December 28, 2018: Inside Iran, the main concerns are the economy and how the government has mismanaged it. In the last year, there have been a growing number of anti-government protests. Most are by Iranians suffering economically and the increasingly obvious government corruption. The government response has been to set up a special anti-corruption court and trying obvious cases of corruption, but only non-government corruption. The most flagrant and hated corruption is found among the families of the senior clergy (who run the country) and the IRGC (Iranian Revolutionary Guard Corps) which protects the ruling clerics from the wrath of the Iranian people. Despite that, the anti-corruption court is finding and prosecuting some major offenders. Over thirty have been sentenced to long prison terms and so far at least three have been executed.

Despite the highly publicized anti-corruption effort the number of Iranians living in poverty (barely making it) has more than doubled (to about twenty percent) in the last year. In addition, most Iranians have suffered reduced income and living standards. The government has lost over half its normal revenue sources in the last year, a fact that appeared briefly on government websites before being removed without comment. The 2019 government budget is supposed to be $47 billion but that is seen as optimistic if only because the Iranian currency has lost half its value (against the dollar, the benchmark for buying imported necessities). While the military boasts of its $7 billion military budget (compared to $20 billion for Israel, $7.2 billion for Iraq, $8 billion for Pakistan, $15 billion for the UAE and $30 billion for Saudi Arabia), a year ago the military was expecting to get $10 billion.

Here’s where mismanagement comes in. The government admits that only about a third of the defense budget goes to improving Iranian defenses the rest goes to secret projects, like supporting wars in Syria and Yemen as well as forces in Iraq and Lebanon. It is obvious that the Iranian military gets little money because the navy is practically non-existent and the air force is an antique show. Despite all the smuggling and improvisation, Iran is stuck with the oldest, least capable fleet of warplanes in the Middle East. Iran currently has about two hundred fighters and fighter-bombers that are flyable but most of these are good for only about one sortie a day. All of these ancient aircraft are subject to breakdowns that can keep them on the ground for days or weeks. The chronic shortage of spare parts limits the number of hours the aircraft can be flown. This means pilots lack good flying skills. The poor maintenance and untrained pilots lead to more accidents. Iran has about fifty modern fighters capable of flying and fighting. Half of these are American F-14s from the 1970s. Although frequently refurbished none have been upgraded much although Iran claims two F-14s have received some modern equipment. Iran has about 30 flyable MiG-29s, all built in the late 1980s and none have received the upgrades most other MiG-29s of that period have received.

The lifting of most sanctions in 2015 did not change the situation much and in 2018 the Americans revived their sanctions because more evidence of Iran cheating on the 2015 agreement was uncovered. No wonder Iran has put so much effort into building ballistic missiles and, eventually, nuclear weapons. In many ways building these weapons is simpler than buying and maintaining modern combat aircraft. Nukes and ballistic missiles require less maintenance because they are used only once. But you can show off the warplanes regularly and that still counts for something. While Iran publicizes the ballistic missile program, it denies the nuclear program despite the fact that Israel publishes huge quantities of Iranian data on the project which does not show up in the government budget. If you were to guess where the money comes from, look at the lack of detail in the military budget and obvious lack of spending on new equipment (or even maintaining and operating the old gear).

Over the years a growing number of military veterans, now living in poverty or getting close to it, have discussed the issue and concluded that the money was not reaching them when they were in uniform. Meanwhile neighboring Pakistan, which has long had defense budgets similar in size to Iran, a fleet of modern warships, and air force of modern aircraft, a well-equipped army, ballistic missiles and nuclear weapons. To a growing number of Iranians, it does not add up. A growing number of senior government officials realize what the people are mad about and secretly agree with the math. But the hardliners and most senior clergy refuse to change because they are on a Mission From God and facts don’t matter.

For most Iranians, the economic facts matter very much. The lower oil revenue and sanctions in general plus the continuing government mismanagement make such a loss in revenue plausible. Unemployment (20 percent) and inflation (0ver 40 percent) rates are increasing and this is something the average Iranian can see right before them. The unemployment rates vary across the country with some areas suffering from over 50 percent unemployment. That news gets around. In the last year, the costs of basic goods have gone up by about 25 percent while average incomes have declined. The growing number of poor and economically struggling Iranians now includes a lot more of the religious dictatorships core supporters (the families of IRGC members and junior clergy).

Some groups are not suffering and that is getting more unwanted (by the non-suffering) attention. In early December someone put a recent photo on the Internet that showed Ahmad Khomeini, the great-grandson of Ayatollah Khomeini (the founder of the Iranian religious dictatorship) wearing expensive Western clothes and in the company of a female polo player. Ahmad Khomeini insisted the photo was stolen from a friend and uploaded to embarrass his father, Hassan Khomeini, one of the fifteen grandsons of the Ayatollah who had become too reformist for the ruling Guardians Council and was barred from running for election to the Assembly of Experts, which elected new Guardians Council members to replace those who have died. Hassan Khomeini is like his grandfather and lives simply but his children, like many of the descendants of the Ayatollah, exploit their family connection to get rich via corrupt practices. Ahmad Khomeini is now being called a luxury agazadeh, a derisive term for members of senior cleric families. This corruption is no secret but wealthy clerical families make an effort to not flaunt it, especially when the economy is doing poorly and most Iranians are suffering. This problem became more acute by the late 1990s. By then Iran's economy had become similar to that of medieval Europe. Back then, the Roman Catholic Church owned about a third of the real estate in Europe, the result of centuries of donations to various church institutions. Thousands of churches shrines and monasteries had endowments (usually land, and serfs obliged to work it). This wealth could not be taxed, and eventually, greedy kings, or needy parliaments, seized the church lands, so that today the Roman Catholic Church is a very minor factor in the European economy. Not so in Iran, whereby 2008 over 70,000 mosques, shrines and religious schools owned more than a third of the economy, paid no taxes, and even had their own army (the IRGC). But there's one big difference between medieval Europe and contemporary Iran. About a thousand years ago, to prevent clergy from passing church property on to their children, the Roman Catholic clergy were forbidden, henceforth, to marry. This was never imposed on Moslem clergy and in Iran, the families of clergy have a monopoly on jobs, and business decisions, within the religious portion of the economy. All those assets are there to serve, first and foremost, the clergy and their families. This has not gone unnoticed. Before the Shah was overthrown in 1979, the religious assets were much smaller and were supervised by government officials. The clergy did not like this at all, and that supervision was quick to disappear once the monarchy was gone. Another post-Shah change was that, rather than wait for pious Iranians to donate property to religious institutions, the clergy seized the assets of wealthy "enemies of the state" and turned the goodies over to religious institutions. The clergy try to portray themselves as pious stewards of these assets. But the truth is less savory, and is not invisible. All that PR and propaganda just enrage the population more. A growing number members of these wealthy clerical families are trying to reform the system before there is yet another civil war (Iranians have been noted for that for thousands of years) that will rip the country apart and probably leave Iranians worse off than they are now. These reformers believe that the violence could be triggered by something like photos of a luxury agazadeh enjoying the company of immodest women and polo ponies.

It should be no surprise that many of the current protestors are calling for a return of the monarchy. In part that is because nothing irritates the religious dictatorship than calling for a return of the monarchy. The Shia clerics led a revolution that enabled them to oust the monarchy in 1979 and then take over the government in the 1980s. The current generation of Iranians has no actual experience living under the monarchy but it is clear from photos, videos and whispered confirmation from their elders that life was better under the monarchy even though there was still corruption, favoritism and secret police. In short, the Shah (emperor) was never as crazy as the current religious dictatorship. It is telling that the overseas Iranians (whose numbers have grown enormously since the 1980s) are organizing to support another revolution and many of the exiled aristocracy are involved, including the children of the last shah.

Afghanistan

The U.S. Department of Defense recently revealed that it had found (via its many contacts with the Afghan government) that it had become common for Afghan officials to be bribed by Iran to support Iranian interests. Most of the bribes are in support of Iranian economic interests. But there are also bribes regarding support for the Taliban, not to overthrow the Afghan government, but to help in the fight against ISIL and protection of the Afghan minority. This last point is important because most of the Afghan refugees still in Iran are Shia and over 20,000 have volunteered to serve as Iranian mercenaries in Syria. Iran does not support the Afghan drug gangs that provide the main financial support for the Taliban and the Iranian border with Afghanistan has been a battle zone for years as Iranian border forces shoot to kill when they encounter Afghan drug smugglers (who often shoot back and fight their way through.)

These bribes have also allowed Iran to maintain official contacts with the Taliban and participate in peace talks with the Afghan Taliban. Iranian ally Qatar hosts a Taliban headquarters where the Taliban can, in effect, meet with anyone to discuss anything. Recent Russian sponsored Afghan peace talks attracted delegations from Russia, India, Iran, China, Pakistan and five former Soviet republics in Central Asia as well as non-government groups from Afghanistan and some Americans as observers. Technically the Taliban cannot be in Russia because Russia recognizes the international designation of the Taliban as a terrorist organization. Nevertheless, the Taliban insisted they would make peace only if all foreign troops left and there were international guarantees to keep the Americans from returning or aiding Afghans fighting the Taliban.

Since 2017 over a thousand Taliban have received training in Iran, along with weapons, in return for some cooperation. This sort of foreign meddling is unpopular in Afghanistan where such interference by neighbors, especially Pakistan and Iran, is an ancient and always unwelcome problem. But Iran and Pakistan both interfere and Iranians and Indians have done so for thousands of years and see no reason why they should not continue doing so in the 21^st century. For Iran, it’s mainly about trying to protect their fellow Shia from attack. Some 15 percent of Afghans are Shia and are a particular target for Sunni Islamic terrorists like ISIL. The Taliban and al Qaeda are less likely to attack Shia because both organizations sometimes discreetly rely on Iran for sanctuary and other support. Most of the Afghan Shia are Hazara, who are ten percent of the population and the descendants of the hated Mongols who conducted several invasions of Afghanistan during the 13th and 14th centuries. These Mongol attacks destroyed more of the country and its population than any other conquerors. In addition to bad memories, the Mongols left behind Mongol warriors who settled down and married local women. For centuries Hazara have suffered a lot of discrimination and actual violence in Afghanistan. But Iran is seen as an ally (at least against Pakistan) by most Afghans and Iran is mostly Shia and sees itself as the defender of all Shia.

Syria and Israel

The Syrian economy is a mess and Iran is currently the only one helping out. Syrian GDP is about half what it was in 2011 and limping along largely with the help of economic aid from Iran. The enormous expense (billions of dollars a year) has caused growing unrest in Iran and that aid may have to be cut. Gulf Arab states have expressed an interest in providing huge amounts of aid and loans for reconstruction, but only if Iranian troops and mercenaries are removed from Syria. In fact, no one is willing to put a lot of money into rebuilding Syria has long as Iran has a large military force there whose main goal is to start a war with Israel. This presents the ruling Assad clan with a dilemma. Do they try and betray their long time (since the 1980s) benefactor Iran for the good of Syria or stand by while Syria remains rubble, poverty and hunger while Iran tries to take on Israel. Even Iranian allies Russia and Turkey are unwilling to invest in a potential war zone and would prefer that Iranian military forces leave Syria. Worse, for the Iranian religious dictatorship, most Iranians back withdrawal from Syria and have been openly demonstrating for that since late 2017.

With the Americans soon gone from Syria Iran cannot use the excuse that the Iranian presence in Syria is to deal with the American presence. For Iran, another reason for being in Syria is to help prevent the creation of another autonomous Kurdish area in northeast Syria which would, because of the autonomous Kurds of northern Iraq next door, create the basis for the Kurdistan state Kurds in Syria, Iraq, Iran and Turkey have been seeking for centuries. Syria, Iraq, Iran and Turkey most definitely agree on none of them wanting to contribute territory and population to create a Kurdistan. One of the founding principles of the UN was to respect existing borders. This has not prevented the creation of new breakaway states (like Kosovo and South Sudan) but officially the UN does not encourage it (otherwise the UN would lose a lot of its major members and most of its financial support.) This was one reason for pulling American troops out of northeast Syria. Helping the Kurds create an autonomous area in Syria was never an American objective and it is obvious that the Syrian Kurds thought otherwise by the way they have reacted to the American departure. Some Arab states (like the UAE) who have been quietly working with the Americans in Syria to support the SDF (Kurdish led rebels) have indicated they would be interested in staying and expanding their commitment (by bringing in more special operations troops and providing some air support) but that won’t replace the U.S. effort and may not be possible because of threats from the Turks. The SDF are technically rebels but have always been willing to make deals with the Assads. Iran and ISIL are another matter and everyone knows it. The Syrian Kurds could still get some autonomy if they cooperate in crushing ISIL in eastern Syria. The only complication is Iran.

With the Americans leaving the SDF is shifting its forces to face the Turks who are, and always have been, their most formidable threat. Ominously the Turks have also reinforced their forces facing the SDF. But figuring out who might attack, or support, the SDF now is not easy. The Turks do not want to fight the SDF for the very simple reason that there is not much popular support in Turkey for any operation that would get a lot of Turkish troops killed in Syria. For that reason, since the Turks crossed the border into Syrian in 2016 they have used local FSA (secular Free Syrian Army rebels) forces to do most of the fighting. What the Turks do want is to get the Kurds, especially YPG (Syrian Kurdish separatist) forces, away from the Turkish border. Going much further than 20 kilometers south of the border (at least on a permanent basis) is not part of the Turkish strategy. Turkey expects to use over 10,000 FSA fighters against the Kurds, along with Turkish tanks, artillery and air power.

Likewise, the Syrians use Iranian mercenaries (many of the Afghan Shias) for the heavy combat. The Syrian Army was never noted for its combat capabilities and after seven years of civil war, there are few Syrian combat units with much ability or willingness to carry out a successful offensive.

The Russians don’t have sufficient ground troops to carry out a large scale offensive and the most effective Russian ground troops are Russian mercenaries because Russian popular opinion is very hostile to Russian troops getting killed in foreign wars. Iraqi officials openly discussed sending Iraqi troops into Syria but the Iraqis have an even worse reputation for combat effectiveness than the Syrians. There was talk of the Saudis and UAE replacing the Americans in Syria. Possible in theory but not likely in practice. The Saudis are more concerned with the Iranian threat to Saudi Arabia itself.

That leaves Israel, which is focused on Iranian forces in Syria and Lebanon and continuing Iranian public backing for the destruction of Israel. Armed with the most formidable air force and special operations troops in the region Israel is currently allied with the Gulf Arab states being threatened by Iran.

The Americans are long-time allies of Israel and Saudi Arabia (and most other Gulf Arabs) but the American government has no popular support back home for getting into another Middle Eastern war. The American troops were in Syria to help the Kurds defeat ISIL (Islamic State in Iraq and the Levant) and other Islamic terrorist threats. That is one thing most everyone in Syria (Turks, Russians, Iranians and most Syrians) can agree on. With the Americans gone, there are few factions in Syria who do not want to see all the Islamic terrorists eliminated. There are some ISIL remnants still active in eastern Syria which everyone has been allowing the American backed SDF deal with. In northwest Syria, the remaining non-ISIL Islamic terrorists are trapped in Idlib province and the Turks, Syrians, Iranians and Russians are still debating how to eliminate that lethal (if attacked or left alone) collection of over 20,000 Islamic terrorists (including some ISIL members).

With all this, the Syrians are willing to discuss some sort of autonomy deal for the SDF led Kurds in the northeast. All Syrians agree the Turks should be kept out as much as possible. All factions in Syria agree that Iran is a serious problem what with the Iranian goal of trying to destroy Israel the most militarily effective nation in the region and the only one with nukes. No one wants to be collateral damage if Iran makes a major attack on Israel.

Israeli military leaders believe they are winning their battle to keep Iran from establishing a permanent presence in Syria, even with American troops leaving northeast Syria. This Israeli goal has been achieved via combination of force (air and artillery strikes on Iranian bases and personnel in Syria) and diplomacy (convincing Russia to persuade Iran to keep their forces away from the Israeli border or suffer Israeli attacks that the Russians will not interfere with). Other diplomatic activities involved the Americans and Arab nations. There is general agreement by Israel and their Arab allies that the forces Iran has assembled in Syria and Lebanon are a far greater threat than Hamas in Gaza. But this war is not yet won and whether it is depends more on what happens in Iran. The Americans are preparing to pull their 2,000 troops out of Syria but not their support for the large force of Syrian Kurds who did most of the fighting to destroy the ISIL presence in eastern Syria.

Iraq

The Iraqi Parliament agreed to approve three more government ministers but five are still pending. This is seven months after the elections and the main reason is the size and complexity of the party coalition used to form the current government. There are more political groups that can threaten to leave the coalition if their veto of a ministerial candidate is not acted on. The differences are particularly acute between Shia nationalists (led by the Sadr coalition) and the pro-Iran parties (particularly Badr).

While the problems with Islamic terrorism in Iraq are declining the problems with neighbor Iran are increasing and causing more political disruption. The anti-Iran election results earlier in the year created some initial confusion among Iranian leaders but that is gone now and Iran is pushing Iraq hard to ignore the American sanctions and help Iran evade them. Iraq is cooperating as much as it can, but not out of sympathy for or fear of Iran but because there is money to be made helping Iran out. Even so, Iraq does not blatantly flaunt the American sanctions because in many respects Iraq needs the Americans more than they need Iran. Moreover, the United States can be more trouble, using legal means, than Iran. The Americans can respond by going after the Iraqi corruption in addition to invoking banking and other financial restrictions. At the moment most Iraqis see the Americans as the good guys and the Iranians as the bully next door, and often just down the street because pro-Iran PMF (Peoples Mobilization Forces) commanders are being more aggressive with the army and any Iraqis who openly oppose Iran. The growing number of murdered Iraqi politicians is attributed to Iranian death squads, Iran denies this but it is something the Iranians do everywhere.

All this Iranian interference increases the risk of civil war in a country that has a minority of the Shia majority willing to use violence to support Iran. Pro-Iran PMF militias take orders from Iran and that is increasingly unpopular with most Iraqis. Iraqi leaders have been subjected to a lot of pressure from Iran to ignore the American sanctions. Iran pointed out that complying with the sanctions would hurt the Iraqi economy. That pressure caused Iraqi leaders to comply with the more immediate threat (Iran) even though they realized that most Iraqis preferred the Americans to the Iranians. After all, when Iraq asked the Americans to leave in 2011 they did. Iraq is seeking an exemption to some of the Iran sanctions because otherwise the Iraqi economy would suffer and the U.S. has been granting these requests. Iraqi economists and financial experts have made it clear that the Americans have a lot of options and many of them involve going after individual pro-Iran Iraqi leaders, especially those who are the most corrupt. Sanctions on individuals have proved very effective and Iraq has a lot of eligible targets. The Kurds had another advantage in that they were on good terms with the Americans who in turn had the ability to chase down leads via the international banking system. That turned up more leads and hiding places for ISIL money. Lastly, while the Americans are withdrawing their 2,000 troops from Syria they are apparently planning on stationing many of them in Iraq, along the Syrian border to protect Iraq from continued ISIL attack

Yemen

The Saudis have a major incentive to shut down the Red Sea port of Hodeida because that port has made possible major smuggling operations to get Iranian weapons (especially long range missiles) to the rebels, who then fire those missiles at targets deep inside Saudi Arabia. These missiles have, so far, done little damage because of the Saudi anti-missile defenses (Patriot PAC 3 anti-missile missiles). The fighting that has shut down Hodeida has also halted the delivery of these missiles (which are broken down and smuggled in as smaller items that are reassembled under the supervision of Iranian technicians). Because of this keeping Hodeida under siege and largely inoperative benefits the Saudis because it is much more difficult to smuggle in large Iranian missiles using the smaller smuggler boats (coastal fishing boats and cargo transports). For the moment all of these small smuggling efforts appear to be carrying small arms, ammo and short range rockers (and mortar shells). The rebels are not getting any more of the large Iranian UAVs because of this and have to rely on the commercial quad-copters which are much easier to obtain via commercial shipments.

The Shia rebels and their Iranian backers are both obsessed with self-destructive, and dangerous for bystanders, goals. The Shia rebels want their autonomy back. The Sunni majority in Yemen opposes autonomy or weapons for the Shia up north because those two things have made the Shia tribes a constant source of trouble for centuries. Iran wants world domination, starting with control of Saudi Arabia and most of the Middle East. Iran also seeks to destroy Israel and the United States. Neither Iran nor the Yemeni Shia have a reputation for honoring promises, treaties or anything that limits their activities. In short, negotiations may seem smooth but compliance will be in short supply. Expect both sides to resist implementing an actual, working, ceasefire or truce.

The Shia tribes never had the degree of Iranian support they have now. That support has included large shipments of Iranian ballistic missiles and rockets. These are primarily for use against Saudi Arabia. Because of that Saudi Arabia can both identify with what Israel is going through with Hamas and Hezbollah rocket attacks, because Iranian sponsored Shia rebels in Yemen have been firing rockets, ballistic missiles and, mortar shells and machine-gun bullets into Saudi Arabia since 2015 killing over a hundred civilians and soldiers on the border. The Saudis have found the American made Patriot anti-missile missiles very effective in stopping nearly all the ballistic missiles. The shorter range rockets are another matter and there have been discussions about obtaining the Israeli Iron Dome anti-rocket system.

This rocket and missile threat to Saudi Arabia will make negotiating a Yemeni peace deal difficult. The Yemeni Shia have always been hostile to the Saudis but now it has moved beyond that. The Saudis will not accept any peace deal that does not guarantee a halt to the rocket and missile attacks. That means more government control of the Shia tribal areas of Yemen than before the rebellion began. That will be difficult for the Yemeni Shia to accept but for the Saudis nothing less is acceptable. Continued rocket and missile attacks would be evidence of Saudi inability to defend its own borders and the Saudi citizens that live there. Iran knows this to but the UN is less concerned about that sort of thing.

December 27, 2018: Commercial satellite photos show that the Iranian Fajr-5 rocket storage site outside Damascus was completely destroyed by the Israeli airstrike on the 25^th. That complete destruction was made possible by their being a lot of rockets at the site, which also exploded thus increasing the destruction. These are called “secondary explosions” and indicate that the target contained a lot of explosive materials.

In Yemen, the Iran backed Shia rebels violated a port of Hodeida ceasefire 27 times in the first 24 hours.

December 25, 2018: In Syria Israel carried out air strikes against three targets outside Damascus that were apparently Iranian or Hezbollah bases or warehouses. One of the targets was a meeting of senior Hezbollah leaders that left several of those Hezbollah commanders dead, or not. The Hezbollah leaders may have flown off to Iran shortly before the attack. Half an hour before the airstrikes an Iranian B-747 freighter aircraft left Damascus after making a delivery from Iran that was believed to be weapons because the 747 belonged to the IRGC. The same 747 had left Iran earlier in the day and apparently arrived in Damascus and unloaded before it returned to Iran. Shortly after the airstrikes in Damascus, an Israeli anti-missile missile intercepted a missile from Syria. There was no damage (from falling debris) to any residential areas. The Syrian missile was apparently an S-200 antiaircraft missile that fired at a target south of Damascus and missed. Because Damascus is so close to the Israeli border this sort of thing was expected and has already happened before. The problem is the incoming spent S-200 (not aimed at anything in particular) looks like an incoming missile headed for a specific target and Israeli anti-missile defenses react automatically. Since the missile is intercepted over Israeli territory fragments of that missile can be collected and the missile identified.

December 24, 2018: As agreed an Indian firm (Indian Ports Global) took over management of the southeastern port of Chabahar. This management deal lasts ten years and that played a role in ensuring that the renewed American sanctions on Iran would not interfere with the new trade route from Afghanistan, via Iran to the Indian Ocean port of Chabahar. The Americans make exceptions for these sanctions and in this case, Pakistan is seen as a larger threat to Afghanistan than Iran. Most of the truck traffic that used to go through Pakistan to the port of Karachi is now using the new route via Iran to Chabahar (built by India and Iran mainly for traffic to Afghanistan and Central Asia). At least $5 billion worth of trade to and from Afghanistan will use Chabahar each year. Pakistan is the big loser here, especially since they had recently increased higher traffic on Afghan goods moving through Karachi. In addition, since mid-January Pakistan has closed the main border crossings to Afghan traffic entering Pakistan. Yet Pakistani goods are allowed into Afghanistan and now the Afghans are considering blocking that and depending on trade links via Iran and Central Asia. This is an undeclared trade war by Pakistan. The main reason is growing trade with India and switching from Karachi to Chabahar for Afghan imports and exports. The United States, India, Afghanistan and the UN are increasing pressure on Pakistan over Pakistani support for terrorism.

December 23, 2018: In southern Syria (the Israeli border in Golan Heights), Israeli troops fired on several armed men trying to enter Israel. The intruders fled back into Syria. Iran is trying to move more Iranian controlled forces to the Israeli border.

December 21, 2018: The U.S. granted Iraq a 90 day extension on the original 45 day exemption on some Iranian sanctions. Iraq made a case that they needed an exemption to some of the Iran sanctions because otherwise, the Iraqi economy would suffer. This was especially true with Iraqi dependence on Iran for electricity and natural gas imports.

Israeli intelligence believes Iran is moving all its missile upgrade to Lebanon because it is believed that the upgrade facilities would be safer from Israeli air attack there. 

For the first time, an Iranian B-747 freighter aircraft delivered missile components directly to Lebanon. These components add GPS guidance to long range unguided rockets. The transport flew over Iraq and Syria. In mid-November, Israel warned Lebanon and Iraq that Iranian use of their territory to upgrade unguided rockets with GPS guidance kits will result in Israeli airstrikes to destroy those operations unless local governments act. Lebanon is more of a problem because of its relationship with Iran and Syria. Hezbollah, a 1980s creation of Iran, is an autonomous military force in Lebanon and dominates local politics via terror and threats of violence against those who resist. Hezbollah, like its patron Iran, is dedicated to the destruction of Israel. Iran is currently trying to turn Syria and Iraq into subject states similar to Lebanon. Most Syrians and Iraqis want to avoid this but it isn’t easy because Iran is clever, determined and fanatic about the “destroy Israel” thing. What complicates the situation in Syria is that there a lot of major players.

December 20, 2018: Off the west coast IRGC ships fired some rockets near where the recently arrived American nuclear powered aircraft carrier was patrolling. The IRGC also flew a UAV near the carrier. Two years ago the IRGC boats would have gotten closer but the American have become more aggressive since then, even to the point of opening fire on boats that got too close.

December 19, 2018: The U.S. announced it was pulling all its troops from Syria and some of its forces in Afghanistan.

The Iranian Foreign Minister gave an interview with French media and declared that Iran was not intent on making war with and destroying Israel and that the constant call for “death to Israel” was all about the fact that Iran believed Israel would self-destruct. This caused some controversy in France and Iran. Many French leftist politicians back the idea that Israel is the aggressor in the Middle East while in Iran the Foreign Minister found himself sharply criticized by his own government where most senior clerics interpret “death to Israel” to mean Iran will do the destroying.

The UN met and agreed that the Hezbollah tunnels into Israel existed but refused to take any action against Hezbollah or Lebanon unless such a resolution also condemned Israel for regularly flying over Lebanon in recon missions or to launch missiles at targets in Syria. The head of UN peacekeeping backed action against Hezbollah because the tunnels were clearly a warlike act that took place, literally, under the noses of the UN peacekeeping force on the Israel/Lebanon border. The tunnels were about 25 meters (80 feet) deep and two of them crossed the border. Hezbollah launches attacks on Israel and when Israel responds it is condemned for aggression.

December 18, 2018: Diplomats from Russia, Iran and Turkey decided they were stalemated at a meeting in Switzerland. This is a UN sponsored conference to decide who shall be on the Constitutional Committee that will create a new constitution for Syria. The three nations could not agree on several dozen of the 150 committee members. The three nations will try again in early 2019. This committee is the result of a UN proposed compromise that includes a new constitution and monitored elections in Syria to form a new government. Iran wants to ensure that the Assads retain power, Turkey wants someone elected who has popular support and Russia will back whoever seems to have the best chance of getting on the committee. The three countries also disagree on who shall control what territory in eastern Syria once ISIL and the Kurds are pacified.

December 17, 2018: Russia has quietly withdrawn from a $30 billion agreement with Iran to develop new Iranian oil and natural gas deposits. Russia does not want to broadcast that it is complying with sanctions against Iran, a decision that was made several months ago. There was another reason for the Russians shutting down this project; the Russian national oil company had taken on too much debt and its foreign lenders were insisting on reductions in obligations. The renewed sanctions on Iran gave Russia a way out which allowed them to get back in at a later date.

December 16, 2018: Ghodratollah Mansouri, the commander of IRGC forces in northeastern Iran was reported to have accidently shot himself in the head while cleaning his pistol. Mansouri has held his job in the northeast since 2014 and his command includes the city of Mashhad, long a very pro-government area. This changed a year ago when Mashhad was the scene of the first anti-government demonstrations that continue. The protests spread to areas throughout Razavi Khorasan Province, which city of Mashhad, with 3.3 million people, is the center of as well as being the second largest city in the country. Mashhad is near the borders with Afghanistan and Turkmenistan. Such public gatherings are illegal but video of the ones that took place a year ago spread via the Internet and new demonstrations took place in more cities. The demonstrators were criticizing the government involvement in foreign wars and Islamic terror groups like Hezbollah in Lebanon and Hamas in Gaza. Other complaints were mainly economic, including the corruption in the government and lack of opportunity for young Iranians. A few days before Mansouri suffered his accidental death the head of the Iranian religious dictatorship, Ayatollah Ali Khamenei, openly called on the IRGC and everyone supporting the government to brace themselves for even more widespread and violent anti-government protests. Many Iranians fear the growing protests could escalate into a major uprising and rebellion. For someone like Ghodratollah Mansouri, who began his military career during the 1980s Iran-Iraq war and later served in Syria and Iraq (as most senior IRGC forces did after 2012, for at least a few months), this was a disturbing development. The Iranian people were rejecting his revolution.

December 15, 2018: Russia has done Iran a favor in Syria by allowing them to use Russian flags on Iranian and Hezbollah bases. Israel went public about its complaints to Russia about this. The Israelis indicated that Russia had refused to halt the practice. This seems to be a setup because normally when Israel coordinates its air operations over Syria with the Russians it is done quietly and not in the open. The Israelis have ways to verify if the presence of a Russian flag at a base or compound actually indicates the presence of Russians and moreover it has long been known that the Russians quietly share location information for all their forces in Syria to ensure they are not hurt by an Israeli air, missile or artillery strike. Going by where flags are flying sounds like the Iranians would use to indicate a victory over Israel, something Iran badly needs.

December 14, 2018: In the southeast, across the border in Pakistan (Baluchistan) 30 gunmen attacked a Pakistani frontier guard convoy, killing six and wounding 14 frontier guards before fleeing. The attackers lost at least four dead and were believed to have retreated into Iran. Pakistan demanded that Iran provide any intel on a group based in Iran that could or would make an attack of that magnitude there are several Pakistani and Iranian Islamic terror groups operating near the border as well as smuggler gangs that are often prepared to fight any security personnel they encounter while moving goods or people (illegal migrants) across the border.

December 13, 2018: An Israeli military and diplomatic delegation is meeting with their counterparts in Russia to work out details of future cooperation in Syria, especially with regards to Israeli operations against Hezbollah in neighboring Lebanon. Russia has never agreed with the Iranian goal of trying to destroy Israel. Russia sees Israel as a valuable ally in the region while Iran is considered, apparently, a necessary evil for Russian operations in Syria.

December 12, 2018: The government has managed to reverse, for the moment, the decline in the value of Iranian currency against foreign currencies. Using a combination of Central Bank spending more dollars to support the rial and the police driving a lot of black market currency exchange operations out of business, or suspending activities until the crackdown subsides, the exchange rate has returned to what it was at the end of July (105,000 rials per dollar). The collapse of the rial was caused by inflation rising faster than expected. The inflation rate of nearly 40 percent is mainly the result of shortages of essential items, like medicines and many consumer items. Food is getting more expensive. The shortages and rising prices are mainly because the rial has lost so much of its value compared to the American dollar. In late November one dollar cost 120,000 rials on the black market versus the official (government) rate of 42,000 rials. Foreign currency market analysts believe the official rate is about half what the real rate is and that more extreme rates are more about so many Iranians participating in currency speculation than anything else. That explains the peak of the speculation in October when it briefly hit 190,000 rials per dollar. The government does not have enough dollars to meet demand and increasingly the black market rate is all anyone has access to. Because of that, the speculation driven peaks don’t last but they do contribute to the general uneasiness about the economic future. Iran is now trying to ban the use of dollars inside Iran.

December 10, 2018: In Afghanistan, local security forces in Ghazni province displayed a large number of recently captured Taliban weapons that were manufactured, quite recently, in Iran. The provincial governor accused the Iranians of supplying the Taliban with weapons.

December 6, 2018: In the southeast (Sistan-Baluchistan province), terrorists attacked the police headquarters in the port city of Chabahar, leaving two dead and over 20 wounded. A suicide car bomber and several gunmen were involved. Sunni Baluchi separatists are suspected.

December 1, 2018: Iran conducted another ballistic missile test and this one featured something new; a MIRV (Multiple Independent Re-entry Vehicles) warhead. MIRV warheads not only deliver more separate weapons but are more difficult for anti-missile systems to cope with. MIRV warheads have never been used for anything but nuclear weapons. Iran made no accouchement of this test because it is a violation of the 2015 sanctions treaty. By the end of the day, the Americans had openly condemned Iran for this test, which Iran continues refusing to comment on.