Iran Case-File Report of May 2018


This report, issued by International Institute for Iranian Studies, tracks the most important developments in Iran during May 2018. It presents a detailed description on three key aspects of the Iran case-file: Internal, Arab, and international affairs.

♦ Internal Affairs
1. The ideological issue: in this part the report addressed some clerics’ fears about the growing hostility against them because of the harsh socio-economic conditions, given that Iran has been under the control of clerics since the Khomeini revolution. This public position was clarified by the statement of Javadi Amoli one of the greatest traditional jurists in Iran during a meeting with the Minister of Labor, Ali Rabee’ when he said “If people rise up, they will throw us all into the sea.” This was about the economic problems and the decline in popularity of the clerics in Iran; both masters and disciples.
2. Politics: the report handled the reasons for the continued absenteeism of President Rouhani from the Expediency Council meetings, reflecting disagreement and a struggle for power between key figures of the Iranian regime. The Iranian Supreme Leader Khamenei tends to decrease the role of the presidency in favor of institutions that he appoints. The report also discussed the functions of the Expediency Council, the four proposed reasons for Rouhani’s undeclared boycott of its meetings, the developments that took place in this Council after death of its former chairman the late Hashemi Rafsanjani, and its future under the leadership of its former Chief of Judiciary, Hashemi Shahroudi, while taking into consideration the differences between the two men in terms of experiences, political tendencies, and positions within the Iranian regime. In addition, the appointment of Shahroudi- Iraqi by birth and upbringing- as Chairman of the Expediency Council raised many questions on the limits of nationalism in Iran, knowing that he is a strong candidate for succeeding the Supreme Leader, Ali Khamenei.
3. Military: the report discussed Iran’s international military cooperation in light of the resumption of US sanctions on Tehran, the UN resolutions that prohibit Iran from carrying out international military cooperation before the signing of the nuclear agreement, the possibility of sanctions after the collapse of the international pact, Iran’s current efforts in building strong military relations before the resumption of sanctions, and Iran’s military cooperation with Oman, Afghanistan, and Bolivia.
4. Security: the report addressed the protests in Kazeroun in Fars Province Southern Iran resulting from the government’s plans to carve up two areas of Kazeroun to establish a new county. The report also handled the influence of Friday Imams in the Iranian provinces and their ability to motivate the public. On the other hand, there was ambiguity about the motive of the Kazeroun’s protests by raising the question “Does changing administrative divisions within a country lead to protests, or is it the harsh conditions that drive the Iranian people to rise for any reason, or is there an internal struggle between parties for power with people being used as an instrument of pressure?” The report also discussed the plan of dividing Kazeroun, including motives of protesters as well as supporters of the plan and the position of Kazeroun’s representative in the Iranian Parliament, Hussein Rezazadeh towards the charges against him of supporting the plan of dividing Kazeroun.
5. Economics: the report handled the European companies’ departure from Iran after the US withdrawal from the nuclear deal in May 2018. It also assessed Iranian plans to attract $20 billion as foreign direct investment until 2021 to revive the economy, knowing that some of these investments have cautiously returned to the Iranian market for fear of the US resuming sanctions on Tehran. In fact, foreign investments in Iran did not exceed 7.4 billion USDs during the period January 2016- September 2017. Foreign companies left Iran after signing multi-billion USD contracts such as Peugeot, Boeing, banks, shipping, automobile, and insurance companies. This left the Iranian economy vulnerable to a strong shock expected to negatively impact economic growth rates by the end of the Iranian current year in March 2019.
The situation will be even worse for Iran in case of a decline of its oil exports – at an average rate of at least 300,000 barrels per day – and the consequent slowdown of the growth of the oil and non-oil sectors, resulting in high unemployment, foreign exchange shortages, and price increases that would burden the Iranian citizen. On the other hand, the rise of oil world prices may have a counterbalance impact on Iranian revenues, but they will remain limited if the US pressure on its allies- the European countries, Japan, and South Korea- succeeds.

♦ Arab Affairs
This section was divided into four parts:
1. Future of the Iranian role in light of the latest developments in the Syrian crisis: the Syrian crisis has entered a new phase represented by the involvement of regional and international players which negatively impact the Iranian role in this country.
This report analyzed the Israeli military strikes on Iranian positions and targets in Syria and their impact on Iranian expansion, especially on the corridor linking Iran with the Mediterranean Sea. The report also addressed the future of the political process to resolve the Syrian crisis by analyzing Astana’s resolutions and the reasons behind their failure in light of the intense international involvement in the Syrian crisis. Finally, this part of the report discussed Russia-Iran disagreement because of Israel-Russia agreement on the removal of Iran from the South of Syria and its impact on Iranian presence in this country and its other roles in Yemen, Iraq, Lebanon, and other countries to determine the future and size of Iranian involvement in Syria.
2.Future of the Iranian militia incursion in Iraq in the light of the results of the Iraqi parliamentary elections: the Sadrist-backed coalition, Sa’iroun, won the highest votes in the Iraqi parliamentary elections in May 2018, which delivered a serious blow to Iran in Iraq due to the different priorities of Al-Sadr from those of Iran and victory to the states seeking Iraq’s return to its Arab environment.
This report reviewed the number of electoral coalitions which participated in the Iraqi parliamentary elections and their electoral programs and tendencies. In addition, it highlighted the internal and external issues facing the new Iraqi government and the reasons behind the Sa’iroun coalition’s victory and superiority over other coalitions, especially Sunni coalitions. The report also discussed the expected form of government in the light of these results and the expected Iranian reaction in case Iraq breaks up with Iran and develops strong relations with its Arab neighbors, mainly, the Kingdom of Saudi Arabia.
3. Future of the Iranian-backed Lebanese Hezbollah in the light of the victory of the two Shiite parties, Hezbollah and the Amal movement, in the Lebanese legislative elections held in May 2018: Hezbollah and the Amal Movement won more than half of the seats in the Lebanese parliament- 128 seats.
This report handled the impact of these results on Lebanese internal and foreign affairs in light of Hezbollah’s weapon issue and its foreign activities, especially in Syria, and their impact on the Hariri government and its activities, internally and externally. The report also handled the new US sanctions and their impact on the role of Hezbollah in the next period, knowing that these sanctions will be comprehensive and will include both political and military factions of the party. This means that Hezbollah’s ministers and MPs will not gain legitimacy and confidence within the new Lebanese formula, which will impact Iran and limit its activities and influence.
4.Finally, the report discussed Iranian activities in the Maghreb states after Morocco’s announcement to cut diplomatic relations with Tehran by addressing Iran’s relations with these countries, monitoring Algeria’s reaction to the Moroccan accusations of its complicity with Iran, and handling the role of the Iranian cultural attaché in Algeria and his activities in infuriating the Algerian people who called for his expulsion from their country. The report also lists the Arab countries which maintain diplomatic ties with Iran in a table attached to the report.

♦ International Affairs
1. The report includes two axes, the first discusses Iranian-American relations that followed President Trump’s decision to withdraw from the nuclear agreement as President Trump’s decision was expected but the most important question here is what about after the withdrawal? Trump’s administration is clearly heading to punish Iran, in the first place, the restoration of the past sanctions programs that include oil exports, which will have a profound impact on Iran. The US administration will also be heading for greater sanctions. This policy will ultimately push Iran to the negotiating table in accordance with US conditions set by Trump, as demonstrated by the terms set by the US Secretary of State, Mike Pompeo for renegotiations with Iran. But the other question that arises here is what are the American alternatives for those policies if Iran does not respond to its pressures?
Iran, on the other hand, is moving on more than one track, such as a diplomatic one, to keep the agreement without the United States, or even to try to eviscerate the operative part of the resolution by continuing its economic relations with the West and the world. This is consistent with the position of the Supreme Leader Ali Khamenei to stay in the agreement, as Iran pursues another track parallel with the first one, to use threats and escalation to exert pressure on various parties. Among the available pressures, Iran is threatening to re-enrich uranium at high rates. Unlikely but still possible scenario, Iran would accept the American conditions.
2. The second axis deals with the implications of the US withdrawal from the nuclear agreement on Iran’s international relations, and it also indicates the interactions of Iran’s relationship with the signatories to the nuclear agreement (Britain, France, Germany, Russia and China) after the American withdrawal. Furthermore, it compares between the Russian and European relations with Iran after the American withdrawal, in the light of Iranian pressure exerted on Europe and its total surrender to Russia’s will. Meanwhile, China is poised to capture the share of the European investment in the Iranian market. Finally, this axis assesses the extent of the US’s ability to implement a ban on Iranian oil exports to target the Iranian economy with a painful blow.

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Editorial Team