Improved economic deal could strengthen hand of Tehran’s reformists, says report
By: Patrick Wintour
European diplomats are being urged to restart shuttle diplomacy with Iran after the US presidential election in November or risk Tehran hardliners gaining still wider control of Iran’s many layers of government and its economy.
The European 3 (E3) – Germany, France and the UK – managed to maintain their unity at a meeting on Friday at which they agreed to keep the nuclear deal alive, oppose a US plan for the snapback of sanctions and possibly limit the lifting of the UN conventional arms embargo on Iran due to take place in the autumn.
But the deal limiting Iran’s nuclear programme, signed in 2015, is hanging by a thread after the UN nuclear watchdog the IAEA declared for the first time that Iran was not cooperating with its inspectors at two key nuclear sites. In a warning shot, the IAEA board, including the Europeans, voted to urge Iran to cooperate.
There is a growing feeling that the trends in internal Iranian politics mean the 2015 deal, known as the Joint Comprehensive Plan of Action (JCPOA), will slowly collapse unless some fresh political initiative is made soon by the west. Indeed, diplomats are debating whether the political trends in Iran have already flowed so strongly in favour of those opposed to engagement with the west that the option of a revived deal has been lost for the foreseeable future.
Ellie Geranmayeh, an Iranian specialist at the European council on foreign relations, claims in a report that the path of engagement is not yet closed. But she warns that without an imminent western economic offer, after the US elections, “the two more hardline Iranian power blocs – the conservative ‘Principlists’ and Islamic Revolutionary Guard-linked ‘securocrats’ – will continue their recent ascendancy and press for a confrontational and ‘maximum resistance’ response”.
She warns the US withdrawal from the deal in 2018, and a rapid decline in the Iranian economy, has put a range of hardliners often with subtly different ideologies into the ascendancy.
“The Principlists and the securocrats now control the judiciary, the legislature, the Guardian Council, powerful financial institutions, the state media networks, and most of the security apparatus,” she said. These groups, she warns, are increasingly arguing Iran’s future growth lies in greater self-reliance and not on trading with the west.
A quiet debate is emerging among modernisers in Iran about whether to leave the presidential election uncontested in the 2021 vote, so making the hardliners handle the economic mess.
The balance of opinion is for reformists to stand despite their trouncing in the 2020 parliamentary elections, but Geranmayeh argues their chances of success depend in part on Europe creating a diplomatic opening between the US and Iranian presidential elections, regardless of who wins in America. “Such an opening could even influence who enters the Iranian electoral race, and its outcome. Iran’s moderate power centres currently have a weak hand internally, but they are not completely in retreat.”
She suggests European shuttle diplomacy could aim to agree an interim deal on the nuclear issue with Washington and Tehran.
A previous effort at a deal, largely brokered last year by the French president Emmanuel Macron, rested on financial relief from sanctions by the US and an Iranian agreement to renegotiate the 2015 deal. The bargain partly fell apart over the sequencing of the deal.
Although Donald Trump in recent days has said he still wants a deal, there seems no support for this in Iran. The newly elected parliament speaker, and a growing political force, Mohammad Baqer Qalibaf, has said that while Tehran does not reject diplomacy, it believes that negotiation with the US is “absolutely harmful and forbidden”.
Geranmayeh suggests, based on extensive interviews with Iranian officials, the economic offer will have to be more substantive than the one made in 2019 – partly because the economy has worsened due to coronavirus.
A second spike in the number of deaths in the country has delayed the reopening of parts of the economy, and the rial dropped to record lows against the dollar this week.
Geranmayeh argues that “the E3 will have a better chance at success if this is coordinated in a multilateral framework with Russia and China. In return for this freeze by Tehran, the E3 will need to put together an economic package for Iran. Such relief ought to be attractive enough, and sequenced in such a way, for Iran to commit to full compliance with the JCPOA. The E3 can kickstart this process but, given the impact of US sanctions, Washington’s position will determine the success of this approach.”
Senior foreign policy advisers to Joe Biden, including Jake Sullivan, have said: “It is simply impractical to think that the US will provide significant sanctions relief without assurances that Iran will immediately begin negotiations on a follow-on agreement that at least extends the timelines of the deal and addresses issues of verification and intercontinental ballistic missiles.”
While still engaged in conflicts from Syria to Yemen, Iran is now destabilizing a dispute in the Caucasus that you’ve likely never heard of — the Nagorno-Karabakh conflict. Recently, Azerbaijan discovered that Iranian trucks are supplying energy to the self-proclaimed Armenian government in Nagorno-Karabakh, the province that Armenia captured in 1993 and which remains in dispute to this day.
Until recently, Iran was officially neutral on the issue of the disposition of Nagorno-Karabakh, and recognized that it was a province of Azerbaijan. This posture came despite the fact that Iranian policy towards Azerbaijan has been tense throughout the post-Soviet period, and it has been a steadfast partner to Armenia. Tehran’s stance was influenced by its own fears of a breakaway or secessionist Azeri minority in northwestern Iran. Indeed, Lt. Gen. Mohammad Bagheri, Iran’s chief of General Staff, openly stated that Karabakh is Azeri territory and that changing borders by force is unacceptable.
Iran’s position on Nagorno-Karabakh has now changed, with troubling implications for regional security. Rather than supporting Armenia and seeking better ties with Azerbaijan — Tehran had even offered to mediate the conflict in the past — Iran has now shown that it is willing to undercut Azeri interests and the shaky truce with Armenia. Since outbreaks of fighting in the Caucasus could easily engulf both Russia and Turkey, this kind of meddling is provocative and a threat to regional stability.
Iran’s Shift on Nagorno-Karabakh
In April, Iranian trucks, bearing Iranian license plates, crossed into Nagorno-Karabakh and supplied the local population there with food, energy, and other products. These shipments are probably not the first ones undertaken by Tehran in violation of its own recognition of Karabakh as Azeri territory. Iranian officials, including from the Iranian embassy in Azerbaijan, denied the whole story, claiming that it was “fake news” generated by some separatist pro-Azeri opponent of the Iranian regime. Tehran’s actions and subsequent denials provoked a backlash from the Azeri government and public opinion.
Despite Iran’s claims that it is not recognizing Nagorno-Karabakh (or “Artsakh” as the Armenians call it) as an independent state or part of Armenia, bilateral cooperation with Armenia has grown since 2016. By that time, Iran was already building the Khudaferin high power plant on its border with Nagorno-Karabakh. Commenting on a 2018 interview with Nagorno-Karabakh’s Foreign Minister, Masis Mailyan, one account observed that Iran’s cooperation with Nagorno-Karabakh is mutually advantageous. Iran used to inform Azerbaijan about such activities — that no longer appears to be the case.
It’s likely that Iran’s cooperation with the government in Nagorno-Karabakh on energy shipments has been going on for some time, and that Armenia’s government has supported this cooperation as part of its larger relationship with Iran. That would implicate Yerevan — Armenia’s capital — in this break with international norms. Such cooperation also opens the door to Iranian transshipments of weapons and drugs to and through Karabakh that would also contravene international law. This would represent a major escalation, and constitute a serious threat to Azerbaijan. Since Iran shows a willingness to jeopardize its relations with Azerbaijan — and given its weapons and missile proliferation to its clients like the Houthi in Yemen — it’s plausible that Tehran might ship weapons to allies in Nagorno-Karabakh.
By extending this collaboration with Iran, Armenia places its generally good ties with Washington at risk. Abetting energy flows out of Iran while it is under American sanctions will jeopardize Yerevan’s ties with the United States and its access to the global financial system. Such a move would test the forbearance of the U.S. government, which recently showed special understanding to Armenia in regard to its economic ties to Iran and did not impose sanctions upon it regarding trade with Iran.
Implications for U.S. Interests
Iran’s behavior in the Caucasus has implications for U.S. interests. Tehran’s willingness to risk relations with Azerbaijan — with whom it has tried to establish a rapprochement since 2012 — represents a destabilizing new direction in Iranian foreign policy. Absent an American response, Iran may conclude that it can destabilize this region with impunity. Since Iran demonstrates a more cautious approach to countries on its border than with more distant theaters, this gambit suggests a greater tolerance for risk than many have hitherto believed.
Therefore, Iran may take more risks in regions where U.S. interests are more directly engaged, like the Middle East. Iran’s continuing nuclearization — and its refusal to allow inspectors from the International Atomic Energy Agency to visit certain sites — and its probes in Iraq and Syria highlight that trend. Although the United States killed Gen. Qassem Soleimani in January, the architect of much of Iran’s foreign adventurism, clearly Iran will not desist and is likely planning even bigger probes. More probes like this one against Azerbaijan are likely to occur sooner rather than later.
Developments in the Caucasus highlight the costs of the neglect that has characterized Washington’s approach to the region for over a decade. The United States has an interest in pacifying the region and helping countries escape the shadow of both Russian power and Iranian-supported terrorism. It also has a longstanding interest in supporting democracy as it supported Armenia’s democratic revolution in 2018. Lastly, the United States has an interest in maximizing energy flows from the Caspian Sea to Russia to sustain local governments and reduce Russian leverage on the Caucasus and Europe. When former National Security Advisor John Bolton traveled to Armenia, Azerbaijan, and Georgia in 2018, it was notable because visits from high-level American officials to the region are so infrequent. While there, Bolton offered U.S. arms sales to Armenia. In response, Armenia publicly spurned U.S. cooperation. Moreover, the country appears to be undergoing democratic backsliding, with the arrest of the oligarch and critic of the regime Gagik Tsarukyan, and its defiance of all efforts to negotiate peace in Nagorno-Karabakh.
It behooves Washington to pay more attention to this conflict, and the Caucasus more broadly, because a flare-up of the Nagorno-Karabakh conflict could draw in Russia and Turkey. In 1993, the dispute almost led to a Russo-Turkish conflagration. Armenia could unsettle the region if it tries to hold on to what is universally recognized as Azeri territory. Since it appears to be conniving with Iran to sustain Nagorno-Karabakh — and ultimately incorporate it into Armenia — its policies should be exposed, or it should be induced to retract them at the risk of a major U.S. effort to support Azerbaijan’s. Such a threat might actually lead Yerevan to make peace now rather than bear the ever-higher costs of its current policies. And it would also have the benefit of exposing and thus minimizing Iran’s profile in the Caucasus.
Looking Ahead
Iran’s evolving position on the Nagorno-Karabakh dispute between Armenia and Azerbaijan injects a new, destabilizing factor in the Caucasus. Tehran’s actions in the region will prove toxic for its ties with Azerbaijan. It will also demonstrate that Iran is a destabilizing force, not only in the Middle East and the Gulf, but also in the Caucasus. Armenia is left in a difficult position, as it could be seen as complicit with Iran and an accessory to evading U.S. sanctions.
Tehran’s new posture in the Caucasus is almost certainly not a one-off. It is therefore worth asking if this newest revelation of Iran’s destabilizing behavior will elicit a response from Washington. If so, the United States should support Azerbaijan’s ability to defend its interests. If that comes to pass, then something positive might actually emerge from this whole unhappy episode.
Stephen Blank is an internationally recognized expert on Russian foreign and defense policies and international relations across the former Soviet Union. He is also a leading expert on European and Asian security, including energy issues. Since 2020 he has been a Senior Fellow at the Foreign Policy Research Institute www.fpri.org. From 2013-2020 he was a Senior Fellow at the American Foreign Policy Council, www.afpc.org. From 1989-2013 he was a Professor of Russian National Security Studies at the Strategic Studies Institute of the U.S. Army War College in Pennsylvania. Dr. Blank has been Professor of National Security Affairs at the Strategic Studies Institute since 1989. In 1998-2001 he was Douglas MacArthur Professor of Research at the War College.
Iran has a longterm ideological and military aim that doesn’t require the Syrian regime to reform, or redeem itself.
Simultaneous and cumulative pressures of the coronavirus pandemic, the global oil plunge and lingering conflict continue to afflict Syria, its economy, and the major actors involved in the Syrian civil war, not least Iran and Russia, the Bashar al Assad regime’s chief allies.
The multi-faceted predicament and its economic fallout seem to have triggered rare soul-searching and misgivings about the future of the Syria project among parts of the Iranian and Russian political establishments.
In the case of the Islamic Republic, the Trump administration’s relentless “maximum pressure” campaign of draining economic sanctions are an additional, and significant, cause for concern.
A number of media outlets affiliated with the Kremlin published rare and blunt restrictions on the Assad regime and its systemic corruption as a formidable impediment to post-conflict reconstruction.
Shortly after, an influential Iranian MP and ranking member of the Majlis National Security and Foreign Policy Committee went public about Tehran’s overall financial contribution to the Syrian war effort: “When I travelled to Syria, some said that I created [political] costs [for the Islamic Republic],” Heshmatollah Falahatpisheh noted in a video interview on May 20.
He was referring to a January 2019 trip to the war-ravaged country in during his year-long tenure as head of the committee, and meeting with Syrian Prime Minister Imad Khamis.
In the meeting, he had reportedly stressed, in apparent defiance of conventional political courtesy between the two traditional allies, that Tehran’s assistance to Damascus ought to be considered and settled in the framework of bilateral ties.
“But I should again repeat that we have perhaps given Syria $20 to 30 billion and should get it back; This nation’s money has been spent there,” Falahatpisheh added.
The statement echoes growing discontent among ordinary Iranians with the way the government sets its budgetary priorities and distributes scarce resources at a time when poverty is rapidly on the rise at home.
This was not, however, the first time official statements about Iran’s considerable expenditure in Syria since the outbreak of civil war in 2011 drew media attention.
In February 2018, Yahya Rahim Safavi, former commander-in-chief of the Islamic Revolutionary Guards Corps (IRGC) and current military advisor to the Iranian Supreme Leader Ayatollah Ali Khamenei, highlighted Moscow’s efforts to secure military, political and economic concessions in Syria, and insisted that Tehran should follow suit.
“I think Iran, too, can have long-term political and economic contracts with the Syrian regime and return the costs it has incurred in Syria,” Safavi stated at the time.
He added that Damascus was willing to repay Tehran’s debt through its natural resources and that the Islamic Republic was already “exporting from Syria’s phosphate mines.”
Concession stands
Both Russia and Iran are unsurprisingly seeking returns on their costly investment and intervention in Syria to keep the Assad regime in power.
While Moscow is particularly interested in restoring a semblance of stability and functionality — so that it can get post-conflict reconstruction off the ground and lead the initiative — Iran’s primary objective is military as well as ideological entrenchment, so that it can build an additional layer of forward defence and deterrence in its regional security structure.
Accordingly, while neither Iran nor Russia seek to establish anything remotely close to democracy in Syria or an alternative to Bashar al Assad and his Alawite-centered rule, it is easier for Damascus to accommodate Tehran’s demands — as it more or less consistently has so far — than to give in to political reconciliation by opening up to the opposition and reforming the constitution, as Moscow demands.
This is the main strategic dynamic behind the divergence of interests between the Islamic Republic and the Russian Federation in Syria, so much so that even Hassan Nasrallah, leader of Iran’s top unconventional ally in the region, has affirmed it in passing.
It is also arguably part of the reason why Turkey finds it more convenient to work with Russia than with the Islamic Republic in the context of the Syrian civil war.
In January 2019, Russian Deputy Foreign Minister Sergei Ryabkov rebuffed the idea of an “alliance” between the two power brokers in Syria, cautioning that, “I wouldn’t use this type of words to describe where we are with Iran.”
His unprecedented comments came only one day after Heshmatollah Falahatpisheh, then head of the Iranian parliament’s National Security and Foreign Policy Committee, inveighed against Russia for allegedly de-activating its S-300 missile defense systems in Syria during Israeli aerial operations. “It appears there is some sort of coordination between Israeli strikes and the Russian air defense units based in Syria,” he said.
Along these lines, in fact the long-term purpose of Israel’s increased strikes against Iran-linked positions and installations across Syria — the famed “campaign between wars” strategy — has been to raise the cost for Assad, as well as for the Kremlin, of Iran’s continued (para)military involvement in the Arab country and cause a rift between these allies and partners.
A relatively rare visit to Damascus by Iranian Foreign Minister Mohammad Javad Zarif last month and his meeting Assad himself, despite travel restrictions due to the coronavirus pandemic, was seemingly aimed at reassuring the Syrian regime leader that Tehran keeps backing him as long as the terms and conditions of their strategic alliance are intact.
Notably, Tehran’s unwavering support for Damascus was also expressed by Hossein Amirabdollahian, a former deputy foreign minister in Arab affairs and current director of international affairs at the Iranian parliament, who lauded Assad as the “great leader of fight against Takfiri terrorism in the Arab world” and dismissed rumors of an Iranian-Russian conspiracy to remove him as a “big lie and Zionist-American media’s game.”
Most of the critical comments recently published about the Assad regime in Kremlin-affiliated Russian outlets, such as RIA FAN, Pravda, Kommersant and Valdai Club, focused on economic-political corruption and the pressing need for reforms in the lead up to presidential elections in 2011, so that Syria could be brought back in from the cold and reintegrated into the international fold with Russian assistance.
In contrast, there have not been many such calls, let alone pressure, from Tehran on Damascus for constitutional reforms or a power-sharing arrangement between Assad and his domestic opponents as a necessary step towards a political settlement.
Internal fissures
Meanwhile, the curious case of Rami Makhlouf has further complicated the internal balance of power in Syria and fueled intense speculation about growing schisms within Assad’s predominantly Alawite support base.
It is not entirely clear what, if anything of substance, the Makhlouf-Assad row might have to do with Russia or Iran and their rivalry in Syria, but Makhlouf purportedly nurses grievances against Assad’s wife Asma and brother Maher, both of whom reportedly happen to harbor close connections with the IRGC.
On the one hand, Syria’s first lady, who runs a sprawling charity network in the country, has reportedly “partnered” with the Revolutionary Guards in a mobile service contract, reinforcing conjectures about the latter’s longstanding interest in keeping a tab on Syrian communications, a venture the IRGC has vigorously, and successfully, pursued at home in recent years.
Against this backdrop, it is worth noting that Syriatel, Syria’s biggest telecommunications firm and Makhlouf’s most prized business holding that was recently confiscated by the Assad regime, has 11 million subscribers, with half the revenues going to state coffers.
On the other hand, Maher, whose elite 4th Armored Division is believed to compete with Russia-led 5th Assault Corps, is trying to incorporate Shia militia forces within the former with the assistance of IRGC, which also seeks greater clout within the Syrian Republican Guard.
In an apparent attempt to strengthen his political hand in Syria and placate simmering tensions, Russian President Vladimir Putin elevated Moscow’s ambassador to Damascus, Alexander Efimov, to the post of his special representative to the Arab republic.
The Kremlin’s political readjustments in Syria come at the same time as Tehran continues to help the Assad regime stay afloat.
In March alone, Iran shipped almost 8 million barrels of crude to Syria, an extension of support that is very unlikely to be returned economically.
By Reuel Marc Gerecht and Ray Takeyh – May 29, 2020
Reuel Marc Gerecht is a senior fellow at the Foundation for Defense of Democracies. Ray Takeyh is a senior fellow at the Council on Foreign Relations.
Regime change in Iran is one of the biggest taboos in U.S. foreign policy. Bring it up and you will be scorned as a warmonger, a fomenter of chaos. Yet we have encouraged and welcomed the collapse of dictatorships in other countries, especially within the former Soviet empire. And we used severe sanctions against apartheid South Africa to bring fundamental change. The Islamic republic has been directly responsible for the deaths of hundreds of thousands in Syria. Is that a lesser sin?
The Iranian theocracy’s disregard for the rights and livelihoods of its people periodically drives them into mass protests (at great risk to themselves). Its imperialist ambitions endanger its neighbors. Yet American leftists routinely argue that we can never dare to replace it. Two liberal analysts recently warned in The Post that “it is fair to ask whether the political and social collapse of a country of 80 million people at a time of a global pandemic is in the United States’ — or anybody’s — interests.” To speak of its demise, much less try to hasten it, is considered untoward and egregiously ideological in polite Washington society.
To a remarkable extent, we have turned Iran policy into a debate about ourselves. If the regime is opposed by conservatives, liberals veer the other way, often trying hard to find something redeeming about the Islamic republic (at a minimum, it isn’t Saudi Arabia).
For them, Sen. Tom Cotton (R-Ark.) is reactionary, if not a tad villainous, because of his ardent opposition to Tehran. When Cotton prophetically warned Iran’s leaders in an open letter in 2015 that a nuclear agreement would not be binding on a Republican president, his colleague Sen. Chris Murphy (D-Conn.) described his move as “undermining the authority of the president,” while Secretary of State John F. Kerry professed himself to be in “utter disbelief.”
The advocates of cooperation with the clerical regime often play down its crude and constant anti-Semitism. Its misogyny and homophobia somehow do not invite calls for sanctions from liberals. The ardent left — for example, Sen. Bernie Sanders’s (I-Vt.) foreign policy staff — can see bigotry and bellicosity in any use of “mullah” to describe Iran’s religious government (even though “mullah” is a word used most often by Iranians to describe a cleric). And some even manage to blame Tehran’s harsh repression of its own people on anti-American animus that is allegedly empowering the hard-liners who would be weaker if Washington weren’t so mean.
If the intellectual classes can’t contemplate the demise of the Islamic republic, neither can the intelligence community, which has a knack for echoing the zeitgeist. Without seeing classified documents, one can be assured that a typical CIA memorandum will point out all the problems confronting the regime and end with pretty firm assurance of its survival. By temperament, our spies are rarely capable of spotting discontinuities.
Iran today is probably where the Soviet Union was in the 1970s, an exhausted regime mishandling every crisis it encounters. And the same intelligence services that just couldn’t see the Soviet Union dying don’t see the cracks in the clerical regime.
Arms control defines America’s approach to the Islamic republic. It did so during the Obama years, and it lingers in the Trump White House. The problem with an arms-control approach is that you have to pretend that your interlocutors are sufficiently “moderate” to seek regional stability. You have to pretend that the Iranians are willing to concede their religious ideology and imperial ambitions. Most importantly, you have to pretend that the regime you are dealing with is durable and can soften if given access to the global economy. Americans are particularly susceptible to this business argument, even though recent history (see post-Mao China) surely tells us that wicked authoritarianism can adapt to market imperatives.
Much of Washington fears that the only alternative to arms control is war. Far preferable would be a strategy of relentless pressure that with time cracks the regime. This was the definition of containment as envisioned by George Kennan. He advocated unrelenting patience with the Soviet Union; we should do the same with Iran.
It shouldn’t be hard to see that anti-Americanism is an inextricable part of this revolutionary Islamist state, or that Supreme Leader Ayatollah Ali Khamenei (an ardent fan and translator of the seminal Egyptian jihadist Sayyid Qutb), the ruling clerical elite and the Islamic Revolutionary Guards have no desire to create a normal country. Once you accept this reality (which many Democrats did before the Iran nuclear deal undercut their support for sanctions policy), regime change becomes the only viable option — assuming, of course, that you believe the United States has a role to play the Middle East in the first place.
Seeking regime change isn’t rude. It is pragmatic, cost-sensitive, humane and — in the best sense of the word — liberal.
American troops helped keep a lid on the Islamic State in Iraq. The Suleimani killing changed all that
BY SIMONA FOLTYN – MAY 29, 2020
On a cold morning this past February, a 9-year-old resident of Iraq’s Khatuniya village took his family’s livestock to graze in nearby meadows. When he didn’t return by late afternoon, two relatives went looking for him. The next morning, the two men, Qasem Mohammed and Abd Mohammed Sabah, were found dead on a dirt road outside the village.
The killings bore the hallmarks of Islamic State attacks the villagers knew all too well—the men were found with their hands tied behind their backs and bullet wounds in their heads. Still, they came as a surprise. For nearly a year, the area had enjoyed a relative respite from violence, the result of a systematic campaign of raids conducted jointly by Iraqi and U.S. troops in late 2018 and early 2019.
The raids, reported here for the first time, picked off one Islamic State member after another, gradually uprooting the militants from villages and forcing them to retreat to nearby mountain areas.
But the attack in Khatuniya in February marked the beginning of the Islamic State’s return to the area—a resurgence that seems to be tied to the ongoing escalation between the United States and neighboring Iran.
That friction peaked when the U.S. assassinated the Iranian military leader Qassem Suleimani on Iraqi soil in early January of this year. In response, the Iraqi prime minister and parliament both called for the withdrawal of foreign troops from Iraq. The U.S.-led coalition suspended its activities to boost protection of its own forces.
“When the tensions between the U.S. and Iran increased, the frequency of the raids went down in this area, and ISIS activities went up,” said Hassan al-Soofy, a local intelligence officer who discovered the bodies of the shepherds in Khatuniya. “The situation became suitable for them [Islamic State fighters] and it helped them move.”
Since February’s Khatuniya killings and the disappearance of the boy, who was released after being held briefly, the Islamic State has claimed responsibility for hundreds of operations—from attacks on civilians to coordinated ambushes against security forces. The group has also capitalized on the coronavirus pandemic, which forced the coalition to evacuate most trainers. Iraqi security forces redeployed some of their troops to urban areas to enforce lockdown measures.
“We are terrified at night,” said Hamid Muhsen, the mukhtar, or village chief, of Khatuniya, located in Riyadh district in the northern Kirkuk province. “I swear, the situation isn’t good. ISIS is present in the village.”
Describing the U.S. Role in Raids on the Islamic State
Experts believe that the Islamic State has not yet restored itself to the military capability that enabled the group to capture significant swaths of territory in 2014. But the U.S. coalition that helped defeat it and keep a lid on its insurgency is scaling down. Although hostilities have slightly cooled off, the skirmishes between the United States and Iran earlier this year will likely pave the way for a permanent reduction of American troops in Iraq—further improving the Islamic State’s prospects.
Friction between the U.S.-led coalition and Iranian-backed armed groups, called the Popular Mobilization Forces (PMF), have long complicated anti-Islamic State operations in Iraq. But the U.S. assassination Suleimani and the PMF’s deputy commander, Abu Mahdi al-Muhandis, in Baghdad earlier this year raised fear of a U.S.-Iran war on Iraqi soil.
By the time tensions cooled down and the coalition began ramping up support again, a second round of escalation in March resulted in the deaths of three coalition personnel, accelerating troop withdrawals from several bases in Iraq that had been used to stage joint operations against the Islamic State. The U.S. and Iraq are set to renegotiate the terms of their military cooperation in June.
In the meantime, the disruption to operations has revealed just how deeply involved U.S. forces have been in the fight against the Islamic State in Iraq well after the group’s territorial defeat in 2017—the details of which are reported here for the first time.
Iraqi commanders insist that “on the battlefield, it’s only Iraqi troops,” in the words of Gen. Talib al-Kinani, until recently the top commander of the Iraqi Counter Terrorism Service. Maj. Gen. Eric Hill, the commander of special operations for the U.S.-led coalition, echoes this message, maintaining that the main role of the special forces was to train and advise Iraqi partners. “I would say largely these are Iraqi-driven and Iraqi-executed missions. There’s on occasion times where we will go out into the field with them in an advisory capacity, but the Iraqis are executing the mission,” he told Foreign Policy.
But conversations with dozens of civilians and security forces on the ground suggest that the direct involvement of U.S. ground troops in operations was a regular occurrence in 2019, with several such raids conducted per month. American ground troops coordinated airstrikes, processed intelligence, and—contrary to the coalition’s official position—engaged in combat. Two Iraqi officers whose forces partner with U.S. special operations forces told Foreign Policy that during these joint missions, Iraqi and American soldiers moved together as “brothers in arms.” (No media have been allowed to join these special operations.)
Foreign Policy investigated several such missions—conducting interviews in rural areas of the Kirkuk and Nineveh provinces. The raids were mostly carried out under cover of darkness, and at least two of them resulted in American casualties. While many villagers suspected that Americans participated in the operations, their involvement became evident only when missions went awry, forcing the troops to remain on the ground into the daylight hours, when they could be seen by locals.
One such operation took place in April of last year, on the seam between the Arab and Kurdish areas of Iraq. A convoy composed of American and Iraqi special forces left the K1 Air Base in Kirkuk that evening, driving along unlit country roads, until it reached a checkpoint southeast of Kubaiba. The village had been a front line in the battle between Kurdish Peshmerga fighters and the Islamic State. Its civilians fled during the fighting and never returned. Even after the militants were officially cleared from the area in 2017, sleeper cells remained behind, using the abandoned village as a launchpad for attacks on nearby checkpoints and villages. They also dug tunnels that allowed them to retreat to the mountains when necessary.
The convoy of some 15 vehicles stopped at the checkpoint, according to Muhannad Saleh, a soldier with the tribal PMF who manned the post that night. (The PMF is Shiite-led, but it includes Sunni factions that draw fighters from local tribes.) Nine were black Humvees belonging to Iraq’s Counter Terrorism Service, and six were sand-colored M-ATV vehicles used by U.S. special forces. Part of the convoy remained near the checkpoint, while the rest moved north toward Kubaiba. According to an Iraqi officer with knowledge of the raid, the cars first stopped near Muzerir village, a mile east of Kubaiba. Both American and Iraqi soldiers filed out of the vehicles, moving in tandem as they searched house after house. When they found no one, the ground force commander made the fateful decision to continue on foot toward Kubaiba, perched further uphill. They walked for several hundred yards when a group of Islamic State members opened fire from a nearby house. The soldiers had no immediate backup from the gunners atop the vehicles—which had been left behind. Coalition aircraft were hovering above, but the ground troops’ formation had broken down, making it impossible to call in a precision airstrike without risking friendly fire.
For two hours, Saleh could hear heavy gunfire, and soon, reports of casualties: Two Counter Terrorism Service soldiers died, and four others were wounded. Up to 12 members of the Islamic State were killed in the raid. The forces remained in the area until 7 a.m. “Usually, when the Americans do missions, they don’t let the sun rise, because they want to withdraw,” Saleh told Foreign Policy. Shepherds woke up to the surprising sight of American and Iraqi troops driving past their houses.
The coalition, which usually shares updates on anti-Islamic State operations with media, published no details of the April 19 operation. In an emailed response to a question about the raid, the coalition confirmed that two U.S. troops and a translator were injured as a result of enemy fire.
The U.S. forces incurred casualties in at least one other raid in 2019. On Aug. 10, Iraq’s SWAT teams from Nineveh province together with American and Canadian special forces launched an operation to clear a forest-covered island in the middle of the Tigris River, near the village of Kanoos.
A member of the SWAT team described it as a difficult operation, with the Islamic State using its tunnel network to ambush the forces from behind. The firefight lasted some two hours, killing Gunnery Sgt. Scott Koppenhafer and a U.S. military contractor and wounding another U.S. service member and two members of the SWAT team.
The secrecy surrounding these raids is to some extent inherent in special operations. But the Americans’ low profile also points to the increasingly tenuous position of U.S. troops in Iraq—a country now caught in the tug-of-war between the United States and Iran.
The coalition faced growing restrictions on the use of Iraqi airspace in the second half of 2019, after several mysterious blasts hit weapons depots and bases belonging to the Iran-backed PMF. No one claimed responsibility, but the PMF accused the United States and Israel of targeting its positions and pressured the Iraqi Joint Operations Command to impose greater restrictions on American surveillance drones and aircraft. The United States denied any involvement.
“When [the joint operations] were allowed, they were effective. But there were so many times that they were not allowed. Already in 2019, we were facing significant reduction of access,” said Michael Knights, a senior fellow at the Washington Institute for Near East Policy, who specializes in military affairs and who has advised the U.S. military in Iraq.
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Throughout 2019, the Iraqi government expanded so-called Restricted Operating Zones to areas where Iran-backed armed groups were based, including areas around Baghdad and Diyala provinces where the Islamic State was active. Flying over these areas required special approval. “Sometimes they’d say yes, sometimes they’d say no,” a senior coalition official said, requesting anonymity due to the sensitive nature of the issue.
American ground forces faced similar movement restrictions. An Iraqi officer who has partnered with U.S. special forces to conduct anti-Islamic State operations said that the so-called Islamic resistance—PMF groups particularly hostile toward the United States—repeatedly prevented convoys composed of both Iraqi and American troops from accessing targets in their areas of control, even though the missions had been approved by the Joint Operations Command.
In one such instance north of Baghdad, the Iraqi officer went to speak with a commander from the PMF’s Badr Organization to negotiate the convoy’s passage. “He told me, ‘This is our sector and we welcome you to conduct your operation. You are Iraqi and we are Iraqi. But honestly, we will not allow American forces to enter, even if you have the approval from the prime minister himself,’” the Iraqi officer recalled the Badr commander saying. In at least one instance in 2019, the PMF fired at a convoy composed of American and Iraqi special forces.
To avoid hostilities, Joint Operations Command has at times nixed operations with an American ground component near PMF areas. Now, mounting threats by the so-called Islamic resistance to strike against American targets to avenge the deaths of Suleimani and Muhandis have further raised the risk of confrontation, making U.S. participation in such operations increasingly untenable.
“The situation will be more difficult in terms of conducting our missions,” said the Iraqi officer who regularly partners with American special forces. Asked if he could do without them, he answered: “We can achieve victory, but we will bleed more.”
Coalition officials, often frustrated at Iraq’s unwillingness to rein in the PMF, say that the pause in coalition activities may be a natural opportunity to wean Iraqi partners off of U.S. support. “In the near term, there is a reduction in the effectiveness of those operations,” said a senior coalition official. “But in the long term, the whole purpose of this is that it’s only Iraqis securing their country against ISIS.”
But civilians in rural areas have watched Iraqi security forces struggle to effectively fight the insurgency.
Since 2018, the rural areas around Kirkuk have witnessed several large-scale military operations by the Iraqi Army and police to clear sleeper cells. Military commanders declared these operations a success, but civilians say the militants would hide while operations were underway, only to reemerge days later and resume their campaign.
Then, intelligence-led raids conducted by U.S. and Iraqi special forces, coupled with police deployment deeper into rural areas, turned the tide.
But in March this year, American troops withdrew from the K1 Air Base in Kirkuk. The joint operations have largely ceased, leaving the villagers once again vulnerable to the Islamic State.
By Philip H. Gordon and Ariane M. Tabatabai – March 25, 2020
Philip H. Gordon is the Mary and David Boies senior fellow in U.S. foreign policy at the Council on Foreign Relations. Ariane M. Tabatabai is an adjunct senior research scholar at the School of International and Public Affairs at Columbia University.
Ever since the Trump administration withdrew the United States from the Iran nuclear deal in May 2018, U.S. policy toward Iran has been nothing if not consistent. Any sign — real or imagined — that Iran was being deterred or positively influenced by American pressure was seen as proof that American policy was working and that sanctions should be maintained or increased. At the same time, any indication that Iran was resisting U.S. pressure — continuing to interfere in neighboring countries, attacking U.S. interests or expanding its nuclear program — was interpreted as evidence of Iran’s bad behavior and also meant more sanctions were the answer. The level of U.S. pressure, described from the start as “maximum,” has somehow been steadily increased with regular waves of new sanctions, designations, restrictions and, as of January 2020, periodic military strikes and the targeted killing of Iranian Maj. Gen. Qasem Soleimani.
The problem with “maximum pressure,” however — a policy ostensibly designed to force Iran to accept an improved nuclear deal and end its meddling in the Middle East — is that two years in, it has done nothing to advance either of those goals. Indeed, even in the administration’s own reckoning, Iran is now a more destabilizing actor in the region. It has targeted Gulf shipping with mine attacks, undertaken drone and missile strikes on Saudi refineries and pipelines, provided military support to violent proxies in Lebanon, Iraq, Yemen and Syria, and is now no longer abiding by the main limitations of the 2015 nuclear deal. To be sure, U.S. secondary sanctions have wreaked havoc on the Iranian economy — which was in free fall even before the recent onset of global recession and collapse in oil prices — but imposing pain on Iranians was supposed to be a means to an end, not an end in itself.
With Iran now one of the focal points of the covid-19 outbreak, the administration’s maximum-pressure campaign might be about to do considerable additional damage — but not only to Iran. In the face of an impending humanitarian catastrophe in Iran and desperate appeals for an urgent international response, the Trump administration has, unsurprisingly, responded by calling for more pressure and ever more sanctions, the latest of which were imposed on March 18. Some in the administration, led by Secretary of State Mike Pompeo and acting Director of National Intelligence Richard Grenell, now reportedly believe the time is right for retaliatory military strikes on Iran, hoping that might finally prove to be the way to get the regime to back down.
Unfortunately, rather than leading to Iranian capitulation, doubling down on this approach will more likely lead to many more Iranian deaths, further the spread of the virus to Iran’s neighbors, cast the United States as a villain in Iran and much of the world, and allow China to posture as the more responsible actor when it in fact bears a significant degree of blame.
The responsibility for Iran’s tragic mismanagement of the pandemic, of course, falls squarely on the Iranian government, whose disinformation campaign, corruption and incompetence have cost some 2,000 lives so far. But that reality does not change the fact that Iran’s covid-19 problem isn’t just an Iranian problem but also a threat to the region and the world.
Iran shares long, porous borders with neighbors, including Afghanistan and Iraq, two countries to which the United States has dedicated trillions of dollars and thousands of lives to stabilize. Turkey, Pakistan and Iran’s neighbors in the Gulf are also affected by the spread of covid-19, as are Syria and Lebanon, states with significant ties to Tehran. If the pandemic spreads in such conflict-torn nations as Syria and Yemen, vulnerable populations in refugee camps and displacement sites could find themselves in an even more dire condition, leading to further refugee flows to the West. The spread of the coronavirus could also affect international inspectors’ ability to remain in Iran, complicating international efforts to monitor its nuclear program.
Even in the scenario in which U.S. pressure somehow leads the Iranian regime to collapse — which, though unlikely, seems to be the administration’s real goal — it is fair to ask whether the political and social collapse of a country of 80 million people at a time of a global pandemic is in the United States’ — or anybody’s — interest.
The answer to this challenge is not to abandon the critical goals of preventing Iran from developing nuclear weapons or of containing its regional influence, nor is it to provide blanket sanctions relief that the regime could use for anything beyond humanitarian purposes. Instead, it is for the United States to act in its own interest with measures that can help alleviate the certain catastrophe that maintaining the current policy will likely produce.
The United States should pause any further escalation of its failing sanctions campaign, offer Iran whatever help it needs to fight the pandemic; expand the list of humanitarian and medical goods exempt from U.S. sanctions, and pledge not to sanction any bank, company or nongovernmental organization involved in providing medical support. Washington should also support an International Monetary Fund loan to be used exclusively to combat the virus and put further sanctions relief on the table in exchange for Iranian nuclear restraint and cooperation in the region.
Critics will say this approach would only reward Iranian bad behavior and bail out a regime that bears responsibility for the tragedy affecting its country. The alternative, however, could be a far greater tragedy that affects us all.
In an administration short on diplomatic talent, Zalmay Khalilzad stands out.
His title is US Special Representative for Afghanistan Reconciliation and he is charged with extricating the United States’ military presence in that country. Tangentially, Khalilzad’s deep background as a multilingual former ambassador to Afghanistan, Iraq, and the United Nations—and his nature as an inveterate schmoozer—have put him in a position to revive US diplomatic engagement with Iran and to help de-escalate what had been a dangerous rise in tensions.
Recently, under United Nations (UN) auspices, there was a meeting of something called the “Six Plus Two.” Created after the Taliban seized control of most of Afghanistan in 1996, this format brings together the six neighbors of Afghanistan, Russia, and the United States to discuss how to stabilize Afghanistan.
In a digital chat with the Atlantic Council on May 20, Rosemary DiCarlo, UN Undersecretary General for Political and Peace-building Affairs, confirmed that Khalilzad had been present at a recent virtual Six Plus Two meeting, along with diplomats from Russia, Iran, and Afghanistan’s neighbors. She noted that this was a “unique” convening of American and Iranian officials at a time when other direct channels appear shut.
In the late 1990s, this format was an important venue for US-Iran interaction in the absence of formal diplomatic relations. Both countries used the meetings to send signals to each other and Secretary of State Madeleine Albright even attended a session in 1998, hoping to encounter her Iranian counterpart. She eventually did in 2000.
After the terrorist attacks of September 11, 2001, the multilateral meetings morphed into unadvertised bilateral US-Iran talks about how to stabilize Afghanistan, deal with al-Qaeda detainees, and, finally, discuss the run-up to the US invasion of Iraq. More than a dozen meetings were held from the fall of 2001 to May 2003 over potato chips and non-alcoholic drinks at hotels in Geneva and Paris. Ryan Crocker, a veteran US diplomat, led the sessions before Khalilzad, a senior director on the White House National Security Council, at the time, took over. His Iranian counterpart was Mohammad Javad Zarif, a deputy foreign minister who was soon to become Iran’s ambassador to the UN, and who is now Iran’s foreign minister.
Khalilzad, an Afghan native who went on to become the US ambassador to Afghanistan, Iraq, and the UN, has used his fluent Dari—a close cousin of Persian—to chat with Iranian counterparts in a variety of settings. He recognized then. as now, that Iran has enormous capacity to help or hinder the political stability of its neighbors and, thus, advance or retard US interests in the Middle East.
One of the many flaws of the Trump administration’s heavy-handed approach toward Tehran is that it has sacrificed the interests of Iran’s neighbors in the pursuit of “maximum pressure.” Countries, such as Afghanistan and Iraq, need to trade with their large neighbor in order to be successful. Consequently, sanctions re-imposed by the US—after they quit the Iran nuclear deal two years ago—have hurt Iran’s neighbors and complicated their relations with the United States.
The US decision, in May 2019, to impose a total embargo on the sale of Iranian oil provoked a sharp rise in tensions in and around the Persian Gulf. This included attacks by Iran-backed Iraqi militias on US forces in Iraq, which prompted the US assassination of Quds Force commander Qasem Soleimani on January 3. Iran retaliated, directly, against a base where US troops were stationed, causing mild to severe brain injuries to one hundred Americans. Another spasm of attacks occurred in March, leading to the death of two more Americans and a British citizen, as well as three Iraqi soldiers, an Iraqi civilian, and several militia members.
In recent weeks, however, tensions appear to have abated, somewhat, in Iraq. Iran gave a green light to the nomination of Iraq’s latest prime minister, Mustafa al-Kadhimi, even though he is considered pro-US to some extent and was intelligence minister when Soleimani was assassinated.
Furthermore, DiCarlo said Iran had been helpful in convincing squabbling factions in Afghanistan’s government to reach an agreement on a joint committee to negotiate with the Taliban, with whom Khalilzad has forged a tentative pact. “Iran is now playing a constructive role regarding the Houthis” in Yemen, DiCarlo added, without providing details.
The coronavirus, which has struck Iran hard, may account, in part, for Iran’s new reasonableness. Tehran also may not want to antagonize the US in advance of presidential elections that could oust Trump and, with him, the “maximum pressure” campaign. Iran seeks a US military withdrawal from the entire region and has always played a longer game than the ones designed by revolving American administrations. Iran has also shown a willingness to engage with the US when the time and venue have been right. The Six Plus Two proved useful in that regard two decades ago and could do so, again, especially, with a diplomat like Khalilzad at the table.
Prominent Iranians Including Dariush Eghbali Decleration of Coalition of Committed for Secular Democracy in Iran for Dissolution of Islamic Republic
In these dark and gloomy days for the people of Iran, we representatives of segment of the political and civic society activists of Iran, in solidarity with all political parties and civic society groups representing diversified ideologies, ethnicities and beliefs, as well as jurists and lawyers advocating women and children’s rights, environmentalists and human rights activists, join our voices with the countless murdered activists and prisoners of conscience and their survivors, who have sacrificed life and treasure for the pursuit of a democratic and secular system of government based on social justice, Universal Declaration of Human Rights, and Iran’s territorial integrity.
In this, we seek to be united in our pursuit, through non-violent civil disobedience, the end of the theocratic and totalitarian state of the Islamic Republic and the creation of a democratic and secular constitution through referendum.
In these crucial times, as the people of Iran sacrifice their lives and treasure in their pursuit for a better future, the theocratic regime of the Islamic Republic, through its disinformation agents and lobbyists, while pretending to be members of the “opposition” or “reformists”, continuously work against the best interests of the people of Iran. We the signatories of this Decleration of Coalition of Committed for Secular Democracy in Iran, therefore, together with all the political and civic society activists and advocates, who only want a free, democratic and just government, declare our readiness for cooperation, collaboration and participation.
HAMAVA
Coalition of Committed for A Secular and Democracy in Iran
The era of arms-control diplomacy in U.S.–Iran relations has ended. The Trump administration will not be able to negotiate a new nuclear agreement with Iran. And should the Democrats reclaim the White House, they will not be able to revive the old one. None of this has much to do with the fact that Trump withdrew from the Iran nuclear deal, the Joint Comprehensive Plan of Action (JCPOA). Rather, it is the result of the ascendance of Islamist hardliners and scientists who are more interested in the bomb than in another accord with America.
Two key factors made the JCPOA possible. The first was an Iranian president who believed that the key to his country’s economic fortunes was an arms-control agreement that would pave the way for foreign investments. The second factor, which is rarely discussed, was the willingness of the Iranian scientific community — specifically the folks in the Atomic Energy Organization, the country’s nuclear-regulatory body — to accept restrictions on the program. Neither factor is present today or likely to recur.
Upon assuming the presidency in 2013, Hassan Rouhani sought to resuscitate an economy that had essentially collapsed. The sanctions imposed on Iran by the United States and Europe because of its nuclear infractions had drained its treasury. Rouhani was too careful a politician to embark on structural economic reforms whose political ramifications he feared. His formula for dealing with all this was to attract foreign investments and restore Iran’s place in the global economy. None of this would be possible without an arms-control agreement that would demolish the wall of sanctions.
In 2015 a triumphant Rouhani obtained an agreement that he assumed would trigger the return of international commerce. At the instruction of President Barack Obama, Secretary of State John Kerry traveled throughout Europe pleading with corporate boards to place their bets on Rouhani. Kerry advised European banks and companies that had left Iran because of sanctions to return now that the agreement had removed the barriers to trade. But Iran was too risky a country, and its imperial rampage across the Middle East too troubling to bankers and investors. Iran did manage to sell more oil, but the economic boom never came. Inflation continued to ravage the average Iranian household while unemployment deprived yet another generation of a meaningful future. In 2020, as Rouhani’s presidency limps toward its end, the notion of relying on foreigners bearing gifts has no constituency in Tehran.
In the midst of this trouble, Rouhani’s government has been jolted by the coronavirus. The mishandling of the outbreak of the virus is yet another indication of the combination of incompetence and mendacity that has characterized the Islamic Republic’s tenure. The regime at first denied the scope of the problem, even though scores of its own officials were stricken by the illness, and has yet to put together a system for containing its spread. Iran was one of the first nations to be afflicted by the virus and will be one of the last to recover.
As for Rouhani’s economic postulations, these never sat well with Supreme Leader Ali Khamenei and the hardliners. In their eyes, a revolution against international norms should not be beholden to Westerners. Khamenei has long championed an outlandish theory called the “economy of resistance,” according to which Iran can meet its needs by relying on its own people. This brand of autarky mandates weaning the country off its oil exports. Khamenei recently said, “I strongly believe that the key remedy to the country’s problems stands in promoting internal production” and that “the major factor causing our economic problems is dependence on oil.” The notion that a nation of 80 million people can dispense with its principal export commodity and sustain itself by relying solely on its internal markets borders on lunacy. But for Khamenei, the issue is not financial balance sheets but rather shielding the revolution from external influences. The lesson that he learned from a decade of confrontation with the West over Iran’s nuclear program is that, so long as Iran depends on oil and natural gas, it will be vulnerable to outsiders who control the market. If the price of the revolution is national poverty, he is willing to pay it.
The themes of isolation and autarky have been picked up by Khamenei’s hardline disciples. Mohammad Reza Naqdi, a senior commander of the Revolutionary Guards, insisted that “our primary problem is that too many people believe that our economic difficulties will be solved if we establish ties with America.” A former mayor of Tehran, Mohammad Baqer Qalibaf, who was recently elected to the parliament and hopes to become its next speaker, chimed in to claim that only 30 percent of the country’s problems are due to sanctions while the remaining 70 percent are the result of poor management. But the conservatives are hardly reliable custodians of the economy, as indicated by the disastrous presidency of Mahmoud Ahmadinejad, which left the country nearly bankrupt.
Still, under the watchful eye of Khamenei, the hardliners are beginning to wrest control of the elected institutions from Iran’s enfeebled moderates. The hardliners were always in charge of the most consequential state organs, such as the security services and the judiciary, but now they are extending their tentacles throughout the system. In the most recent parliamentary elections, the Guardian Council, which is responsible for vetting candidates for public office, disqualified most reformers, thus ensuring a conservative majority. A similar pattern is likely to repeat itself in the next presidential election, to be held in 2021. The new crop of reactionaries adhere to Khamenei’s eccentric theories of economic planning. They are not likely to accept any restraints on Iran’s nuclear program in exchange for Western commerce. The era of dangling Western carrots to induce the Iranians to give up their nuclear assets is over.
The conventional wisdom has long insisted that Iran agreed to the nuclear accord because of the pressure of sanctions. There is no doubt that the financial stress caused Rouhani to look for escape hatches. But what tilted the Islamic Republic toward the agreement was a subtle debate taking place within the Atomic Energy Organization, as exemplified by the stances of Ali Akbar Salehi and Fereydoon Abbasi, who led the agency at different times and had contrasting ideas about how to attain the capacity to make nuclear weapons. By understanding this debate, we can appreciate why Iran opted for an agreement in 2015 and why it will not do so today.
In interviews, Abbasi portrays himself as an authentic revolutionary who earned a doctorate in nuclear physics in an Iranian university rather than going abroad. His prominence was ensured in 2010 when, while a university professor, he was the target of an assassination attempt, most likely by Israel. Less than three months later, he was put in charge of the Atomic Energy Organization. Abbasi believed that Iran must continuously expand its nuclear capacity, even if that meant relying on primitive technologies. He kept adding vintage IR-1 centrifuges to Iran’s growing stock of machines and talked about enriching uranium at ever-higher levels. In the firebrand Ahmadinejad, Abbasi found the ideal patron, a president whose truculence required an expanding nuclear program. But Iran paid a heavy economic price for those incremental gains, and as the United Nations condemnations piled on, no one could guarantee that Iran’s nuclear sites were safe from attack by America or Israel.
All this did not sit well with Salehi and many within the Iranian scientific community who believed that Iran needed to modernize its infrastructure and above all develop a new generation of advanced centrifuges that could operate with efficiency. The modernizers were indeed the cannier bomb-makers, for they realized that once Iran had a reliable inventory of advanced centrifuges it could then quickly manufacture material needed for nuclear bombs. They further knew that a limited cascade of such machines could be installed in small facilities that could easily evade detection, but that such a clandestine nuclear apparatus would require state-of-the-art technology. All Abbasi was doing was building clunky machines prone to break down. And he needed thousands of such devices, which meant that his installations were too large to escape detection.
In 2013, Rouhani’s presidency tilted the balance of power within the Atomic Energy Organization toward the modernizers. Abbasi was dispatched back to the university, and Salehi assumed control of the agency. Regarding a possible nuclear agreement with the U.S., Salehi’s most important demand was a vibrant research-and-development program to renovate the nuclear infrastructure. One of his aides, Pezhman Rahimian, conceded, “The current manager of the organization believes that we should not have installed this number of IR-1s, since plans were made to replace these old centrifuges with new ones.” So Salehi was prepared to junk a considerable number of the antique machines that his predecessor had assembled. In 2015, Iran needed approximately eight years to complete the work on the new generation of centrifuges. The JCPOA stipulated that Iran could install such machines at precisely that time. John Kerry got his talking point: In 2017 he could go around claiming, “When we sat down to begin that negotiation, there were more than 19,000 centrifuges spinning. . . . The number of centrifuges today is down to about 5,000.” What he neglected to mention was that those machines were to be phased out anyway.
In summer 2015, as Iran debated the nuclear accord, the modernizers laid their cards on the table. Salehi led the charge, insisting, “According to the JCPOA, we have kept our nuclear program in accordance with our needs and requirements for research and development.” Rouhani similarly stressed, “Through this agreement, we have paved the way for the country’s speedy development in the research field and for the progress of peaceful nuclear science.” Iran’s once-illicit nuclear program was now legitimate, its attempt to upgrade its technologies accepted by the United States and the international community.
In the intervening years, Iran has steadily raised its technical capacity. In 2017, Salehi boasted, “If we want to, we can enrich to 90 percent” (weapons-grade). As part of its reaction to America’s withdrawal from the JCPOA, Iran has routinely renounced aspects of the agreement. In January it went one step further and declared that it would discard all its obligations. The assembly lines were already humming along, with newer models of centrifuges in production. The most recent report by the International Atomic Energy Agency reveals that Iran has now accumulated sufficient enriched uranium for at least one bomb. And the agency is being denied access to two sites of suspicious activity. Iran’s nuclear program is approaching a takeoff point; it needs just a few more years to become state-of-the-art.
The success of the modernizers means that a critical constituency that supported the previous diplomatic efforts to resolve the nuclear issue is no longer inclined toward compromise. The modernizers are in charge, and they will not concede on capabilities that they have struggled to bring on line over the past few years. The Trump administration is sensibly insisting on an agreement that shuts down Iran’s enrichment plants, something that Salehi and his cadre will not accept. Joe Biden, like the other Democratic presidential candidates, has talked of returning to an agreement that is already disappearing as its many sunset clauses age. If the Democratic nominee wins in November and wishes to negotiate an extension of those restrictions, that effort will be met with a wall of resistance from Iran’s Atomic Energy Organization.
Although Rouhani and his cagey foreign minister, Javad Zarif, have garnered the most attention for negotiating the JCPOA, the critical actor in convincing Khamenei to sign off on the accord was Salehi. The MIT-trained physicist has always been Khamenei’s most ingenious bomb-maker. And it is unlikely that Khamenei, whose imperial ambitions in the Middle East require the ultimate weapon of intimidation, will reject the advice of his trusted scientists for the sake of another agreement with the United States and its allies.
3
In today’s Iran, neither the political class nor the scientific establishment wants a new nuclear agreement. Khamenei and the hardliners don’t believe that the sanctions are the primary cause of their financial predicament and insist that they can revive the economy by isolating it from global markets. They are wrong, and it makes them impossible interlocutors for enterprising Americans. In the meantime, Salehi is on the verge of modernizing a nuclear infrastructure that can produce bombs quickly and, he hopes, without getting detected. All this means he will not yield to any proposed restrictions.
It is time we abandon the delusion of arms control and focus on undermining a regime that has lost its popular mandate. The Islamic Republic is bound to follow other discredited ideological experiments of the 20th century into the dustbin of history. Instead of chasing another agreement, we must adopt Ronald Reagan’s famous dictum: We win, they lose.
DUBAI, May 14 (Reuters) – Iran is taking advantage of a stock market boom to boost state revenues by selling stakes in state companies, but risks political repercussions if those buying shares get burned.
While Iran’s already weak economy has been hit by the coronavirus crisis and an oil price slump, its stock market has risen 100% in local currency terms since March, encouraging many Iranians to seek higher returns than those available in cash.
“People are withdrawing their savings from the banks to buy stocks. The daily interest rates have dropped from 15% to 8% in the past weeks,” one bank employee in Tehran told Reuters.
Iran’s deteriorating economy, largely the result of sanctions re-imposed by the United States over Tehran’s nuclear programme, has prompted widespread protests since late 2017.
Thousands of mainly lower middle class Iranians took to the streets in November to demonstrate against a fuel price hike that plunged Iran into its biggest crisis since 1979.
In response, authorities said last month they planned to allow 49 million Iranians to trade so-called Justice Shares, a scheme launched in 2006 to hand heavily-discounted shares in state firms to people on lower incomes.
“The establishment is very well aware of all these economic hardships … and one of our concerns is the revival of protests like last year,” a senior government official, who asked not to be named, said. “The aim is to show people that the Islamic Republic cares about them.”
Justice Shares, which have a total value of around $19 billion at the free market rate, have given holders sporadic dividend payouts over years, but could not previously be sold.
Allowing holders to cash in gives them a one-off capital gain and increases liquidity in the stocks and the wider market.
Some officials fear investors are getting carried away.
“The government might be able to collect cash, but people will get poorer when the bubble bursts sooner or later,” a senior official at Iran’s Central Bank, speaking on condition of anonymity, told Reuters.
Ahmad Naderi, head of research institute and social studies at Tehran University who was elected as a member of parliament last year but has yet to be sworn in, said he feared a bubble that would burst.
“I am worried about its social and security consequences in the near future: riots bigger than 96,98 (2017,18) and definitely bigger than the 70’s,” he said on Twitter on May 6.
A Tehran Stock Exchange (TSE) spokesman denied there was a bubble in the country’s stock market. Iran’s economy ministry declined to comment.
SOCCER SHARES
Tehran is using the stock market’s rise to embark on a long-promised privatisation drive aimed at boosting state revenues, battered by U.S. curbs on oil sales and a decline in other exports as borders closed during the coronavirus pandemic.
It has also listed an exchange-traded fund with its shares in banks and financial institutions and has said it plans to do the same for government stakes in mining, steel and petrochemicals firms, as well as privatising other state-owned firms and two soccer clubs.
TSE data shows the share prices of state-controlled companies like the Telecommunications Company of Iran or the Iranian Aluminium Company have risen by 100% since early March.
The sharp devaluation of the rial since 2018 has made foreign imports more expensive and boosted the shares of some local companies, due to rising demand for their products.
A lack of alternatives for investors, high inflation and the difficulties of investing abroad because of sanctions has fuelled a drive to the stock market.
“Housing prices have sharply increased, gold and (the) dollar are too expensive and not affordable for many people. Therefore people have one safe option to invest and that is the stock market,” an official at Iran’s economy ministry said.
The government last month launched its largest ever initial public offering (IPO) with a 10% sale of the Social Security Investment Company (SHASTA), the investment arm of Iran’s largest pension fund, which raised $437 million.
Zohreh Mirsarafi, 62, was one of around two million Iranians who bought into the 8 billion shares in SHASTA which were offered at around 8,600 rials on the TSE.
“I cannot live with my $200 salary. To make ends meet, I bought shares with my savings,” the retired teacher, who lives in Tehran, told Reuters.
SHASTA shares were trading at 16,324 rials on May 14.
Tehran-based economist Saeed Leylaz forecasts Iran’s stock market will rise to 1.5 million points, from just over 1.017 million now, before dropping by around 12% and then stabilising.
“Iran is experiencing tough economic times … Considering limited investment options … the stock market is the only place where people’s capital can be protected,” Leylaz said.
Maciej Wotal, fund manager at Amtelon, said that while he was bullish on Iranian equities in the long term, the stock market had recently become “overheated” and the European fund was “waiting for a better moment to increase our allocation”.
While Iranian authorities expect privatisations to increase productivity, boost the private sector and create jobs, some analysts say a lack of foreign investors and the fact that the government will still be in control means little real change.
Eurasia Group described Tehran’s privatisation policy as “a cosmetic step” which on its own “does little to tackle the systemic problems in the economy”.
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