Beyond Rhetoric of a Looming U.S.-Iran War, Growing Political Tension is Already Changing the Middle East

Published May 21st, 2019 - 12:08 GMT
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An Iranian woman walks by anti-American graffiti (AFP/FILE)

As U.S.-Iran tensions rapidly escalate, speculations abound as to whether both countries are now firmly on the march to war.

U.S. President Donald Trump’s Twitter feed features several threats to Iran, including one issued on May 19, “If Iran wants to fight, that will be the official end of Iran. Never threaten the United States again!” His threat came shortly after reports surfaced that a missile was fired into the Green Zone of Baghdad, where the U.S. and many other nations keep their embassies. As of yet, it is unclear who fired the missile.

The missile attack itself occurred about a week after four oil tankers were reportedly attacked and damaged in the Strait of Hormuz, which sits in between Saudi Arabia and Iran. Though an anonymous U.S. official said the country has evidence Iran was behind the attack, no public assessment has found Iran responsible.


The political climate surrounding these attacks have been compared to 2002 and early 2003, on the eve of the U.S. invading Iraq. To many, the anonymous intelligence reports, the inflated threats, and the insistence by some U.S. politicians that a war could be won easily, are all tell-tale signs that the U.S. war-machine is gearing up.

Armchair speculations of war and cataclysmic engagements aside, the recent tensions are already having impacts on four key issues: Iran’s economy and the Islamic Revolutionary Guard Corps  (IRGC)’s dominance over it, the nuclear deal and the political balance of both Iraq and Syria.

Armchair speculations of war and cataclysmic engagements aside, the recent tensions are already having impacts on four key issues: Iran’s economy and the Islamic Revolutionary Guard Corps  (IRGC)’s dominance over it, the nuclear deal and the political balance of both Iraq and Syria.

While the rhetoric battles between Washington and Tehran are destined to continue ad nauseum, the real indicators of country’s fraying relations can be found in Iran’s uranium enrichment percentages, the size and reach of the IRGC, at the al-Tanf base in Syria and around the Green Zone in Baghdad.

Iran’s Shrinking Economy and the IRGC’s Growing Role

Tehran Market (AFP/FILE)

The U.S.’ reimposition of sanctions on Iran, combined with the ending of waivers for several major European companies seeking to do business in the country, has had devastating effects. Major banking institutions like the International Monetary Fund (IMF) and the World Bank forecast Iran’s GDP to shrink anywhere from 3.8-6 percent in 2019.

Inflation rates are also estimated to remain around 48-50 percent, making it more difficult for Iranian to purchase staple goods and services. In this context, private, small businesses face indefinite periods of revenues losses and an inability to import many products.

Even critical goods like food and medicine, which are exempted from the sanctions, are only trickling into Iran, as companies fear violating the terms of the sanctions while facing a labyrinth of bureaucratic hurdles to begin legally exporting to Iran.

As smaller businesses phase themselves out of Iran’s economy, the businesses left standing will likely be those with deeper pockets and better capacity to navigate the tricky terrain of the sanctions. In Iran’s case, this will likely by the IRGC.

As smaller businesses phase themselves out of Iran’s economy, the businesses left standing will likely be those with deeper pockets and better capacity to navigate the tricky terrain of the sanctions. In Iran’s case, this will likely by the IRGC.

Not only are the IRGC Iran’s clandestine special forces division, they are also operate a sprawling empire of businesses inside Iran. By some counts, IRGC businesses make up 40 percent of Iran’s economy.

Tyler Cullis and Amir Handjani concisely laid out the impact the sanctions could have on the IRGC in an article for Lawfare. “While the Iranian economy is dominated by quasi-governmental entities, sanctions ironically tend to wipe out private traders unable to withstand the tsunami of uncertainty and cost."

“Governmental entities have better access to foreign exchange and financial resources and are moved to the ‘front of the line’ by the bureaucracy. Paradoxically, the sanctions regime strengthens those very same forces that the United States has long sought to undermine—such as the IRGC—because it allows only a few dominant players with funds and access to conduct such transactions.”

Paradoxically, the sanctions regime strengthens those very same forces that the United States has long sought to undermine

Incremental Withdrawals from the Nuclear Deal

Iran President Hassan Rouhani (AFP/FILE)

Trump’s withdrawal from the 2015 nuclear deal that curtailed Iran’s nuclear development set the tone for current U.S.-Iran tensions.

Although Iran and the deal’s European signatories remain in the deal and have reiterated their support for it, Iran is beginning systematic measures to violate certain terms articulated in it.

In late April, Trump announced an end waivers that allowed countries to buy oil from Iran. As a result, Iranian oil exports slid to 500,000 barrels per day (bpd), compared to 1.25 million bpd in early 2019. A few weeks later, on May 8, Iran announced it was going to stop abiding by part of the deal that limited its stocks of enriched uranium and heavy water. "The Islamic Republic of Iran declares that at the current stage, it does not any more see itself committed to respecting the limitations on keeping enriched uranium and heavy water reserves," a press release of the decision said. 

“Yet,” the statement continued, “Iran continued compliance with deal, stressing that the remaining signatories to the agreement had to work to offset the negative impacts of the U.S. pullout for Iran if they want Tehran to remain in compliance.”

Iranian officials also warned that Iran would begin enriched uranium to 20 percent: an amount they struggled to get before the nuclear deal was signed. Iran is currently capped at 3.67 percent enrichment. Iran also announced it would stockpile more than the 300 kilograms it is currently allowed it keep. 

In a statement decrying the decision, Kelsey Davenport and Daryl G. Kimball of the Arms Control Association said, “increasing enrichment levels, in particular, would pose a far greater proliferation risk than breaching the 300-kilogram cap, as it would more quickly reduce Iran’s so-called breakout time, or the time it would take to produce enough fissile material for a nuclear weapon.”

In a statement decrying the decision, Kelsey Davenport and Daryl G. Kimball of the Arms Control Association said, “increasing enrichment levels, in particular, would pose a far greater proliferation risk than breaching the 300-kilogram cap, as it would more quickly reduce Iran’s so-called breakout time, or the time it would take to produce enough fissile material for a nuclear weapon.”

The resounding message behind Iran’s calculated, partial pullout is clear: if the U.S. continues to ramp up its pressure on Iran, Iran will respond by incrementally violating terms of the nuclear deal until it is defunct. A potential further move could be limiting the ability of the International Atomic Energy Agency (IAEC), an international nuclear watchdog, to inspect Iranian nuclear sites.

Although making predictions about the direction of politics in the Middle East and South Asia is often futile, there are obvious regional implications if Iran began enriching uranium at higher levels. Most immediately, it could spark Saudi to accelerate their own nuclear development program. Saudi’s de facto ruler, Mohammed bin Salman, has made no secret of his desire to acquire nuclear weapons if he suspects Iran to be doing the same.

 

Tensions in Syria and Iraq

Unverified satellite image of al-Tanf base in Syria (Twitter)

In Syria, the U.S. maintains one particular military base, called al-Tanf. Originally garrisoned in the fight against ISIS, the base blocks a strategic highway route between Baghdad and Damascus. If the U.S. base were gone, Iran would be able to better-streamline ground shipments of troops and goods from Iran or Iraq to Syria and Lebanon.

As U.S. and Iranian frictions grow more extreme, the U.S. base’s presence is likely to come under pressure. Although Iran-aligned forces have, for years, tested the boundaries of the base with drones and military vehicles, political pressure is mounting for the base to be abandoned. Russia, Syria and Jordan have all called for the U.S. to leave the base, which also houses an over-crowded Syrian refugee camp inside its perimeter.

In Feb 2019, Russia opened a “humanitarian corridor” to the camp, tempting thousands of refugees to leave and re-settle back into Syrian regime-controlled territory. At the same time, Syria and Russia have attempted to enforce a blockade on the camp, straining humanitarian conditions inside to the point of catastrophe.

In Syria, the U.S. maintains one particular military base, called al-Tanf. Originally garrisoned in the fight against ISIS, the base blocks a strategic highway route between Baghdad and Damascus. If the U.S. base were gone, Iran would be able to better-streamline ground shipments of troops and goods from Iran or Iraq to Syria and Lebanon.

This ‘stick and carrot’ strategy undermines a key justification the U.S. has to maintain its military presence at al-Tanf if enough refugees leave. Without the refugee camp or a substantial ISIS presence, the U.S. could only rely on its strategic purpose to block growing Iranian presence. Naturally, it would become a focal point in the U.S.-Iran conflict. 

In Iraq, the missile that struck inside the Green Zone of Baghdad could foreshadow more localized disputes between Iran and the U.S. 

Iraqi police security forces stand guard in the Baghdad Green Zone (AFP/FILE)

On May 8, a few days before the missile attack, U.S. Secretary of State Mike Pompeo told Iraqi officials that the U.S. was receiving intelligence that Iran could threaten “American interests in the Middle East,” but did not give any further details. Non-essential U.S. staff from the State Department were then ordered to leave the country. When it did hit, an Iraqi counterterrorism officials said Iran-backed militias fired it, though Iran-balled militias rushed to condemn the strike, denying any responsibility for the attack.

The U.S. and Iran, for years, have battled over political supremacy of Iraqi politics. Each support their own local political parties in Iraq’s parliament, and Iran supports a vast array of shiite militias that were created with help from the IRGC and have now been formally integrated into Iraq’s military, much to the chagrin of the U.S. These local disputes may flare up in the face of a concerted effort to antagonize one another. 

Local competitions between the U.S. and Iran may escalate as biting oil sanctions take a toll on Iran’s economy.

Iranian business, especially IRGC-backed ones, may focus more aggressively on construction and infrastructure projects for Iraq and Syria. In an immediate sense, this would provide Iran some marginal relief from the sanctions. But in the long-term, it would widen Iran’s sphere of influence inside both countries. 

Iranian business, especially IRGC-backed ones, may focus more aggressively on construction and infrastructure projects for Iraq and Syria. In an immediate sense, this would provide Iran some marginal relief from the sanctions. But in the long-term, it would widen Iran’s sphere of influence inside both countries. 

This appears to already be happening. In March 2019, Iran’s president Hassan Rouhani made a visit to Iraq, where he signed a new trade deal that featured joint projects on railway construction, electricity infrastructure, and engineering services. Rouhani also expressed a desire to increase bilateral trade with Iraq from the current USD 12 billion to USD 20 billion. 

Tehran’s foreign minister has also advocated for the role Iranian construction firms should have in rebuilding Iraq in the wake of the war against ISIS. Meanwhile in Syria, Damascus has reportedly awarded massive contracts. In one publicized case, an Iranian construction firm won a contract to rebuild 200,000 housing units in Feb 2019.

These four areas of interest do not represent all the places changes thanks to the growing tensions. But in all these cases, the current trajectory between the U.S. and Iran appears to be inflated threats and increasingly aggressive moves to out-flank one another.
 


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