www.rasanah-iiis.org Annual Strategic Report IRAN IN IRAN IN 2018 2018 Annual Strategic Report IRAN IN 2018 www.rasanah-iiis.org IRAN IN 2018 Annual Strategic Report Published by Rasanah, Riyadh, Saudi Arabia. © Copyright 2018, InternationaL Institue for Iranian Studies. www.Rasanah-iiis org Rasanah_iiis [email protected] +966112166696 CONTENTS Executive Summary .......................................................................................................... 6 Internal Affair ....................................................................................................................18 Ideological File .................................................................................................................20 First: The arrest of the cleric Hussein Shirazi and the demonstrations staged by his followers ..............................................................20 Second: Repressing Sufi Dervishes ..............................................................................22 Third: The diminishing popularity of clerics ............................................................24 Fourth: The ruling elite and its concerns regarding the secularization of the seminaries ...........................................................................................................................25 Fifth: Forecasts ..................................................................................................................28 Political File .......................................................................................................................30 First: The Rouhani government’s dilemma: Outside pressures and internal conflicts ....................................................................30 Second: Karroubi and Ahmadinejad’s unprecedented criticisms towards the Iranian regime ........................................................................36 Third: Findings ..................................................................................................................41 Fourth: Future scenarios .................................................................................................42 Military And Security File ..............................................................................................43 First: Iran plans to modernize its military arsenal as its bet on nuclear capabilities fail ..................................................................................................................43 Second: Targeting the IRGC in Ahvaz, repercussions and consequences ........47 Third: Jaish Al-Adl kidnaps 12 iranian soldiers, forcing Tehran to negotiate ..50 Fourth: Findings ................................................................................................................52 Economic File ....................................................................................................................55 First: The real growth of the Iranian economy in 2018 ...........................................56 Second: A rise in inflation rates .....................................................................................66 Third: The general budget for Iran in 2018 ................................................................70 Fourth: Iran’s trade balance ...........................................................................................74 Fifth: How has Iran’s economic performance impacted the people? ..................78 Sixth: The Future of Iran’s Economy Amidst Current Challenges .......................85 Arab Affairs ........................................................................................................................96 Gulf-Iran Relations ...........................................................................................................98 First: influential factors in Gulf-Iran relations ...........................................................98 Second: The interactions of Gulf-Iran relations ......................................................103 Third: Findings ................................................................................................................107 Fourth: Future scenarios ...............................................................................................108 Iraq ......................................................................................................................................111 First: The environment of the parliamentary elections and the Iranian role to develop political gains ................................................................111 Second: the map of partisan alliances in the Iraqi elections ...............................112 Third: the Shiite alliances after the results of the parliamentary elections.....118 Fourth:Forming the Iraqi government, internal challenges, and Iranian interventions .............................................................................................119 Fifth: The position of the new Iraqi government towards Iranian gains in Iraq 122 Sixth: Findings .................................................................................................................124 Seventh: Future Scenarios ............................................................................................125 Yemen ................................................................................................................................127 First: Recent developments in Yemen .......................................................................127 Second: The interactions of the Yemeni crisis ........................................................130 Third: UN efforts to end the crisis ...............................................................................134 Fourth: The future of the Yemeni crisis .....................................................................136 Syria ....................................................................................................................................139 First: Iran’s tools to expand its influence in Syria ..................................................139 Second: Regional and international factors impacting Iranian influence in Syria ..142 Third: Indications of Iran’s strategy for its long-term presence in Syria..........150 Fourth: Findings ..............................................................................................................153 Fifth: Future trends of the Iranian role in Syria .......................................................154 International Affairs ......................................................................................................164 Us-Iran Relation ..............................................................................................................166 First: The US strategy on Iran ......................................................................................166 Second: Iran’s Resistance Strategy and Confronting US Pressure ....................173 Third: Findings ................................................................................................................180 Fourth: There are three scenarios concerning the future of the US strategy on Iran ...180 Europe-Iran Relations ....................................................................................................184 First: The EU position towards the US withdrawal from the JCPOA ..................184 Second: The importance of the Iranian market to European countries ...........185 Third: Iran’s response to European policies ............................................................189 Fourth: Conclusions .......................................................................................................190 Fifth: Future of European-Iranian relations ..............................................................191 Russia-Iran Relations ....................................................................................................195 First: The development of Russia-Iran relations .....................................................195 Second: The impact of the US withdrawal from the nuclear deal on Russia-Iran cooperation ...........................................................196 Third: Russia-Iran cooperation in Syria ....................................................................198 Fourth: The Caspian Sea agreement ..........................................................................199 Fifth: the future of Russian-Iranian relations ...........................................................201 China-Iran Relations ......................................................................................................203 First : Relations Between China and Iran: an Overview ........................................203 Second: Lack of Monetary Transparency in Iran Impacts its Trade with China .......204 Third: Oil and Gas Cooperation Slows Down...........................................................205 Fourth: Prospects for Iran’s Membership in the Shanghai Cooperation Organization (SCO) ..................................................207 Fifth: Prospects of Sino-Iranian Ties ..........................................................................208 Turkey-Iran Relations ....................................................................................................211 First: Overview of Strategic and Economic Relations Between Turkey and Iran ......211 Second: Security Relations Between Turkey and Iran ..........................................212