IRAN'S MIXED ECONOMIC BAG
In the wake of this summer's nuclear deal with the West, and even though the sanctions relief inherent in it has not yet materialized, Iran's government is moving to maximize the expected benefit through a major economic restructuring. According to Central Bank of Iran (CBI) Governor Valiollah Seif, the regime's new economic stimulus plan - which came into effect on October 6 - involves a series of fixes intended to strengthen the Islamic Republic's currently-rickety economy. These changes include the creation of seven-year car loan options, the reduction of interest rates in banking deposits and loans, and the provision of 75 trillion rials (approximately $2 billion) to Iran's development budget.
This does not mean, however, that all is well on the financial front. In a recent open letter, four Iranian cabinet members warned that the current economic depression within the Islamic Republic could turn into a full-blown crisis if not properly handled. The four signatories (the regime's economy, industries, labor and defense ministers) highlighted rising foreign exchange rates, the decline of the Iranian stock market and shrinking consumer demand, among other issues, in making their assessment. The letter, moreover, points out an unexpected downside to normalization of relations with the West: that the coming influx of foreign business could seriously damage domestic companies. (Tehran Rooz, October 7, 2015; Tehran Times, October 27, 2015)
NEW HORIZONS FOR THE RUSSIAN-IRANIAN ALLIANCE
Now that a nuclear deal has been concluded between Iran and the West, Russia's relations with the Islamic Republic are expanding exponentially. The latest sign of this growth is the announcement by Russian Energy Minister Alexander Novak that his government will build two or more nuclear power units in southwestern Iran at a cost of some $11 billion. Novak's declaration caps a two-day visit by the Russian official to Tehran - and represents a concrete manifestation of growing engagement from the Kremlin. As part of this outreach, Iran and Russia are reportedly planning a slate of joint projects in various economic sectors worth between $35 and $40 billion, and Russian state gas titan Gazprom has offered to trade gas with Iran across the Caspian Sea. (Tehran IRNA, October 24, 2015)
LEGAL TROUBLES FOR THE JCPOA
Is the nuclear agreement with Iran even legal? A number of policymakers, reviewing the text of the agreement, have concluded that it isn't. They point to a key sanctions relief provision contained in the Joint Comprehensive Plan of Action, or JCPOA, which will allow tens of billions of dollars of U.S.-backed commerce with the Iranian regime, as conflicting with existing federal law. Specifically, while the nuclear deal allows foreign subsidiaries of U.S. companies to do business with Iran, under certain conditions, such conduct is prohibited under an earlier piece of legislation known as the Iran Threat Reduction and Syria Human Rights Act of 2012, signed into law by President Obama in August 2012, which mandates that foreign subsidiaries of U.S. companies be proscribed from business with Iran in the same way their parent firms are. Congressional lawmakers are promising greater attention and debate over this aspect of the deal in coming weeks. (Fox News, October 9, 2015)
IRAN'S COSTLY CAMPAIGN IN SYRIA
Iran's ongoing military involvement in Syria in support of the Assad regime is exacting an increasingly heavy toll. The Iranian government has confirmed that Revolutionary Guards Corps (IRGC) general Hossein Hamedani was killed in early October near Aleppo, Syria while advising Syrian forces in their fight against the Islamic State terrorist group. Hamedani was deputy to Gen. Qassem Suleimani, the commander of the IRGC's elite Qods Force paramilitary unit - making him the highest profile Iranian casualty in the Syrian civil war to date.
His death, however, has not prompted a change of course in Tehran. In recent days, a top Iranian military official has confirmed that Iran's Revolutionary Guard Corps has sent additional military advisers to Syria to augment the Assad regime. According to Gen. Hossein Salami, the deputy commander of the IRGC, the Guards are also playing an increasingly active role in mobilizing pro-regime forces in Syria to fight on the side of Damascus. (Riyadh Al Arabiya, October 9, 2015; Associated Press, October 27, 2015)