Tag Archives: Iran

Update: No “Geneva bump” for Iran after EU insurance ban lifted

A few weeks ago I blogged about what the six-month suspension of the EU insurance ban could mean for Iran’s oil exports. My reading of events was optimistic for Tehran. India looked like the country best positioned to increase oil imports because it was never able to develop an alternative arrangement. Imports fell dramatically as a result. Other, more marginal barrels could be headed for Turkey, officials also said. “For Iran, every barrel is significant,” I argued on January 17. But it’s looking more and more like the “Geneva bump” will not materialize.

EU-based insurers issued a series of warnings last month, calling for caution. Gard AS of Norway–the largest protection and indemnity (P&I) insurer–had this to say: “Members and clubs should proceed on the basis that beyond 20 July 2014, clubs will not be able to respond to any claims presented in respect of liabilities arising during the 20 January/20 July suspension period… This has the effect of rendering the current suspension of sanctions on insurance cover, and in particular P&I cover, of very limited, if any, value to shipowners.”

Testifying today at a Senate Foreign Relations Committee hearing, Treasury Undersecretary David S. Cohen confirmed that all insurance claims, “from contract to delivery to payment,” must be settled by July 20. P&I claims regularly take a year or more to collect, process and pay out. This is understandable given that huge amounts of money involved. However, for Iran, it means selling more oil won’t be easy. Without EU insurance, tanker owners will be left on the hook to pay for any accident, damage or disaster. We will still see month-to-month variations in Iran’s oil exports but a sustained boost is hard to imagine without EU insurance.

In my January 17 post, I also suggested China might decide to import more oil from Iran it sees P5+1 talks going in the right direction. Chinese imports climbed in the last two months of 2013 but it’s too soon to tell whether or not Beijing is really rolling the dice–and daring the U.S. Treasury to act if talks with Iran fail.

Negotiations for a comprehensive, final nuclear deal will begin on February 18.

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Post-Geneva Oil Prospects for Iran

In keeping with the Geneva deal, the EU ban on insurance (and reinsurance) of Iranian crude oil will be lifted for six months beginning on January 20. As a result, some customers may import more Iranian oil. China could also surprise the U.S. and buy more Iranian crude if talks between Iran and the P5+1 go well. How much more is anyone’s guess but Iran will view any improvement as significant.

The EU ban helped slash Iran’s oil exports from about 2.3 million b/d to an average of 1.1 million b/d over the last 18 months. It exacted the most pain in the summer of 2012, when it first went into effect. Many of Iran’s customers were caught unprepared and had to scramble for alternatives. Iranian oil exports collapsed in July of that year, falling to a shocking low of about 850,000 b/d.

So what does the suspension of the EU ban mean for Iran’s customers?  That depends. Japan is currently the only country providing a “sovereign guarantee” in case of disaster. Tokyo is on the hook for up to $7.6 billion in the event an Iranian tanker is damaged or blamed for an environmental disaster. It will be happy to see EU insurers step in soon. Import volumes will not be affected, according to recent reports.

India stands to be the biggest winner because it never found an alternative to the EU. Some refiners could not accept Iranian-based insurance and a sovereign guarantee never materialized. As recently as December, Indian imports from Iran were in doubt.

Indian imports from Iran fell 40 percent in the first nine months of last year after EU firms refused to insure facilities processing Iranian oil—not just tankers carrying it. Deadly fires at two different facilities, one in May and another in August, forced Hindustan Petroleum to play it safe and cut off Iran. MRPL didn’t accept Iranian insurance until late summer. Essar Oil Ltd., another major Indian refiner, accepted Iranian insurance earlier but Iran still lost about 150,000 b/d in sales last year compared to 2012.

India’s steep drop-off of crude imports from Iran may be used as an excuse to ratchet up imports this year. Though India received a new sanctions waiver from the U.S. in November, the argument can and will be made that reductions were so severe in 2013 that the U.S. should be more understanding in 2014. Total imports may be lower than previous periods but the suspension of the EU ban will allow Indian refiners to achieve more “normal” volumes, at least for six months while the Geneva deal is observed.

Chinese officials were tight-lipped throughout 2012 but supposedly accepted Iranian insurance. This was a gamble given that Iranian-based insurers like Kish P&I were unproven. The risk was easier for Beijing to shoulder because it could presumably pay for any disaster if Iran failed to do so, thus creating a backstop sovereign guarantee for oil imports. For China—Iran’s number one customer—replacing all or most Iranian oil was not an option. Imports averaged about 420,000 b/d in 2012-2013. Volumes so large are not easily replaced.

Like China, South Korea accepted Iranian insurance in October 2012. Turkey, which has averaged about 105,000 b/d going back more than a year, never officially acknowledged how it is insuring Iranian imports. Japan took a different route with its sovereign guarantee of $7.6 billion. Those that took Iranian insurance accepted much smaller offers of $1 billion per tanker, per disaster. Iran’s national tanker fleet has a good record of safe carriage, however, allowing some to settle for less without fearing the worst.

The EIA says Iran’s oil exports are “not expected to increase significantly.” That’s fair. But how would Iran define “significantly”? Turkish Energy Minister Taner Yildiz said his country might take 35,000 b/d more now that EU insurance is an option; Indian officials say refiners could import an extra 50,000 b/d through March, maybe more if Iran is ready to agree to better terms. Privately-owned companies could still push the envelope.

While Japan and South Korea have slashed imports hard and fast, China could play chicken with the U.S. Treasury if Beijing believes P5+1 talks with Iran will succeed. China received a new waiver in November although imports from Iran were stable compared to the previous 180-day review period. Knowing there is a one-month delay between imports and the release of customs data, China cut imports from Iran to just 250,000 b/d in October. The sharp decline was reported just before the U.S. extended waivers in late November. The following month, China revealed November imports from Iran had jumped to 538,000 b/d.

The White House has played nice with China so far. Will China return the favor or go after cheap Iranian barrels? The possibility can’t be dismissed. Zhuhai Zhenrong, a Chinese state-owned trader, was sanctioned in 2012 for its relationship with Iran. But it remains less vulnerable because it has little or no exposure to the U.S. financial system. Last month, a former trader from the company asked Reuters, “More pressure? Do you think they [Zhuhai Zhenrong] really care?”

Combined, China’s Unipec and Zhuhai Zhenrong are contracted to purchase 505,000 b/d from Iran this year—about 85,000 b/d more than the imported average over the past two years. What they actually lift is up to their discretion but it could be influenced by ongoing talks.

The Geneva deal holds that Iran’s customers will be allowed to import “current average amounts” of 1 million b/d total. But that depends on enforcement. Some, like Turkey and India, may try to recover lost crude and satisfy existing contracts. China could use the Geneva deal and its seat at the P5+1 talks to as a guide for imports as well. It might even bet on a breakthrough and buy more oil.

Iran, for its part, should be expected to pursue any and all angles to increase exports, even if that means serious discounts or extended credit terms to begin retaking its market share.

For Iran, every barrel is significant.

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What are the Saudis Thinking?

Two stories made a big splash today, suggesting US-Saudi ties are fraying and that Riyadh is hugely disappointed by U.S. policies. Saudi intelligence chief Prince Bandar bin Sultan is at the center of both the Wall Street Journal and Reuters articles. European diplomats reportedly met with Prince Bandar (pictured) over the weekend. He made it perfectly clear to them that Riyadh was ready to scale back cooperation with the U.S. on Syria and arm rebel factions now fighting the Assad regime. Sources told Reuters that Saudi Arabia would reconsider arms deals with the U.S. and oil sales just days after the Kingdom rejected a two-year non-permanent seat on the UN Security Council.

Three recent developments have inspired Saudi Arabia to beat its own path of late. With this post, I’m trying to capture the logic driving Riyadh. This post is deliberately sympathetic because the media has largely failed to express their views. Saudi leaders haven’t articulated them carefully, either.

Start with Syria. For two years the U.S. has hinted at arming rebels but held back. These hints hardened into explicit promises in June, when the Obama administration first accused the Assad regime of using chemical weapons and crossing the president’s “red line.” In response, the White House pledged to arm rebels. Even then, the goal was not to oust Assad, but to create a stalemate that would force both sides to negotiate.

Countless stories since then have made it clear that rebels are not receiving enough arms or aid from the U.S. and that allies have withheld aid so as to not anger Washington. As reported by Greg Miller on October 5, an ongoing CIA training program “is so minuscule that it is expected to produce only a few hundred trained fighters each month even after it is enlarged, a level that officials said will do little to bolster rebel forces [.]”

The August 21 chemical attack on a Damascus neighborhood changed everything—it seemed. With 1,400 dead, evidence mounting, and outrage rising, the Obama administration prepared to strike Syria. Warships were positioned off the coast and the White House appeared deadly serious. It encouraged the Saudis to rally Arab opinion at the Arab League and beyond. Saudi officials made the case for war and, according to the Wall Street Journal’s Ellen Knickmeyer, they even asked for target lists to study, so that they could join an attack.

But the strikes never came. British Prime Minister David Cameron failed to secure enough votes to intervene. In the U.S., Obama decided to seek congressional authorization after a brief public debate turned against an attack. The Saudis, for their part, made their case loudly and in many venues, even offering to pay in full for an expanded effort to oust Assad rather than teach him a lesson. They did so with confidence that the U.S. would follow through and were subsequently humiliated by the U.S. climbing down. Settling for a Russian deal to remove Assad’s chemical weapons, while pursuing a deeply flawed peace process in Geneva and not punishing the regime in any meaningful way, has created a sense of abandonment in Riyadh.

This may sound absurd to those who hate Saudi Arabia because they think the system is morally bankrupt—but there is a moral component to Saudi foreign policy in Syria. Their support for rebels is not simply a cold calculation to cut off Iran’s right hand in the Arab world. Leaders like King Abdullah see a country under siege from outsiders, both Sunni jihadists and Iranian agents, and a brutal regime defended by Russia and China at the United Nations. They believe the only way to save Syria and stop the killing is to remove Assad by force.

Then there’s Iran. It’s widely assumed that the Saudis fear a “grand bargain” that would allow them to dominate the region. According to this reading, a comprehensive nuclear deal would really be a prelude to a regional security agreement that lessens the burden on the U.S. and gives Iran more breathing room. This fear isn’t new. It dates back to before the Shah fell. Gulf Arab leaders worry that Iran—with its larger population, stronger military and formidable nationalism—could dominate the neighborhood unless outsiders help secure the Gulf.

But why would the Saudis be unhappy with nuclear deal that satisfies the rest of the world? What they’re most alarmed by, I’m guessing, is the public outreach that creates immense pressure to reach a deal even if it’s flawed. A thaw in U.S.-Iranian relations is not out of the question for Saudi Arabia. It’s easy to forget, in a time of heightened sectarianism and bloody proxy battles, that the Saudis have an embassy in Tehran and the two sides occasionally do business in spite of mistrust.

Egypt is another point of contention. The Saudis genuinely believe they backed a popular uprising in Egypt this summer, when the democratically-elected president, Muhammad Mursi, was ousted by a military supported by millions and millions of Egyptians. The ensuing crackdown on the Muslim Brotherhood, to which Mursi belonged, has killed over one thousand people. Thousands of others are in jail. But the general who led the coup is hugely popular and could win the presidency if he ran for office today. This is good enough for Riyadh.

At the same time, the Saudis sees the growing insurgency in Sinai and Islamists resorting to terrorism as proof that violence is part of the Brotherhood’s DNA. The Saudis are quick to frame their support for Egypt’s military as a response to this threat.

In an effort to bolster the interim government, discredit the Brotherhood, and improve Egypt’s fiscal standing, the Saudis have committed $12 billion in aid along with Kuwait and the UAE. By contrast, the U.S. decided this month to strip Egypt of military aid, leaving the Saudis to scratch their head in astonishment. Such confusion could have been avoided if the U.S. acted decisively in the early days of the coup and withdrew aid immediately. But the delayed reaction has only complicated the relationship. Why do it now when the worst of the crackdown is over and terrorism is a serious threat gaining momentum?

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What other factors are driving Saudi policy today? Please comment.

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Now on Foreign Policy: Rowhani’s First 100 Days

Al Ajnabee contributor Reza H. Akbari and I have co-written an article on Iran’s new president for Foreign Policy‘s Middle East Channel. Titled “Rowhani’s First 100 Days,” it focuses on what Rowhani will most likely do in the short-term to correct Iran’s political and economic trajectory.

From the opening:

President-elect Hassan Rowhani will assume office on August 3 with a mandate thanks to his decisive first round election victory on June 14. But in his first 100 days, Rowhani will face a daunting agenda: he must address a struggling economy, form a unity government, send the right signals abroad, and start rebuilding the regime’s legitimacy. Most importantly, he must convince Supreme Leader Ayatollah Khamenei that his agenda is worth blessing.

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What are Iran’s Reformists Thinking?

Today’s guest author is Reza H. Akbari (@rezahakbari). Reza is a Middle East researcher in Washington, DC. He received his MA in Middle East Studies from the George Washington University in 2011. His May article, titled “Ahmadinejad’s Last Stand,” was one of the most widely read articles on Al Ajnabee.

Undoubtedly, the disqualification of Hashemi Rafsanjani stacked the deck in favor of the Supreme Leader and the conservative elites by paving the way for the election of a candidate utterly loyal to the regime. Disqualifying Rafsanjani has, once again, confirmed that the regime’s inner circle is shrinking and that power is becoming more centralized than ever ahead of the presidential election on June 14 (and a possible run-off on June 21).

But why was the reformist faction counting on Hashemi Rafsanjani and why are they currently backing Hassan Rouhani? As long time regime insiders they can hardly be labeled as reformists.

The answer is simple. There is no alternative.

Following the 2009 disputed presidential election in Iran, all major reformist factions were ousted from the political scene and hundreds of reform-minded politicians, activists, and journalists were purged from public life. The 2009 reformist candidates, Mir Hossein Mousavi and Mehdi Karroubi, are still under house arrest at unknown locations.

Significantly debilitated, reformists were left to wonder about their future in a seemingly exclusive regime. Realizing that no major reformist candidate would have a chance of getting through the vetting process carried out by the Guardian Council—the 12-member conservative body in charge of qualifying all election candidates—they viewed Rafsanjani’s decision to run as a blessing.

As one of the founding members of the Islamic Republic, and the current chairman of the Expediency Council, Rafsanjani presented the best chance for the opposition factions in Iran. His long resume included influential positions such as the Chairman of the Assembly of Experts, Speaker of the Parliament, Interior Minister, the de facto commander-in-chief of the military during the Iran-Iraq War (1980-1988). He is also credited for buttressing Ayatollah Khamenei’s ascendency to Supreme Leadership. The possibility of his disqualification by the ruling conservatives seemed slim, making him the only logical option at the time.

REFORMISTS DIVIDED

Currently, there seems to be major divisions within the reformists about election participation in the Islamic Republic. Reformists led by former president Mohammad Khatami announced on June 10 that they will endorse Hassan Rouhani, a moderate cleric who is also backed by Hashemi Rafsanjani.

Rouhani is a member of the Assembly of Experts and the Supreme National Security Council. He has inched closer to the reformists, but more than likely he is vying for popular support, and does not have any genuine plans for transforming the system.

Hassan Rouhani (pictured) now has the support of former presidents Khatami and Rafsanjani

As a long time member of the country’s Supreme National Security Council and the former chief nuclear negotiator, he has proven loyal to the ruling establishment and has managed to retain his positions even after the 2009 shake-up. More than likely, anyone expecting him to cross the regime’s redlines will be disappointed. But he could help ease Iran’s international isolation by being less confrontational and sensational than his predecessor.

Once again reformists find themselves with no alternatives. Presidential candidate Mohammad Reza Aref, former President Khatami’s Minister of Technology, was the sole reformist candidate who dropped out in favor of Rouhani on June 10. Aref did not have the clout to be a real threat in a race packed with conservative heavyweights.

Nonetheless, a quote from him best explains the position of reformists who favor participation: “Boycotting the election is not a form of protest, it is retreating.”

REVIVING A MOVEMENT

By voting for Rouhani, reformists hope to create enough breathing room for the country’s diaspora to reignite the same grassroots activism experienced during Khatami’s presidency. The Supreme Leader may set clear limits but Rouhani’s moderate tone and pragmatism are appealing when measured against some other candidates.

Such an opening may allow the reformist faction to revive the activities of the Islamic Iran Participation Front, a dominant reformist political group, credited for implementing the reformist agenda during Khatami’s presidency (1997-2005). In June 2009, Mohsen Mirdamadi, Saeed Hajarian and other prominent leaders of the party were arrested and the group was essentially dismantled. Mirdamadi is currently serving the remainder of his six-year sentence in Evin prison.

The release of Mousavi, Karroubi, and other political prisoners such as Mostafa Tajzadeh is another top priority for reformists in favor of participating in the upcoming election. Tajzadeh, a former Political Deputy Minister of Interior, was one of the seven leading reformists who sued several IRGC commanders for their alleged intervention in the 2009 presidential election. By electing a moderate figure such as Rouhani, they hope to reach that goal.

SOME URGE BOYCOTT

However, the reformists are far from united. In a recent statement published on June 4, the Mujahideen of the Islamic Revolution, a reformist political faction formed in 1991, asked the country’s reformists to boycott the upcoming election and refrain from supporting a candidate.

A statement released by the group said, “The upcoming presidential elections should not be viewed as legitimate” and the results will “more than likely be engineered.” The majority of the reformists who signed the statement live abroad and allegedly represent the point of view of this domestic faction.

Ayatollah Mohmmad Mousavi Khoeiniha, an Iranian cleric and the secretary general of the reformist Association of Combatant Clerics, has also voiced his disapproval of the upcoming election.

“I do not believe in election participation under any circumstances. Participation will only harm the reform movement… Election participation should be dignified. Election participation should be within the framework of improving the goals of the reform movement. We should not allow the current ruling faction…to lead us to a dead end,” Khoeiniha stated.

The reformist group opposing election participation is less clear about its ultimate goals. Given the country’s current intolerant state, they view participation to be superfluous and serving the interests of the ruling conservatives.

QUESTIONS LINGER: WHAT NEXT? 

Iranian reformists are not naïve. Even Khatami indicated his doubt about the undemocratic nature of the election in prior months. “Even if we [reformists] are qualified, we will not have the right to get any more votes than what they [ruling conservatives] have already decided,” Khatami stated in a speech to university students in Tehran on May 9.

So, the problem for the reformist opposition is not their lack of understanding of the domestic political dynamics or being blindly optimistic about the future. The issue is their inability to reach a consensus about the regime’s ability to reform.

The regime has repeatedly cracked down on any meaningful reforms. Amid the height of the reformist era in the 1990s, popular student protests were crushed, prominent reformists were jailed and threatened, hundreds of reformist parliamentary members were banned from reelection in 2004, and hundreds of other reform-minded activists were jailed and threatened in 2009.

The current goal is to get Rouhani elected in order to create space for the reformists. But what if he is not the winner?

This is an uncomfortable impasse for reformists. If reforms are no longer possible, then what is the alternative? The Iranian opposition — and perhaps the greater public — is not ready to answer that question yet.

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Ahmadinejad’s Last Stand

Our guest author today is Reza H. Akbari (@rezahakbari). He is a Middle East researcher in Washington, DC and received his MA from the George Washington University. Reza’s last post for Al Ajnabee explored the diversity of conservative trends in Iranian politics.

Iran’s complex bureaucracy is slowly getting ready for another presidential election in June, but thus far the dynamic between the president’s faction and the regime has proven to be far from the ordinary.

Mahmoud Ahmadinejad’s tenure in office will be officially over this summer, however, he may not be ready to go down without a fight. Despite all warnings from regime officials, the president seems adamant about engineering a campaign victory for his right-hand man, Esfandiar Rahim Mashaei.

President Ahmadinejad (center) and Esfandiar Rahim Mashaei (left)

Rahim Mashaei has not officially announced his candidacy, but the campaign seems to be well on its way. Numerous analyses suggest that Ahmadinejad’s faction will not have a chance in the election. More than likely any candidate perceived to be associated with the “deviant faction” – a term used to refer to the president’s supporters and his controversial ally Rahim Mashaei – will be disqualified by the Guardian Council and eliminated from the political arena. So, why is Ahmadinejad still campaigning? And how does the government perceive the intentions of the “deviant faction?”

Shortly after the 2009 presidential election, regime stalwarts began referring to Ahmadinejad and his camp as the deviant faction. The rift began when the president publicly challenged the Supreme Leader over his constitutional right to choose the government’s ministers. The critics believe Ahmadinejad’s brand of politics has deviated from the path of the velayat-e faqih or rule by jurisprudence.

WHAT IS HE THINKING?

Ahmadinejad knows the history of the Islamic Republic well. As evidenced by the fate of his predecessors, Ahmadinejad understands that the regime is not kind to losers. The defeated tend to be marginalized, access to the state controlled media is lost, and at times they are even physically harmed.

Mohammad Khatami and his reformist allies were denied any major national prominence after his presidency ended in 2005. Another president, Hashemi Rafsanjani, was ousted from influential positions, after he called for unity following the 2009 presidential election. Mir Hossein Mousavi and Mehdi Karroubi, former regime members and presidential candidates, are still under house arrest at an unknown location.

Given his reputation among the influential regime members, Ahmadinejad recognizes that a dark horizon also awaits him and his camp. So, why stop fighting now?

In Ahmadinejad’s mind, the true test of his legacy will come in the next two months. Ahmadinejad has proven over and over again that he is not willing to go down without a fight and the home stretch is no time to quit. The best-case scenario will be for him to grant a safe passage for Mashaei through the Guardian Council’s vetting process, or at least assure that his faction will survive after he is no longer in office. He may even succeed in rallying the public opinion behind his camp, which may offer some kind of protection after he leaves the office.

The exact next steps of the president’s camp are not clear, but the regime should beware of a man with nothing to lose. The president has demonstrated that he is even willing to play dirty. As displayed on the floor of the parliament during an altercation with the speaker, Ali Larijani, Ahmadinejad is not afraid to publicly disclose sensitive information. In early February, Ahmadinejad challenged Larijani by accusing him of patronage, corruption, and “mafia-like rule.” He went so far as to play a tape of what he claimed was a recording of a conversation between Tehran’s Chief Prosecutor, Saeed Mortazavi, and Fazel Larijani, the speaker’s brother.

According to the tape, the Larijani family had used its prominence for economic gain. Larijani refuted the relevance of the tape and labeled it as blackmail. This unparalleled public confrontation forced the Supreme Leader issue harsh warnings. Ahmadinejad may have similar evidence and, more than likely, he will use such unorthodox tactics to ensure his longevity until the June presidential elections.

In the meantime, Ahmadinejad is doing all he can to paint himself as a populist president by paying lip service to the public. During his trip to the Khuzestan Province in southwestern Iran on April 22, Ahmadinejad announced, “They have sent a message saying that if I become any bolder, they will try to hurt me. I will fight in the service of justice, revolution, and people…until death. Thousands of Ahmadinejads are not worth as much as a drop of justice or a piece of hair from the head of an Iranian citizen.”

During his trip to Semnan Province on April 11, the president went so far as to throw a jab at the Supreme Leader and the ruling establishment. “Some say that the Leader’s opinion dictates that this person should run and that person should not [campaign]. How is this any of your business? The people should decide. All [political] types should run,” Ahmadinejad announced.

The president’s camp also hosted an event on April 18 at Tehran’s Azadi Stadium. The government had previously announced that the event’s purpose was to “acknowledge the servants of Norouz [the Iranian New Year].” However, critics of Ahmadinejad called it an illegal “election gathering,” because many expected Ahmadinejad to bring his chosen successor, Rahim Mashaei.

The controversial rally was held despite the president’s opponents accusing him of spending public funds for an extravagant gathering with political intentions. According to Hossein Shariatmadari, the editor-in-chief of Keyhan, a conservative newspaper close to the Supreme Leader, $40 million was spent on organizing the event. In an editorial written on April 23, Shariatmadari questioned the genuineness the president’s calls for justice and equality. “$40 million was taken away from the oppressed and disposed people in order to organize an election advertising event for Mr. Mashaei in the Azadi stadium. Is this an example of Mr. president’s justice seeking?”

According to IRNA news agency, nearly 70,000 supporters were in attendance, but the Iranian state media showed footage of almost deserted bleachers. Supporters of the president claimed that the video angles were chosen purposefully to only capture the empty areas, and make the event look like a failure.

THE ESTABLISHMENT’S POINT OF VIEW

Ahmadinejad rarely provides any details about the threats he receives, but it is safe to say that he is being pressured by regime officials to end his uncouth behavior. More than likely traditional conservatives do not view Ahmadinejad as a legitimate political threat to their chances of an election victory. The Guardian Council, the major constitutional body in charge of vetting the candidates, is under their control, so any candidate supported by the president could easily be disqualified. But they still view the president as someone who could further damage their personal reputations and the regime’s legitimacy.

More than once Ahmadinejad has announced that he is willing to publicize confidential records exposing his opponent’s past indiscretions. According to the BBC Persian service, during his visit to the Khuzestan Province, the president once again made his intentions public.

“Some send messages saying that they will confront me because of some of my statements. You are nothing in front of the will of the Iranian nation. This nation has stood up in front of the biggest oppressors; compared to them you [traditional conservatives] are nothing. If only the smallest part of your past behaviors are exposed, you will lose your place among the people,” Ahmadinejad declared. Many influential members of the political establishment have warned Iran’s outgoing president about his bombastic behavior, but to no avail.

On April 12, Ayatollah Momen, an influential member of the Guardian Council, warned Ahmadinejad and his camp by stating, “Don’t have any doubt. If we just sense a little deviation from a [candidate], we will disqualify him.” According to the Young Journalists Club, an Iranian semi-official news agency, Sadeq Larijani, the head of the country’s judicial system, criticized Ahmadinejad’s election efforts, saying “Unfortunately, some activities that are carried out with the government’s budget feel like election campaigns.” He continued by adding that such actions are considered to be a “crime” and the Guardian Council and the Judiciary are closely watching the perpetrators.

On April 23, Major General Hassan Firuzabadi, Chief of Staff of the Iranian Armed Forces, rejected the validity of any threats aimed at Ahmadinejad and advised him to be more measured in his claims. According to Mehr News, a semi-official news agency, Firuzabadi labeled Ahmadinejad’s statements as “unacceptable” and aimed at “disturbing the public opinion.” He added, “Mr. Ahmadinejad should stop making such statements.”

The warnings go on, but the regime is not counting on Ahmadinejad to listen. Security preparations are underway to insure a safe and calm election season. Of course, such moves include but are not limited to just concerns about Ahmadinejad’s deviant faction. Having experienced months of instability following the disputed 2009 presidential election, the regime is not taking any unnecessary risks.

It is difficult to assess Ahmadinejad’s ability or willingness to create the kind unrest seen in 2009. But, in the regime’s point of view, any potential for instability is considered a risk; so it’s always better to be safe than sorry.

In an interview with Mehr News on April 22, Firuzabadi also stated that the Iranian armed forces are “completely ready to confront any potential sedition” in the upcoming June elections. “Our armed forces are highly trained and experienced. They have the experience of the 2009 sedition, so they are familiar with the manner and the details of how to confront any potential dangers.”

On April 19, Iranian Police Chief Brigadier General Esmail Ahmadi Moghaddam announced the reimplementation of new “moral and security” measures ahead of the upcoming elections. The move follows an April 16 announcement by Deputy Police Chief Brigadier General Saeed Montazeralmehdi on that an elections headquarters would be created for police to provide security for the elections and monitor anti-regime websites and social media.

The Cultural Ministry also recently announced that all mass text messages sent from election campaigns should be preapproved. According to TELNA, an Iranian information technology website, the spokesperson for ministry stated, “All SMS messages must be sent from traceable and known numbers…the content of such messages will also be controlled.”

In the coming months the battle between the president’s camp and the establishment will intensify. It is impossible to predict Ahmadinejad’s next move, but one thing that is guaranteed is his willingness to fight until the last breath. He does not have that many alternatives. He has to remain aggressive all the way up to the election, since otherwise he risks impending obsoleteness.

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Baghdad and Washington at Odds Over Syria’s Future

U.S. Sec. of State John Kerry was sworn in on February 1, 2013

The Los Angeles Times reported yesterday that Iran is still using Iraqi airspace to shuttle weapons to Bashar al-Assad’s forces in Syria. This arrangement was first reported a year ago, to the dismay of U.S. officials who hoped Iraqi Prime Minister Nouri al-Maliki would stop it. Baghdad promised last year to inspect Iranian cargoes. However, according to anonymous sources quoted by the Times, they have not done so since two planes were brought down in October, one of which was inspected after its cargo was discharged in Syria. On February 25, the New York Times quoted an American official who said the shipments were so routine they could be called “a milk run.”

No doubt these shipments have taken on greater importance in recent weeks. Syria’s rebels “scored a string of strategic victories” early this year and aid from outside sources is strengthening the resistance. Even though the war has not reached a tipping point, Assad needs all the help he can get. And Iran is happy to help. He may need more assistance now than ever before, as the U.S. reconsiders its options, the second anniversary of the uprising approaches, the capital becomes less secure, and the death toll eclipses 70,000.

The sectarian conflict in Syria is deeply unsettling for Maliki. Assad and his most loyal forces belong to the Alawite offshoot of Shia Islam, while certain religious minorities have gravitated to his side or remained neutral out of fear. By all accounts, the resistance draws its power from the country’s Sunni majority; it represents both secular and ultra-conservative trends, all of which aim to drive Assad from power.

Maliki’s logic is simple. The prime minister, who belongs to Iraq’s Shia majority, is worried that Assad’s ouster could inspire Sunnis to rise up in Iraq or—at the very least—resist his rule, which many complain is autocratic. He fears the spill-over effects of a new insurgency, like the one Maliki faced when he first became prime minister in 2006. “Neither the opposition [in Syria] nor the regime can finish each other off,” Maliki told the Associated Press in a February 27 interview. “If the opposition is victorious, there will be a civil war in Lebanon, divisions in Jordan and a sectarian war in Iraq.”

More specifically, Maliki is worried about the strong cross-border ties that connect Sunnis in Iraq’s Anbar province with those fighting Assad next door. For years, Anbar was the beating heart of the anti-American, anti-government insurgency following the 2003 invasion. Violence there subsided only after Sunni militias joined forces with the U.S. to fight Al Qaeda in Iraq.

At the end of last year, outraged Sunnis took to the streets in increasingly large demonstrations against Maliki’s government. They accuse Baghdad of systematic intimidation and abuse. As proof, they point to high-profile cases in which Sunni politicians, including Vice President Tariq al-Hashemi, were charged with crimes against the state—despite a lack of evidence and the use of forced, televised confessions (a hallmark of Saddam Hussein’s rule). Hashemi has been sentenced to death five times in absentia; he now lives in exile. In December, the security detail of Sunni politician and Iraqi Finance Minister Rafi al-Issawi was arrested, kicking off the newest wave of protests. Channeling demands heard elsewhere in the Arab world, demonstrators are calling for the downfall of “the regime.”

Maliki says the Anbar protests can continue but he is eager to dismiss them. Like other Arab heads of state—both democratically elected and self-appointed—he swears the demonstrations are sponsored by foreign powers. At the same time, he has made some concessions, freeing about 4,000 prisoners in order to satisfy Sunni demands. Thus far, his calls for dialogue have not gained traction.

It’s worth noting that Maliki is already locking horns with the Kurdistan Regional Government, the semi-autonomous grouping of provinces in Iraq’s north (these are administered by Erbil rather than Baghdad). The two sides have exchanged threats over oil contracts, export rights, the constitution, and revenues. The KRG and federal government even deployed forces and heavy artillery to disputed provinces in November.

For the prime minister, raising the stakes and risking conflict in the country’s west at the same time may not be an option, especially if it backfires or changes attitudes ahead of Iraq’s upcoming provincial elections. Instead, Maliki has relied on a friendly judiciary to undercut his enemies, security forces to do his bidding, and the Assad regime to suffocate an insurgency before it can poison Iraq’s western territory. Turning a blind eye to Iran’s aid achieves this end.

Iraq’s refusal to intercept Iranian aid to Syria has not been overlooked by Washington. In a September 2012 hearing, Senator John Kerry told Robert Beecroft, now the U.S. Ambassador to Iraq, that aid to Baghdad should be conditional. Informed that Iraq had already been engaged on the matter, Kerry said:

“Well, I mean, it may stop when it’s too late. If so many people have entreated the government to stop and that doesn’t seem to be having an impact, that sort of alarms me a little bit and seems to send a signal to me maybe we should make some of our assistance or some of our support contingent on some kind of appropriate response… it just seems completely inappropriate that we’re trying to help build their democracy, support them, put American lives on the line, money into the country and they’re working against our interest so overtly—against their interests too, I might add.”

Kerry is now Secretary of State. He is closer to President Obama than ever before and his counsel will carry additional weight. It’s unclear if he still thinks holding back aid is a wise choice. But it is one of the only remaining points of leverage the U.S. has now that the occupation is over. In FY 2012, the U.S. provided $1.7 billion of aid to Iraq. That sum could climb over $2 billion in FY 2013.  And, in 2014, Iraq is set to receive its first batch of American-made F-16 fighter jets. This administration doesn’t want to act directly in Syria by arming rebels or intervening militarily. So cutting off Iranian supplies to Assad may be the easier option, even if it complicates relations with Iraq.

Maliki, for his part, may seek to avoid being leveraged, however, as I’ve argued before. Last year, a $4.2 billion deal for Russian military hardware collapsed at the last minute when accusations of corruption were revealed. Officials later said that the deal would be renegotiated. This past week, another deal—this one for roughly $1 billion of Czech aircraft—also fell through.

If the U.S. attempts to leverage Maliki by making aid conditional or withholding military sales, look for both of these deals to be revived soon. Any American threat would be conveyed quietly at first, behind closed doors, so that Maliki is not humiliated. And given the tremendous investment made by the U.S. in Iraq over the past decade, we should expect Washington to give Maliki another chance to redeem himself. But if the Russian and Czech arms deals are seriously expanded in the coming months, it may be the first signal that Maliki is preparing other options in case he’s punished for enabling Syria’s crackdown.

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