Wednesday, June 25, 2008

An Iran Update

The EU have unilaterally imposed further sanctions on Iran, moving Ahmedinejad to announce that neither carrots nor sticks will stop Iran's enrichment of uranium. Israel recently conducted war exercises clearly aimed at Iran. The Iranian economy goes further into misery because of corruption on a grand scale, yet the theocrat's do not care. Motivated by theology and maintining a system that has made them wealthy, the theocrat's sole concern besides self-preservation is the export of the revolution by any means. Part of that export is going into Iraq, two million Iraqis have signed a petition protesting Iran's proxy acts of war in their country.

The EU on Monday approved further sanctions on Iran, and most notably its largest bank, Bank Melli. Such tepid sanctions, which have no chance of altering the theocrat's determination to acquire a nuclear arsenal, brought a predictable reaction from Iran's theocracy. This from Fox News:

Iran said Tuesday that additional sanctions by the European Union will not affect Tehran, while President Mahmoud Ahmadinejad proposed the formation of a special court to punish the world "tyrants" for their attempt to thwart Iran's nuclear program.

Ahmadinejad was quoted as saying to a group of judges that "a court should be formed to try and punish all world criminals who invade the rights of the Iranian nation," according to the state IRNA news agency.

Iran considers its nuclear ambitions — which the West claims mask weapons making — as an inalienable right. Tehran has dismissed Western claims and contends its uranium enrichment is only meant for electricity production.

. . . Also Tuesday, Iranian foreign ministry spokesman Mohammad Ali Hosseini said in a statement that the "carrot and stick policy" by the 27-nation EU bloc won't stop Iran's "pursuit to realize its nuclear rights."

. . . Referring to the new sanctions as a "narrow-mindedness decision" by the EU, the statement quoted Hosseini as saying that "it will not help create a suitable atmosphere for a diplomatic solution" to the nuclear dispute.

Meanwhile in Brussels, the EU released on Tuesday a list of those sanctioned, updating the restrictions first adopted in 2007 and including 15 new names and 20 new companies the EU says all have links to developing Iran's nuclear program.

Most notable among the newly sanctioned, the Bank Melli, allegedly provided or attempted to give financial backing to companies involved in procuring goods for Iran's nuclear and missile programs, the EU said.

Earlier in June, the EU unsuccessfully proposed a package of economic incentives in return for an end to Iran's uranium enrichment program.

Tehran officials have scorned the proposal, although Iran has also said that both sides could start talks on it since the proposal has "common" points with the Iranian one, presented by Tehran in May but which the West said fell far short of meeting international demands. . .

Read the entire article.

Israel, for its part, recently conducted a training exercise with 100 F-16 and F-15 jets took part that was clearly aimed at Iran. The problem from Israel's perspective is that, given how dispersed the pieces of Iran's nuclear weapons program are dispersed throughout the country, a raid of that size will be insufficient. This from Reuters:

"A hundred warplanes are enough for a raid, but they do not make for an air campaign - and that is what is needed to deal conclusively with Iran's capabilities," an official said. "Israel wants to go it alone against Iran as a last resort only."

Pentagon sources said more than 100 Israeli F-16 and F-15 jets took part in a long-range Mediterranean exercise this month that appeared to be practice for real sorties over Iran.

Given that this may be beyond the capacity of Israel to fully complete, Israel is reportedly pushing for the U.S. to join in any military strike. The clock is ticking. Israeli intelligence believes that Iran will create its first nuclear weapon in 2009. John Bolton is predicting such a strike after the Presidential elections in November and prior to the swearing in of the next President.

The utter refusal of Iran to give up their pursuit of nuclear weapons - and the uselessness of economic sanctions that do not bite into the theocratic class - must be seen in context. The theocracy's goal is not the improvement of life for the people of Iran, but the export of its revolution and the imposition of Khomeinist control as far beyond its borders as possible. There is also an economic imperative to this expansionism as Iran's economy is crumbling from corruption. This makes Iran's theocracy every bit as expansionist and dangerous as Hitler's Nazi machine in the 1930's.

An exeptional article from the Asia Times discusses precisely these issues:

. . . Households in President Mahmud Ahmadinejad's Iran must suffer on a Dickensian scale, for they spend 10% more than their income, according to the country's central bank. Iran's data are more hilarious than reliable, to be sure, but they illustrate how ordinary Iranians are perishing in a sea of petrodollars.

The price of oil more than doubled since . . . last year. . . . Despite the surge in oil revenues, conditions are worse than they were a year ago, as the price of necessities soars out of ordinary reach. Not only the theft of the oil windfall, but the manner of the heft, puts Adhmadinejad's political future in doubt, . . . Changing the man at the top, however, is no cure for fecklessness of Central African proportions. Underneath Iran's imperial ambitions and messianic pretensions suppurates a pre-modern patronage system that corrupts everyone who comes near it.

The system is rotten, and must either break down, or break out, that is, through military adventures. Western observers who hope for reduced tensions through replacing the feckless Ahmadinejad with Majlis (parliament) speaker Ali Larijani will be disappointed. On that more below.

Iran's economic disaster looms large in the twilight war now in progress in the Middle East. Israel has just conducted the sort of public display of force that a nation does not do if it actually plans a surprise attack. Israel engages Syria, Egypt engages Hamas, and everyone else engages Iran - but to what end? It may be Sitzkrieg (sitting or phony war), but it is war nonetheless. Wars arise not from whim, but from circumstances that the prospective belligerents cannot bear. Iran has shown in the most vivid fashion that it cannot solve its internal problems. It is therefore likely to seek an external solution.

What happened to the US$35 billion of oil revenues that Iran's Shabab News, in a now notorious account, claims disappeared from official accounting during the year through March 2008? Half the country's oil revenues disappeared from the books. A great deal of it left the country for banks in Dubai in the United Arab Emirates and elsewhere; capital flight already was running at a $15 billion annual rate last year, by my estimate.

. . . Corruption has metastasized, that is to say, for the scale of the property boom implies that tens of thousands of Iranians are taking six-to-seven figure bites out of the oil budget. Rather than a handful of officials siphoning state funds into bank accounts in Dubai, an entire class of hangers-on of the Islamic revolution is spending sums beyond the dreams of the average Iranian, and in brazen public view.

Ahmadinejad's patronage system generates payoffs to the political class that have set in motion uncontrolled inflation - officially 25% per year but certainly much higher - and a rush into real assets. A side effect is that the average Iranian urban household, which spends $316 a month, is gradually being priced out of the rental market.

Not only rents but foodstuffs, fuel and other essentials have registered double- or triple-digit price increases during recent months, according to fragmentary reports trickling out of the country. The government's 25% inflation figure cannot be correct. The German Suddeutsche Zeitung's Tehran correspondent wrote on June 17, "Price increases follow one another in batches. After the prices of rice and detergent suddenly jumped by a multiple, tea prices have their turn. In just a few days different types of tea have become 300% to 700% more expensive." It is too early to speak of hyperinflation, but the the Iranian bazaar already presents with symptoms of incipient hyperinflation. How do households survive?

"Iranian urban households spent an average of 35 million rials (US$3,700) for current annual living expenses (about 2.9 million rials per month)" in fiscal year 2005-2006, reports the country's central bank, of which just under 30% bought food. But it also reports that "urban households had an annual average gross income of 31,674 thousand rials [US$3,423], about 2,640 thousand rials per month, out of which 74.6% was the share of money income and 25.4% was the share of non-money income."

These are the most recent data available from the central bank, which does not explain how it is possible for households to spend more than they earn in a country that has no consumer credit . . . Part of the explanation seems to be that every poor Iranian has a part-time job, from selling black-market gasoline to prostitution. The latter appears to be the most lucrative source of extra household income. Some 300,000 prostitutes ply the streets of Tehran, or one out of 10 of the city's female population of child-bearing age, [1] according to the most frequently cited sources (see Jihadis and whores Asia Times Online, November 21, 2006.)

In addition, tens of thousands of Iranian women are working as prostitutes abroad, notoriously in the Gulf States, but in Europe and Japan as well. The US State Department recently downgraded Iran to a "Level III" country, that is, one that does nothing to suppress the trade in female flesh.

Prostitution incorporates such a large proportion of Iran's marriageable females as to accelerate the country's demographic decline, which by 2030 will leave Iran with as high a proportion of pensioners as Western Europe, just as its oil reserves run out. Unlike Norway, which entrusted its oil windfalls to a national trust under professional management, Iran has allowed the political class to steal its patrimony.

. . . Apart from oil, Iran exports mainly fruits and nuts. Its most talented people have emigrated, leaving behind only the leeches of the bazaar who hope to grow fat on state oil money. Its demographic problems are insoluble. It has no employment to offer its last generation of young people, half of whom have no visible employment, and no way to support a rapidly aging population. I am in no position to judge the likelihood that the Twelfth Imam of Shi'ite soteriology will reappear in the near future, but it is a fair assertion that nothing else is likely to steer the Persian pocket empire out of the ditch. Western analysts start with the premise that a solution exists for every problem, and set out to find it. I do not believe there is any way to save Iran from terminal dysfunction; it is only possible to prevent Iran's problems from turning into a disaster for the region.

It is no surprise that Iran's leaders remain obsessed with Shi'ite revolution. Larijani told the Islamic Coalition Party on June 19, "The jihadi forces of the Lebanese Hezbollah and the Palestinian Hamas are the pioneers of change in today's world," Iran's official press agency reported. Larijani added, "Interpreting the moves made within the Islamic World as terrorism under such conditions that the Islamic society enjoys the pride of having jihadi combatants is a grave mistake, since those groups are the soldiers of Almighty Allah."

. . . Adhmadinejad is a boor from the back streets of Tehran, while Larijani is the polished son and the son-in-law of two ayatollahs. No matter; German universities during the 1930s were crawling with Kant scholars who enthused for Adolf Hitler. Larijani's enthusiasm for the blood of martyrs as the determinant of national destiny is not a philosophical, but an existential view, and Iran is one of the few venues in the world in which existential despair is sadly justified.

Read the entire article. Part of Iran's attempt to export its revolution is aimed directly into Iraq. The Jerusalem Post is reporting that Iraqi condemnation of Iran is growing in response to their their proxy acts of war in Iraq:

The signatures of more than two million Iraqi Shi'ites, demanding that Iran cease its interference in Iraq, were presented on Saturday during a convention in Ashraf, northeast of Baghdad, the London-based daily A-Sharq Al-Awsat reported.

Representatives of more than 135 parties and organizations, as well as 1,000 tribal elders from Iraq's southern and central regions, attended the conference, titled "Solidarity with the Iraqi People." Also attending the event were representatives from the Iranian opposition group, Mujahidin Khalq.

"We have gathered over two million signatures from Iraqi Shi'ites, calling on Iran to pull its hands off Iraq and especially the southern districts," said the leader of the Al-Humeidat tribe, Sheikh Ka'sid Najm during the conference.

In an interview with A-Sharq Al-Awsat, Najm explained that Iranian interference in the southern regions had become obvious. He warned that if it did not stop, then Iraq would turn into "an Iranian protectorate."

. . . Meanwhile, Iraq and Iran recently signed a security memorandum of understanding, which focused on clearing mine fields, recovering the remains of soldiers killed in the eight-year war and setting border lines between the two nations.

The document was agreed upon during last week's visit of Iraqi Prime Minister Nouri Al-Maliki to Teheran.

Read the entire article. As the DOD Quarterly Report memorializes below, given Iran's refusal to acknowledge their blatant acts of war inside Iraq and instead blame the coallition, it likewise appears that Iran has no intention of giving up its goal of Lebanizing Iraq.

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