Just as President Obama is about to revoke the economic sanctions on Iran’s years-long illegal nuclear projects, the fundamentalist mullahs once again showed their true colors. Iran’s Islamic Revolutionary Guards Corps (IRGC) detained 10 of our sailors at gun point and Tehran’s state-television broadcast images of them with their hands above their heads being involuntarily taken to the Iranian island of Farsi.
While Iran’s aggressive posturing doesn’t surprise me in the least, I find it a national embarrassment that Obama’s policy of appeasing the murderous mullahs led Secretary of State John Kerry to even thank Iran’s regime for eventually releasing the sailors. This kind of response only encourages the mullahs to further act like an outlaw bully, without fear of repercussion.
This will also be the effect of releasing billions of dollars of Iran’s frozen assets, which will surely go straight into the coffers of the IRGC, the very people whose images were broadcast on Iranian state TV parading our sailors as captives.
Critics of the deal rightly worry that sanctions relief will only reinvigorate Iran’s war machine in Syria and elsewhere at a time when pressure could have limited Iran’s regional influence.
Whatever benefits the West hopes to achieve from new investments in the Islamic Republic, they don’t justify the blood that will stain our hands when we feed such a narrow and dangerous segment of the Iranian economy.
Some Western companies are eager to invest in Iran, as evidenced by President Hassan Rouhani’s forthcoming, trade-oriented trip to Italy and France. But for Iranians, the prospects seem dim, since three years under Rouhani have led to no improvement in economic conditions.
According to the Paris-based Middle East Studies Foundation, more than 50% of Iran’s gross domestic product is controlled by 14 entities, all of which are affiliated with the military and security apparatus and controlled by Supreme Leader Ali Khamenei.
Virtually all Western businesses that invest in Iran will be dealing with these entities and contributing to the expenses of the Revolutionary Guards, including financial aid to the Assad regime in Syria.
In September, the French Accor hotel chain signed a contract with the Iranian company Aria Ziggurat on the management of two 4- and 5-star hotels, Ibis and Novotel. Aria Ziggurat is 100% owned by the Segma tourism investment group, the Persian abbreviation for Iran Cultural Heritage & Tourism Investment Group, a branch of the Revolutionary Guards’ companies.
The deferral of Iranian wealth to the Syrian and Iraqi battlefields is obligatory for the Iranian government. The supreme leader has outlined his “6th Economic Plan,” which will be implemented on March 21, calling for a portion of the country’s oil income to be placed on deposit to provide support for “revolutionary entities,” i.e. the Guards and foreign militias.
Any such siphoning of Iran’s new revenue streams is sure to have a negative impact on the domestic economy, since the prospective recovery is already severely limited.
According to Arab Oil Capital Co., Iran can be expected to add only 400,000 barrels per day to its production by the end of 2016 from a starting point of 2.8 million bpd. It will then gain only an additional 300,000 bpd in 2017, falling well short of its pre-sanction levels of 4 million bpd.
The Iranian Oil Ministry’s assessment of the past five years indicates recovery of the oil and gas sector requires more than $100 billion in investment. But Iranian officials have not designed a plan for attracting this capital or overcoming the financial and technical problems that might cause international companies to delay their return to Iran for over a decade.
Furthermore, those initial assessments didn’t take into account the steep decline in the price of oil, which dipped below $30 a barrel this week.
All these factors point to the persistence of the recession that has been suffocating Iran’s economy. On Oct. 7, the International Monetary Fund forecast Iran’s economic growth at 0%. Iranian economists believe the economy will emerge from its crisis only when it has an annual growth of at least 6%.
The money to be released from sanctions won’t seriously boost that economy or improve the lives of everyday Iranians. It will be at the disposal of the Guards and other entities that dominate Iran’s economic infrastructure.
Its real effect will be to provide for the expenses of this regime’s terrorism, export of fundamentalism and suppression of the Iranian people, including dissidents, many of whom are members of the People’s Mojahedin Organization of Iran (PMOI or MEK). This group is the principal organized opposition movement to the clerical dictatorship, and the key component of the National Council of Resistance of Iran. The MEK has seen some 120,000 of its members and supporters executed for daring to demand freedom and democracy.
The Iranians’ ambitions have been frustrated by every Iranian administration since the 1979 revolution. And this has not changed one bit under the tenure of the so-called moderate Hassan Rouhani. In fact, he has broken every campaign promise for a freer and more open Iran.
So when Rouhani visits Italy and France later this month, he’ll try to entice European entities into doing more business with Iran. But even if he’s successful, Iran’s economy will remain engulfed in crises that require serious political alterations in order to be resolved. And these reforms are as far away as ever. So enriching Rouhani’s Iran will do no good for either the political or the economic future of the people of Iran.
Instead of helping to replenish the IRGC’s terror funds, our allies in Europe who share our democratic values, particularly in France and Italy, should be called upon to forcefully take Rouhani to task over Tehran’s abysmal track record of terrorism and human rights abuses. Notwithstanding Rouhani’s façade, Tehran today is no different from any time during the past 36 years. It only understands the language of firmness, and it is only through that language that we will achieve anything of value.
Ken Blackwell is a senior fellow at the Family Research Council and the American Civil Rights Union, and on the board of the Becket Fund for Religious Liberty.