June 17, 2016: With the lifting of sanctions in January Iranians expected an economic boom. That didn’t happen, at least not yet. There were several reasons for this the main one being the lifting of sanctions did not put a lot of additional cash into the economy. The main problem is that the price of oil is still low and oil income used to account for half the national budget and now it accounts for 25 percent. The government budget did increase 35 percent this year but not a lot of the additional $25 billion went to fostering economic growth. The defense budget nearly doubled, to $19 billion. That’s a third of the additional budget money right there. The endemic corruption, especially by the families of senior clerics who run the country, diverts a lot of the additional cash. But at least the problem (failure of the economy to grow, not the corruption) can be discussed openly and it may take a few years but the economy will eventually get going again.

Even before the “victory over America” (as many Iranians describe the 2015 deal that led to most sanctions being lifted) the government was trying to eliminate some of the corruption that was obviously inhibiting economic growth. But that process takes time. Much of the budget increase goes to supporters of the religious dictatorship, especially the IRGC (Islamic Revolutionary Guards Corps), whose leaders openly boast that most of the defense budget increase came from billions of dollars the U.S. had frozen for decades. IRGC commanders also like to get on the TV shows and openly boast that the United States is beaten and easily pushed around. After all, look at what happed in Iraq, Syria and the Persian Gulf (where the IRGC seized ten American sailors in January and got a public apology from the U.S. government before handing them back.)

While the February parliament elections were a big win for pro-reform politicians that did not change Iranian goals and methods much. The problem for outsiders is in Iran “pro-reform” does not mean support for ending the religious dictatorship that has controlled Iran since the 1980s. No, a major complaint of the Iranian reformers is the corruption and inefficiency resulting from the huge business empire the religious conservatives have built up since the 1980s. These companies were taken over by clergy (and their families) for a lot of largely bogus reasons in the wake of the 1979 revolution that overthrew the aristocracy. These huge holdings make the religious conservatives much wealthier, on average, than ordinary Iranians and that is a very unpopular situation. Too much reform could threaten that cozy, and quite corrupt, arrangement. All Iranians want a stronger economy but the reformers understand this will only happen if there is more foreign trade with the West, especially the United States. The “conservatives” want to destroy the West, not trade with it.

Victories & Defeats Abroad

Iran got a backhanded compliment recently when American military advisors and trainers sent to Iraq to retrain and reform the Iraqi Army openly admitted the U.S. plan to expand the Iraqi army and improve the quality of officers and troops failed in large part because Iran offered a more popular alternative. The basic problem was that most men the army wanted to recruit preferred to join one of the Shia militias organized and trained by Iranians. It was all a matter of trust. Potential Shia recruits (in a country where Shia are over 60 percent of the population) did not believe the Iraqi Army could be reformed and rebuilt and felt the paramilitary Shia militias would be better led and more effective even though the Iraqi Army had better weapons and was more likely to get American air support. American military leaders were disappointed, but not surprised. Unfortunately many of the Shia militias are led by men known to have been members of pro-Iran militias that, before 2008, attacked American troops as well as Sunni Islamic terrorists. These militias were disbanded by 2010 but after 2014 were allowed to reform again. This alone was considered a great victory for Iran. What triggered the current American training effort in Iraq was the ISIL (Islamic State in Iraq and the Levant) offensive in mid-2014 that took control of most of western Iraq (Anbar province) and the northwestern city of Mosul, the second largest city in Iraq. By the end of 2014 Iraq had asked the United States to help rebuild the Iraqi armed forces and called in Iran to revive the Shia militias. Then came the rapid and unexpected loss of Ramadi (the capital of Anbar province) in May 2015 by a much smaller force (government troops outnumbered nearby ISIL gunmen by ten to one). After that it became increasingly difficult to get Shia Iraqis to join the army.

In Syria the Iran backed Assad government is encouraged because they, with the help of Iran and Russia, are really hurting ISIL. Now Syrian troops are advancing into eastern Syria and the ISIL capital in Raqqa. Assad forces were driven from Raqqa in mid-2014. But now the Russian and Iran backed Assad forces are advancing on Raqqa city from the west while U.S. backed Kurdish and Arab rebels are advancing from the north. Iran has spent over $10 billion to support the Assads since 2011 and it is paying off. In the last year Iran has expanded the mercenary force of Afghan, Iraqi and other Shia volunteers recruited, trained, armed and paid for by Iran. The largest and most effective Shia paramilitary force is from Lebanon. Thus only about half the Syrian government force advancing into Raqqa province are from the Syrian Army. The rest are largely controlled by Iran while air support and logistics is controlled by Russia. The Kurds have been raiding into Raqqa province since late 2015 and often showed up on the outskirts of Raqqa city. But this time the move south is much more than a few hundred raiders. This time it is several thousand fighters accompanied by American and other (mostly NATO) commandos to ensure that there is plenty of air support. This does not mean that Russia, Iran and NATO are allies in the fight against ISIL. There is some communication and Russian leaders recently admitted that Russia and the United States communicate twice a day and share information on operations in Syria. This is apparently to prevent inadvertent clashes (especially from the air) between the two forces advancing on Raqqa city. Nothing has been revealed about how these two forces would operate once they reached Raqqa city. The easiest way to take Raqqa city is to surround it and cut off the defenders from reinforcements or supply and then coordinate an air and ground attack. But who would end up controlling Raqqa city? This unofficial anti-ISIL alliance won’t survive the capture of Raqqa. Meanwhile Turkey accuses Russia, Iran and the United States of forming a secret alliance to defeat the Syrian rebellion and do a lot of other evil stuff. Many Arabs believe the same thing and believe it is all part of a Western effort to destroy Islam.

In Yemen Iranian support for the Shia rebels has been largely intangible. The Arab coalition air and naval blockade has kept out nearly all Iranian efforts to send in weapons or ammunition for the rebels. Some Iranian (and Hezbollah) weapons have been found. The major Iranian contribution has been a formidable Information War (propaganda and media manipulation) capability. Using this Iran has successfully made a major international issue of Arab coalition air strikes and the resulting civilian casualties. At the same time Iranian publicists and diplomats have successfully played down the Yemeni rebel practices of deliberately using civilians as human shields. Since the Arab coalition entered the Yemen civil war in early 2015 both sides have accused the other of deliberately attacking civilians. The Arab coalition believes their efforts (since March 2015) have succeeded and expect to withdraw most of their forces by the end of 2016. The Yemeni rebels have not surrendered yet but the Arab coalition assessment seems reasonable.

June 15, 2016: In the northwest IRGC troops fought PJAK Kurdish separatists near the Iraq border. Iran claims 12 PJAK and three IRGC dead while Kurds say they killed twelve IRGC men. A large PJAK force came from Iraq and IRGC intercepted them after they crossed the border. Apparently the PJAK force retreated back into Iraq after the clash. There has been more clashes between PJAK and the IRGC since Saddam Hussein was taken down in 2003.

June 14, 2016: In the southwestern province of Khuzestan Arab separatists from ASMLA (Arab Struggle Movement for the Liberation of Ahvaz) bombed an oil pipeline. The state controlled media ignored this but ASMLA posted a video on the Internet as proof. ASMLA has been active since 2005 but not in a big way. The last ASMLA attack (also against a pipeline) was in January 2016 and was mentioned by Iranian media. Since 2005 ASMLA violence has left 50-100 dead, including those arrested and executed by the government. Arabs are the majority in Khuzestan province. While Arabs comprise only about two percent of the Iranian population most of the oil fields are in Khuzestan. The Arabs there are generally hostile to the ethnic Iranians, who are accused of persecuting and not respecting Arab Iranians.

June 13, 2016: In the northwest IRGC troops killed five PJAK Kurdish separatists near the Iraq border. Meanwhile in the southeast security forces killed five Baluchi Sunni rebels and seized a large quantity of explosives that were to be assembled into a large bomb. One soldiers was killed during the raid. The Baluchi are Sunni and complain of religious persecution by the Shia majority running Iran.

June 11, 2016: One of the key components of the Russian S-300 anti-aircraft missile systems shipped to Iran was seen on an Iranian highway. This was the truck mounted fire control radar (that tracks targets and S-300 missiles). After years of delays S-300 deliveries finally got going in late 2015. Iran was to have five S-300 batteries operational by 2017. The S-300 version Iran is receiving can use the latest S-300 missiles with a range of 200 kilometers. Each S-300 battery has a fire control radar and 6-8 launcher vehicles (each carrying four or two missiles). It is unclear if any of the S-300 batteries are actually operational yet.

June 9, 2016: Iranian, Russian and Syrian military leaders met in Iran to discuss Syrian strategy. It is unclear all that was agreed to. The official announcement mentioned the three nations agreed on the need to defeat all terrorist groups. Unmentioned was the fact that while most of the terrorists in Syria are Sunni, one of the largest contingents is from Hezbollah, Lebanese group internationally recognized as Islamic terrorists. Iran disputes this designations in large part because Iran helped create Hezbollah in the 1980s and has bankrolled them ever since as part of an effort to destroy Israel. One of the few things Sunnis and Shia can agree on is the need to destroy Israel and ISIL. Iranian, Russian and Syrian diplomats are also calling for a ceasefire in Syria and eventually a peace deal that leaves the Shia Assad government in control of at least some of Syria. Sunnis and Shia do not agree on the Assads surviving the war in Syria.

June 6, 2016: The government announced that three more IRGC men, including a senior commander, were killed in Syria. All three died near Aleppo where fighting has been intense for weeks. In May the IRGC revealed that over 1,200 IRGC men had died in Syria since 2013.

June 1, 2016: Russian media ran stories about how Russian warships in the Black Sea and Caspian Sea increased training exercises 70 percent in 2015 over 2014. The 2,300 “ship days” in 2015 is expected to increase in 2016 as Russia continues to expand the number of warships in both seas. This includes new submarines and surface warships. The training exercises usually involve patrol boats, larger warships and support vessels. This was not just to improve skills, but to send a message to Iran that Russia was still the primary naval power in the Caspian and to the West that the Black Sea will not become a “NATO Lake.”