14 July 3, 2016 News & Analysis Power struggle in Iran over the Syrian quagmire

Ed Blanche explanation for his dismissal and the elevation of Bagheri, a senior of- ficer in the powerful Islamic Revo- Beirut lutionary Guards Corps (IRGC). The IRGC has been the directing here are signs that divi- force behind Iran’s military inter- sions are intensifying vention in the Syrian quagmire to within the Iranian leader- keep ’s key Arab ally in pow- ship over the Islamic Re- er as part of the Islamic Republic’s public’s increasingly cost- expansionist ambitions to become Tly intervention in the Syrian war. the paramount power from the Cas- Despite the opacity that shrouds pian to the Mediterranean. the Machiavellian machinations A likely explanation for the sack- that pass for politics in Tehran, ing of Firouzabadi, possibly for his events in recent weeks point to sig- sympathies towards Rohani’s ef- nificant strategic shifts within the forts to end Iran’s international hierarchy over Syria and the inter- isolation, lies in the series of events locking confrontation between Iran that have taken place in recent and Saudi Arabia, Iran’s long-time weeks. rival in the Arabian Gulf. It began on May 6th, when Ira- Defence Ministers of Iran Hossein Dehqan (C), Russia Sergei Shoygu (2ndR) and Syria Fahd Jassem This unfolding drama could have nian forces and their allies, Shia mi- al-Freij (L) meet for talks in Tehran on June 9th. sharp repercussions within the Is- litias and , suffered heavy lamic Republic and affect the entire casualties in fighting anti-Assad re- region as it is convulsed by turmoil bels south of the contested city of foreign operations wing, al-Quds Syria issue and that Tehran may be On June 20th, Soleimani, in Syria, and the threat of more conflicts. Aleppo in northern Syria. Force. inclined to be more flexible on ef- fired back, demonstrating that he This was a major setback for There were suggestions that this forts to find a political settlement. will not be shunted aside by Rohani There are signs that the pro-war faction amid growing dramatic move, in effect stripping He talked with Kerry about how the and Zarif and that they should not the divisions within popular dismay at Iran’s mounting control of Iran’s military interven- Syrian war could be ended. seek a negotiated settlement in Syr- the Iranian leadership losses. tion from Soleimani, indicated “The Syrian crisis can only be ia or other reforms. over the costly On June 9th, defence chiefs of Rohani’s administration is leaning resolved politically and a solu- In a rare and hostile public state- Iran, Russia and Syria met in Teh- towards a negotiated end to the tion to the Syrian crisis will not be ment, the shadowy spymaster and intervention in the ran to discuss war strategy and seek conflict, encouraged by the United achieved through military means,” strategist blasted the decision by Syrian war are to eliminate growing differences States. Zarif declared at an Oslo news con- Sunni-ruled Bahrain, a Saudi ally, intensifying. between their forces in Syria and Buttressing that interpretation ference. to revoke the nationality of the is- their allies. of what is a novel Iranian move is Back in Tehran on June 19th, Zarif land kingdom’s top Shia cleric for The latest twist occurred June The following day, it was an- Shamkhani’s call for “a dialogue sacked his deputy minister for Arab leading demands for reform by its 28th, when Iranian Supreme Lead- nounced that Ali Shamkhani, a for- between Syrian parties instead of and African affairs, Hossein Amir- Shia majority. er Ayatollah abruptly mer commander of the IRGC’s naval resuming the war and shedding Abdollahian, a seasoned Arabic- Bahrain’s rulers, he said, “will replaced Iran’s top military com- wing and the head of the Supreme blood” during a recent meeting speaking diplomat reputedly affili- pay the price for their actions and mander, Major-General Hassan Fi- National Security Council who sup- with Russian Foreign Minister Ser- ated with the IRGC, and replaced its result will be… the annihilation rouzabadi, the chief of staff since posedly favours negotiating a set- gei Lavrov. him with Hossein Jaberi Ansari, the of this bloodthirsty regime” and 1989, with his deputy, Major-Gen- tlement, had been appointed the On June 15th, Iranian Foreign Foreign Ministry spokesman and “the beginning of a bloody upris- eral Mohammad Bagheri. senior coordinator for political, Minister Mohammad Javad Zarif, a considered a moderate close to the ing”. There had been no hint of the military and security affairs with close Rohani associate who nego- president. His blood-curdling threats were shake-up and no explanation for Syria and Russia. tiated the July 2015 nuclear agree- There was no official explana- praised by conservative analysts the shuffle was given, although This unprecedented step ap- ment with US Secretary of State tion for that surprise shuffle either, and there is no sign the hardliners health problems may have been a peared to mark a significant shift much to the dismay of which was clearly a bold move will relinquish their expansionist factor. Firouzabadi suffered from in Tehran’s approach to the Syrian the Tehran hardliners, attended against the hardliners, reflecting aims. Ultimately, it will depend on obesity. crisis, which had been conducted a two-day diplomatic meeting in the moderates’ growing concern what Khamenei, who constantly However, the general’s affiliation by the hardliners of the IRGC, and Oslo. for what they see as a headlong plays both sides against the mid- with Iran’s pro-reform president, in particular Major-General Qassem There Zarif let it be known that he rush towards wider conflict in the dle, will do. So far he has said Hassan Rohani, is the most likely Soleimani, commander of its elite has more authority on the thorny region. nothing. Tehran still looking to reap benefits of nuclear deal

Gareth Smyth sought clarification from Washing- militants allegedly linked to Iran. ton only to be told policy is clear: The lack of progress strengthens that companies should exercise due critics of the agreement in Iran as London diligence and clarify ambiguities fundamentalists look for a candi- with Office of Foreign Assets Control date to challenge Iranian President he nuclear agreement be- (OFAC), the relevant section of the Hassan Rohani in the 2017 presiden- tween Iran and US-led US Treasury. tial election. world powers — known as The risks are large. Past US fines In a reflection of government the Joint Comprehensive have included a record $9 billion concern, Iranian media recently Plan of Action (JCPOA) — slapped on BNP Paribas in 2014 in announced a plan to allocate the Thas survived the first of its ten years. part for dealing with Iran. Among equivalent of $4.6 billion to help In terms of foreign direct invest- those ruling out early dealings with small and medium-sized enterprises ment (FDI), Iran jumped from 12th Iran are Switzerland’s UBS (fined in the current Iranian year, which of 14 Middle East countries to third, $100 million in 2005 for supplying ends in March 2017. according to fDi Markets, a Financial Tehran with new US banknotes), Times service. Boeing announced it Credit Suisse Group (fined $536 mil- Boeing announced it received US government clearance lion in 2009 for dealing with Iran), received US for a deal with Tehran that Iranian Germany’s Deutsche Bank, France’s government clearance officials put at $25 billion. Société Générale and Britain’s for a deal with Tehran However, as the world braces for Standard Chartered. that Iranian officials new instability emerging from Brit- Iranian Minister of Transportation The British Foreign Office estimat- put at $25 billion. ain’s decision to leave the European speaks during the CAPA 2016 Iran Aviation Summit in Tehran, last ed that EU-Iran trade could quadru- Union, the Iran nuclear deal, signed January. ple in two years from an annual $8 Local-grown business is not July 14th, 2015, remains under at- billion — calculations that may be re- enough. Attracting foreign invest- tack in Iran, in the and vised after the Brexit vote. However, ment is part of Rohani’s wider plan in many Arab states. It is the United mitments. foreign banks’ access to dollars for global law firm Clyde and Company for economic reform. States where the greatest strain lies. Khamenei insisted Iran would not trade with Iran. suggests that more than half of in- The president wants, for exam- Republican Party presidential hope- be the first to abandon the agree- The United States also sanctions ternational companies interested in ple, to scale back the involvement of ful Donald Trump has called the ment but he warned that “if the around 200 Iranian entities and Iran are holding back. the IRGC and their companies. One Iran deal a “humiliation”, sensing a other side seeks to break it, as some individuals for support of “terror- Iranian officials, such as Khame- test case is the $2.7 billion bullet- boost for his anti-immigrant, anti- candidates in the US presidential ism” or for alleged infringement of nei, have expressed disappointment train project linking Tehran, Qom Muslim populism in the British ref- elections threaten to tear it to piec- human rights. Inevitably, foreign over how the deal is panning out. and , signed with a Chinese erendum result. es, we will set it ablaze”. companies interested in Iran are According to US Secretary of State company and an IRGC outfit in 2010 Iranian Supreme Leader Ayatollah Despite the Boeing deal and the anxious about unwittingly reaching John Kerry, Iran has recouped just but which the government wants Ali Khamenei recently said the pros FDI figures, continuing US sanctions deals with designated entities, es- $3 billion of $100 billion in assets to open in part to Western firms, and cons of the JCPOA had been are deterring companies and would- pecially the Islamic Revolutionary frozen internationally. including Germany’s Siemens and “exaggerated” with its “porousness be investors. The nuclear agree- Guards Corps (IRGC), whose exten- In Washington in April, Valiollah Italy’s Gruppo Ferrovie dello Stato and loopholes” exploited by the ment led in January to the lifting of sive holdings include shares in com- Seif, Iran’s Central Bank governor, Italiane. “enemy”. UN sanctions and many US and EU panies listed on the Tehran Stock said Tehran had received “almost Continuing US sanctions make at- He argued that while Iran had sus- sanctions. Exchange. nothing” in sanctions relief. Mat- tracting such foreign involvement pended uranium enrichment to 20% Tehran’s oil exports are back As European firms — including ters were not helped by April’s US more difficult for Rohani. purity, closed the fortified Fordow nearly to 2012 levels but Washing- Peugeot, Italian steel firm Danieli Supreme Court decision to allow $2 nuclear site and the Arak heavy-wa- ton continues in general to block US and Airbus — have signed multibil- billion of Iran’s frozen assets to be Gareth Smyth was chief ter facility, the Americans had not financial institutions from contact lion-dollar agreements with Iran, awarded to relatives of US service- correspondent for the Financial fulfilled “major parts” of their com- with the Islamic Republic, barring European Finance ministers have men killed in in 1983 by Times in Iran from 2003-07.