THE FIRST BIANNUAL STRATEGIC REPORT DEC. 2016 CONTENTS » Executive Summary.........................................................................8 » Internal Affairs.............................................................................. 11 » The Presidency of the Republic Institution...................................12 » The Presidential Institution and the Supreme Leader of Revolution.......................................................................12 » The Institution of the Presidency and the Legislative Authority..................................................................26 » The Presidential Institution and its Role in the Conflict between the Legislative and Judicial Authorities.... 28 » The Military Institution.................................................................32 » The Budgets of Revolutionary Guard and the Army..................... 32 » War Production............................................................................ 34 » Drones Development Program.....................................................36 » Rockets Program...........................................................................37 » The Reality of Iranian Military Productions..................................37 » Maneuvers and Training Projects................................................. 38 » Iranian Navy Activities.................................................................. 39 » Trump Promises Iranian Navy a Harsh Response..........................41 » Iranian Ambitions in Building Naval Bases in Syria and Yemen.....42 » Military Cooperation with Foreign Countries...............................43 » Iran and the Syrian War................................................................ 46 » Conclusions...................................................................................48 » The Security File............................................................................51 » Repression of non-Persians...........................................................51 » The Future of Mobilization in non-Persians Areas........................56 » Future Scenarios in the Iranian Regime's Dealings with the non-Persians....................................................................................57 » The Human Rights Situation in Iran...............................................58 » Conclusions................................................................................... 68 » Economic part................................................................................70 » First Axis: Iranian economy indicators and future scenarios.........70 » Positive signs during the last six months and their economic repercussions....................................................................................71 » Two future scenarios..................................................................... 79 » The first scenario...........................................................................79 » The second scenario......................................................................80 » Second Axis: The Iranian banking system exchange rate a year after the nuclear deal and the direction of future progress......................81 » First: The banking system...............................................................82 » Second: The Iranian currency's exchange rate against the US dollar.................................................................................... 83 » Third Axis: Iranian citizens’ standards of living -what comes next?.............................................................88 » First: Future economic conditions and their impact on citizens' living standards.................................................................................88 » Second: The new budget plan and its possible impact on a citizen in the future......................................................................................91 » Conclusion.....................................................................................92 » Arab Affairs..................................................................................101 » First Axis: The Future of GCC-Iranian Relations in a Troubled Region......................................................................101 » First: Determinants of Gulf-Iranian Relations...............................102 » 1. The State Geo-Strategic Determinant......................................102 » 2. The Oil-ECHO Determinant......................................................103 » 3. Sectarian Links and Population Increases................................104 » 4. The US Invasion of Iraq in 2003 and its Impact on the Regional Balance of Power .................................................104 » Second: Gulf-Iranian relations, heading where?.........................106. » First Phase: Before the Iranian Revolution of 1979......................106 » Second Phase: During and After the Iranian Revolution, 1979....107 » Third Phase: After the Fall of Saddam Hussein's Regime in 2003...............................................................................108 » Third: GCC-Iranian relations during the second half of 2016.......112 » 1. Ongoing Saudi Arabia-Iran conflicts.........................................112 » 2- The growing Iranian threats towards Bahrain..........................115 » 3- The escalation in UAE-Iranian differences...............................115 » Fourth: Conclusions of the biannual strategic report period.......116 » Fifth: The Future for Gulf-Iranian relations..................................118 » Second Axis: Iran's Role in the Neighboring Gulf Countries Iraq and Yemen..............................................................................119 » First: Iraq as a springboard for Iran’s expansionist strategy.........120 » 1- Shift in Iran's strategy from integration to empowerment......122 » 2- The Challenges of Iran’s role in Iraq.........................................126 » 3- The future of Iran’s role in Iraq and the expected trends........127 » Second: The future of Iran’s role in the Yemeni crisis..................129 » 1. Yemen’s geostrategic importance for Iran............................... 129 » 2. Iran's strategy in Yemen...........................................................129 » 3. Increasing Iranian support for the Houthis in Yemen.............. 131 » 4. The results of Iranian support for the Houthis.........................134 » 5. Developments in Yemen in favor of legitimacy........................136 » Third Axis: The future of Iran’s role in the Syrian crisis… A rise or fall?..................................................... 138 » First: The axes of Iran blocking for political settlement to the Syrian crisis..........................................................................139 » 1. The Political Axis......................................................................139 » 2. The Military Axis......................................................................140 » Second: The Inconsistency of Iranian-Russian interests in Syria..141 » Third - The Iranian-Russian contentious issues on Syria..............143 » Fourth - Aspects of Russian-Iranian differences inSyria.............. 146 » Fifth - The Iranian escalation boundaries with Turkey on Syria... 147 » Sixth – Absence of US variables in the Syrian crisis..................... 148 » Seventh - The future scenarios of the Iranian role in Syria..........150 » International Affairs.....................................................................159 » The Future of American-Iranian Relations in a Changing World..159 » First: The American-Iranian relations during the Obama Presidency...................................................................160 » Second: The American-Iranian relations timeline during the second half of 2016......................................................161 » Third: The impact of Obama’s doctrine on both the American and Iranian roles in the Midle-East region...............163 » Fourth: Possible scenarios for future US-Iranian relations.......... 165 » EU-Iranian Relations....................................................................166 » European foreign policy between the European Union Council and the European Parliament.................................167 » Limitations of the European Foreign Policytoward Iran.............. 167 » The EU Boosting Trade Relations with Iran and its Strategy toward this Country ........................................... 170 » The EU’s Strategies toward Tehran.............................................. 170 » Opening an EU delegation in Tehran............................................171 » German-Iranian Relations.............................................................173 » Russia-Iranian Relations...............................................................176 » The Syrian Crisis...........................................................................176 » Military Cooperation....................................................................180 » The Future of the Military and Economic Cooperation Between Russia and Iran...........................................184 » Conclusions...................................................................................184 » Closure..........................................................................................185 Executive Summary his is a biannual report that tracks the most important Tdevelopments in Iran during the last six months of 2016 to provide precise details about the Iranian case file on