more and more of them were caught. This happened despite Iranian tactics that stressed team work and use of some fishing boats to deliberately act suspiciously and decoy the warships away from the boat carrying the weapons.
October 1, 2020: Lebanon and Israel agreed to negotiate their maritime border dispute in an arrangement brokered by the United States. Lebanon is still technically at war with Israel. That plus the presence of Iran backed Hezbollah in southern Lebanon made any previous negotiation efforts impossible to carry out. This time Hezbollah is in decline as is its patron Iran. Lebanese who favored negotiation with Israel are no longer in the minority. The border negotiations will be held at a Lebanese town on the Israeli border. There is no guarantee that the negotiations will produce an agreement, but it is progress.
September 30, 2020:
In northeast Iraq (Erbil province) six rockets were fired at an American base near the Erbil city airport. Three rockets were intercepted by anti-rocket systems and the other three fell into empty land. The rockets were fired from a non-Kurd area in nearby Nineveh province where a pro-Iran PMF brigade is known to operate. Erbil city is the capital of the autonomous Kurdish north.
September 29, 2020: In the southeast (Sistan-Baluchistan province), near the Pakistani border, someone ambushed some IRGC soldiers, killing three and wounding one. Local Sunni Baluchi separatists are suspected.
In eastern Syria (Deir Ezzor province) Russian military police arrested an IRGC commander and charged him with beating a member of the 5th Corps militia, a local group supported by Russia. IRGC backed (and often led) Syrian and Iraqi militias are being used to establish IRGC controlled territory in Deir Ezzor province. Russia is opposing this effort with local militias that do not want the IRGC disrupting their lives and economy. When the IRGC arrives, some locals are evicted from their homes and farms and movement is strictly controlled by the IRGC militias. Russian and IRGC forces have not been shooting at each other but there has been a lot of intimidation and physical violence.
September 22, 2020: In northern Syria (Idlib province) the fighting between Syrian and rebel forces in southern Idlib has grown more intense this month. The Syrians want to eliminate the last rebel stronghold but the concentration of surviving Islamic terrorist rebel groups in Idlib know they are making a last stand and believe that because they are on a Mission From God they will somehow prevail. The Assad troops are not nearly as motivated and if it weren’t for Russian airstrikes and artillery support would make no progress at all. The Iranian mercenary ground forces were a casualty of the 2o17 Iranian cash crises. Iran has sent token forces to help out in Idlib but is concentrating most of its forces near the Israeli border. That has led to hundreds of Israeli airstrikes, which often damage Syrian forces that operate closely with the Iranians. The Israeli intel is disturbingly good and their missiles dependably accurate. The Israelis hit the Iranians and, whenever possible, leave Syrian forces alone. The Assads bluster and protest to please their Iranian patrons but understand that Israel does not want to be at war with the Assads and the Assads appreciate that.
September 21, 2020: In southern Syria (Golan Heights) Israeli troops destroyed two army observation posts on the Syrian side of the border. The two posts were 500 meters from the nearest Israeli border fortifications and were destroyed by a rare night time commando raid. Syria did not acknowledge the raid or disclose casualties. Going in on the ground allowed the Israelis to grab documents and perhaps even a prisoner. It was believed that these observations posts were established at the request of Iran and was compiling information on Israeli border activities for future Iranian attacks.
September 20, 2020: The American government told the Iraqi president that if the Iran-backed PMF militias were not brought under control the United States would close its embassy and carry out airstrikes on 80 targets associated with Iran-backed groups (mostly PMF) in Iraq.
September 19, 2020:
About 81,000 Afghan refugees returned from Iran to Afghanistan in July. Far fewer returned from Pakistan. In the last year 500,000 refugees returned, over 9o percent of them from Iran, with a small but growing number from Turkey and Western nations deporting illegal migrants. About half the returnees from Iran are being forced out.