Sept 2017

Iran Case File SEPT 2017

Executive Summary This report tracks the most notable developments in Iran in the month of September 2017. It studies three aspects of the Iranian affairs on the Internal, Arab, and International levels.

I. INTERNAL AFFAIRS

This aspect is divided into four parts: 1. Presidency of the Republic This part discusses the following developments: a. The Veteran Clerics Association demands president Rouhani to concentrate on the economy and take the economic challenges as his top priorities during his second term of presidency b. The accuracy of the news about Speaker of the Iranian parliament, Ali Larijani’s intention to run the presidential elections in 2021 and the indications of his approach of some Reformer leaders recently. c. The demands from Rouhani to end the house arrest imposed on the Green Movement leaders

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d. The Iranian Sunnis’ threats to divert their political support from Reformers to Conservatives when president Rouhani broke his word after winning the presidential elections and excluded them from his new cabinet.

2. Military institution This aspect handled several military issues in Iran in the month of September like: a. Iran’s plans to provide its ships with nuclear engines b. IRGC deployment of heavy weapons on Iran’s borders with the Iraqi Kurdistan after the referendum of independence in this region and Iran’s fears of the reflection of this event on its security and stability. c. Analyzing the two military exercises conducted by the IRGC and Iran’s army separately.

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d. The military parade held by the IRGC in Tehran and display of several military air defense, missile, and navy equipment. e. Analysis of the latest military industries announced by Iran.

3. Security This part discusses the most notable national security issues in the areas of conflict inside Iran- especially security issues in the province of Kurdistan, the impact of the Iraqi Kurdistan referendum on the Iranian Kurds, and the rejection of the Iranian Kurds of the killing operations launched by the Iranian border guards against the Kurdish porters. The report also discusses the security issues in Ahwaz and Sistan and Baluchistan provinces either through seizure of personal arms in Ahwaz or the arrest campaigns launched in Sistan and Baluchistan, the conditions in the Iranian prisons that witnessed riots and the international condemnation to the Iranian authorities’ abuse against prisoners, and the increasing cyber-attacks by the Iranian cyber-units against the Saudi institutions.

4. Economics.

This part discusses the most notable issues in the energy, foreign trade and investment, banking, and services sectors, in addition to the living conditions in the Iranian interior over the month of September.

II. ARAB AFFAIRS This aspect handled three basic parts: 1. The latest developments in the Gulf-Iran relations concerning the Iranian support to Qatar due to the Qatari rejection of the three Gulf States- Kingdom of Saudi Arabia, the UAE, and Bahrain, in addition to Egypt’s demands of pacifying conditions and restoration of diplomatic relations between them 2. The Iranian reaction toward the referendum of the Iraqi Kurdistan that was held on 25/9/2017 and resulted in voting for independence from the Iraqi central government.

3. This part also discusses the sixth round of Astana talks that were launched on 14/9/2017 under Russian-Iranian-Turkish sponsorship to establish the spheres of influence in Syria.

III. INTERNATIONAL AFFAIRS This aspect is divided into two parts: 1. The US-Iran relations.

This part handles the indirect confrontation between the US president Donald Trump and the Iranian president Hassan Rouhani. This confrontation reflected

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the nature of relations between the two countries and shed light on the most notable issues and interactions between the two countries like the nuclear deal, the Iranian regional role, and Iran’s ballistic missiles.

2. Russia-Iran relations.

This part discusses the Russian role in Astana 6 talks in the balance between the requirements of continuity of its alliance with Iran, the US pressures, and the Turkish and Israeli goals of interference in Syria. In addition, it handles the impact of the Russian decision to achieve regional and international reconciliation in Syria, the Russian support to Iran against the US demands to renegotiate the terms of the nuclear deal and Zarif’s expected visit to Russia to gain its support in this concern.

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Conclusion I. INTERNAL AFFAIRS 1. The criticism directed to Rouhani on the severe economic conditions was not confined to fundamentalists; other Reformer parties of Rouhani’s supporters also criticized the harsh economic conditions in the country.

2. The demands to improve the economic conditions by making them Rouhani’s top priority during the upcoming stage might face internal and external challenges.

3. Reformers might not select their candidate for future presidential elections from outside the Reformer current as they did before with the current president Hassan Rouhani.

4. The Iranian regime started to invoke the claim that the Green Movement leaders were planning to stage a popular revolt against the regime to justify house arrest on Mir Hussein Mousavi and Mahdi Karroubi.

5. The conservative current will use the Sunni threats to Reformers to win Sunnis votes in any upcoming elections. On the other hand, Reformers might prevent this crisis in order to not lose the votes of Sunnis who are a very difficult number in the elections.

6. The Iraqi Kurdistan announcement of independence from the Iraqi central government motivated the Iranian Kurds to protest and declare their contentment on the establishment of a Kurdish independent state.

7. The Iranian Kurds dealt with the Iranian border guards, targeting of the Kurdish porters more firmly and strongly than before and succeeded in removing Municipal of the city of Banah and bringing the Iranian soldiers to court.

In fact, these developments resulted from the impact of the Iraqi Kurdistan referendum.

8. Evidence was found on Iran’s cyber-attacks against Saudi institutions 9. The Iranian military exercises in the month of September aimed at warning the Iranian Kurds to not be influenced by developments in the Iraqi Kurdistan.

10. Despite the Iranian threats to the Iranian Kurdistan of carrying out a military operation against this province and sending heavy weapons to the Iraqi-Iranian borders, the Iraqi Kurds gave no attention to these threats and held the referendum on time.

11. The strategy of supplying the Iranian ships with nuclear fuel is still under study and is no more than a dream despite its announcement six years ago.

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Economically 1. Iran fears the negative economic consequences in case Kurds continue their demands for separation following the Iraqi Kurds. As a result, Iran imposed economic sanctions on the Iraqi Kurdistan province like transpiration of oil, air flights ban, and the possibility to impose more sanctions in the future. Separation of the Iranian Kurds means losing tremendous oil, food, water supplies, human, and trade capabilities with the neighboring countries, showing the weakness of the Iranian social structure, and the possibility to penetrate Iran’s society to destabilize it from the inside.

2. Iran announced its plans again to increase its oil production up to four million barrels per day by the end of the Iranian current year (March 2018). This step might destabilize the world oil prices again in case of not coordinating with OPEC. On the other hand, there is a rapid rapprochement between Iran and Europe on oil exportation. Iran sells 40% of its oil to Europe while the other 60% goes to Asia. In addition, Iran will attempt to increase its diplomatic relations with Europe to achieve trade interests.

3. China is still the biggest trade partner of Iran. Trade exchange grew 27% between both sides during the first seven months of this year 2017, registering 20.9 billion USD. Iran also tends to increase its trade exchange with its neighbors like Pakistan, Turkey, and Iraq, knowing that Iraq buys more than 21% of Iran’s exports, which reflects the strong relationship between both countries despite obstacles of increasing exports to Iraq recently.

4. Iran’s central bank signed financing agreements for billions of USD with Chinese and European banks to finance constructional and production projects for long repayment period to break the banking sanctions on Iran and find financing channels away from the limited governmental budget.

5. Tourism in Iran was ranked first on the world’s list of tourism competitive prices for the year 2017, which reflects the low prices of tourism in Iran. However, this did not help Iran exceed rank 93 out of 141 countries of the world’s list in traveling and tourism competition for the same year, which means that prices were not the only factor in traveling for tourism in Iran.

6. House rents jumped remarkably in Iran, which exerts more pressure on the Iranian citizen. Millions of USD are being paid to search for lower cost houses even in the absence of safety measures. Nineteen million Iranian people really live in such houses and the number is expected to increase with continuity of the rise of the housing prices. On the other hand, Khomeini Relief Commission gives aids to about 5.4 million poor Iranians out of 10-12 Iranians who live below severe poverty line. This commission does not cover half of poor people in Iran, but the number reflects the huge financial capabilities of Khomeini’s commission and its influence as a soft power inside and outside Iran.

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II. ARAB AFFAIRS 1. Exposure of falsity of Iran’s claims about approaching the GCC countries in General and Kingdom of Saudi Arabia in particular due to the Iranian duplicity in dealing with the latest developments and outstanding issues with the GCC countries. Iran has gone too far in its attempts to extend the Gulf crisis and divide the Gulf States through supporting the Qatari stance that rejects the Gulf demands to resolve the crisis and restore relations. Nevertheless, Tehran promotes a lie about Saudi rejection to resolve the crisis.

2. The Iranian officials rejected separation of the Iraqi Kurdistan from the central government, claiming it was not for the interest of Iraq and its unity. In fact, this has to do with the Kurdish question inside Iran on the one hand, and the Iranian regional expansionist project on the other- especially the targeted countries including Iraq.

3. Despite the Iranian interferences in Syria through its armed militias, military and nonmilitary elements of Zeinabyioun, Heidaryioun, and others loyal to Iran to carry out its expansionist plans, Iran has become a secondary player in the Syrian crisis under the Russian leadership despite mobilizing its militias and breaking the cease-fire in this country. Indeed, this was evident in Iran’s submission to Russia in Astana 6 talks.

III. INTERNATIONAL AFFAIRS 1. The US sanctions policy continued on Iran and the vows of canceling the nuclear deal have become the center topic of a number of the US officials- especially President Trump, Secretary of State, and Secretary of defense. The United States exerted pressure on some countries, entities, and individuals to stop cooperation with Tehran, militarily and economically. On the other hand, Iran adopted brinksmanship and took a more robust posture against the American threats and extension of sanctions. Perhaps, Iran aims at using the right time to achieve the best possible gains. It did not give up its missile ambitions, regional role, and support to armed militias in the region. However, the United States seems to be thinking about a more comprehensive policy to achieve what the policy of engagement has failed to do.

Indeed, the US-Iran relations are going through a critical curve. The United States is upset about Iran’s noncompliance with its commitments and the US president seems to be willing to comprehensively review the US stance toward Iran. Indeed, Mid-October could be the time when president Trump determines his stance on the nuclear deal and then, resumption of sanctions that have been lifted since the mid of 2015, which means to go into a new stage of tense relations between the two countries.

2. Russia supported the Turkish demands in Astana 6 talks by expanding the de-escalation areas in Idlib. It also supported Israel in its demands to de-escalate tension in Dara, while Iran was only included in a committee to send observers to these de-escalation areas.

3. Iran received the Russian assurance to gain its support in declining the US request of renegotiating the terms of the nuclear deal.

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Arabian Gulf Centre for Iranian Studies

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