Khamenei has named his strategy to neutralize US pressures as \u201cresistance.\u201d He advocates \u201cno war, no negotiation.\u201d He does not explain how this resistance is to be pursued. It appears that the government has opted for three strategies to guarantee the survival of the Islamist political system: 1) To ally with Russia and China, 2) To set the region on fire, and 3) To tap into Iran\u2019s national reserves to cover its deficit and to fund its proxies. None of these strategies are proven to be a survival kit.<\/p>\n
A Shift to the East<\/strong><\/p>\n One of the most popular slogans during the 1979 revolution was \u201cNeither East nor West,\u201d meaning Iran should no longer favor either of the world\u2019s superpowers whether the United States or the Soviet Union. Khamenei has openly and clearly signaled a decisive shift in favor of relations with China and Russia. He declared on February 19, 2018, that: \u201cIn foreign policy, the top priorities for us today include preferring East to West.\u201d He is aware that western countries and western companies cannot be his government\u2019s partners in the long term. Setting the Region on Fire<\/strong><\/p>\n The declared security policy of the Islamic Republic to counter US sanctions is based on Rouhani\u2019s statement<\/a><\/u>: \u201cIf one day they want to prevent the export of Iran\u2019s oil, then no oil will be exported from the Persian Gulf.\u201d Several IRGC commanders have made similar comments. Spending Iran\u2019s National Reserves<\/strong><\/p>\n A country\u2019s national reserves are usually comprised of personal savings and national funds. The Iranian government is tapping into its national reserves to cover its liabilities\u00a0 and to fund\u00a0 its proxies in the region. \u201cNo War, No Negotiation\u201d but Microaggressions <\/strong><\/p>\n From Khamenei and his advisers\u2019 point of view, these three strategies are complementary: the first one will allow Iran to deal with the impact of US sanctions particularly on its oil sector\u00a0 and will provide enough cash for the government\u2019s ambitious objectives\u00a0 in the region; the second one will inflict some pain on the United States and its allies in the region; and the third one will reduce\u00a0 domestic tensions for the time being. Considering these factors, Khamenei will continue his \u201cno war, no negotiation\u201d policy while cautiously increasing tensions through microaggressions.<\/p>\n","protected":false},"excerpt":{"rendered":" Khamenei has named his strategy to neutralize US pressures as \u201cresistance.\u201d He advocates \u201cno war, no negotiation.\u201d He does not explain how this resistance is to be pursued. It appears that the government has opted for three strategies to guarantee the survival of the Islamist political system: 1) To ally with Russia and China, 2) […]<\/p>\n","protected":false},"author":9,"featured_media":6950,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[3308,386,3307,3309,237],"class_list":["post-6949","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-reports","tag-campaign","tag-khamenei","tag-khameneis-strategies","tag-khameneis-strategies-to-navigate-through-the-us-maximum-pressure-campaign","tag-us"],"_links":{"self":[{"href":"https:\/\/rasanah-iiis.org\/english\/wp-json\/wp\/v2\/posts\/6949","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/rasanah-iiis.org\/english\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/rasanah-iiis.org\/english\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/rasanah-iiis.org\/english\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/rasanah-iiis.org\/english\/wp-json\/wp\/v2\/comments?post=6949"}],"version-history":[{"count":1,"href":"https:\/\/rasanah-iiis.org\/english\/wp-json\/wp\/v2\/posts\/6949\/revisions"}],"predecessor-version":[{"id":6951,"href":"https:\/\/rasanah-iiis.org\/english\/wp-json\/wp\/v2\/posts\/6949\/revisions\/6951"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/rasanah-iiis.org\/english\/wp-json\/wp\/v2\/media\/6950"}],"wp:attachment":[{"href":"https:\/\/rasanah-iiis.org\/english\/wp-json\/wp\/v2\/media?parent=6949"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/rasanah-iiis.org\/english\/wp-json\/wp\/v2\/categories?post=6949"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/rasanah-iiis.org\/english\/wp-json\/wp\/v2\/tags?post=6949"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nBased on this strategy, in August 2019, China and Iran updated<\/a><\/u> a 2016 strategic partnership agreement. The central pillar of the new deal is that China will invest $280 billion to develop Iran’s oil, gas and petrochemical sectors in the next 25 years. This amount may be unevenly distributed, with most of it available during the first five-year period. However, the understanding is that the rest of the investment will be available after every subsequent five-year period, subject to both parties’ agreement. There will be another $120 billion investment to upgrade Iran’s transport and manufacturing infrastructure. This seems to be the government\u2019s long-term solution to acquire sufficient revenues and to invest in improving Iran\u2019s poor infrastructure.
\nIt seems that Khamenei is not worried about the domestic repercussions of this deal. It is likely to undermine Iran\u2019s sovereignty. This deal will include up to 5,000 Chinese security personnel on the ground in Iran to protect Chinese projects, and there will be additional personnel available to protect the eventual transit of oil, gas, and petrochemicals from Iran to China. Iranian sources have confirmed<\/a><\/u> this deal.
\nThe terms of the agreement are disadvantageous for Iran. China will be granted the right to delay payment for Iranian products for up to two years. China will also be able to pay in soft currencies that it has accrued from doing business in Africa and the Former Soviet Union (FSU) states, in addition to using renminbi, should the need arise \u2013 meaning that no US dollars will be involved in these commodity transaction payments from China to Iran. Therefore, this would be a sanction proof deal for both sides.
\nRegarding Russia, the Iranian government compromised<\/a><\/u> “Iran’s rights” in the new Caspian Sea deal\u00a0 pushed by Putin. Iran’s share of the Caspian Sea has been reduced from 50 percent to as little as 11 to 13 percent.<\/p>\n
\nThere has been a direct relationship between the speed of reduction in Iran\u2019s oil exports\u00a0 and the frequency\u00a0 of its military attacks. When Iran\u2019s oil exports decreased<\/a><\/u> to around or less than 500,000 barrels per day, the Iranian government began to carry out its threats through attacking oil tankers: the May 12 Fujairah attacks; the May 14 attack on Saudi Arabia\u2019s East-West Pipeline; the June 14 daylight attack on two tankers in the Strait of Hormuz; and the June 20 shootdown\u00a0 of a US drone.
\nThe next round of attacks came when Iran\u2019s oil exports were reduced<\/a><\/u> to below 200,000\u00a0 barrels per day. These attacks targeted Saudi Aramco plants in Abqaiq and Khurais\u00a0which knocked out more than half of Saudi Arabia’s oil-exporting capability, rocked international financial markets and spiked crude oil prices.<\/p>\n
\nThe most recent withdrawal<\/a><\/u> of $300 million from the National Development Fund (NDF) was for the Chabahar-Zahedan railroad construction project. Before that, 5,000 billion tomans ($1.2 billion in the official exchange rate) were \u00a0withdrawn<\/a> from the NDF to\u00a0 reconstruct areas devastated by flooding in the Golestan province. These are not exceptions. In just a year, tens of billions of dollars have been withdrawn from the NDF to pay for projects related to defense ($1.5 billion in February 2019), development ($2.3 billion in April 2019), employment creation ($1 billion in May 2019), and reconstruction ($2 billion in April 2019). Some withdrawals to fund terrorist groups are kept secret. It is not clear how much is left in the NDF. It seems that Khamenei will pursue his \u201cresistance\u201d policy until every last penny of the NDF is spent.
\nOther than national reserves, the government has been issuing bonds to take care of its budget deficit. The latest government bonds that were approved on September 17, 2019 were worth 38 trillion tomans ($3.5 billion) to compensate for decreasing oil revenues.<\/p>\n