Members of Iran’s Islamic Revolutionary Guard Corps march in Tehran. AP
Members of Iran’s Islamic Revolutionary Guard Corps march in Tehran. AP
Members of Iran’s Islamic Revolutionary Guard Corps march in Tehran. AP
Members of Iran’s Islamic Revolutionary Guard Corps march in Tehran. AP

US 'maximum pressure' campaign against Iran faces hurdles


Khaled Yacoub Oweis
  • English
  • Arabic

Rarely has a superpower with its military might massed near the shores of a weaker adversary looked so politically ineffective.

While the US seeks to constrain Iran, its "maximum pressure" policy faces hurdles.

Domestic divisions, sharp differences with Europe and Russia regarding Tehran, Qatar's reluctance to ostracise its neighbour, and general disinterest in Washington's plan for an 'Arab Nato' give Iranian supreme leader Ayatollah Ali Khamenei strategic solace, despite crippling blows to the economy from US sanctions.

Those sanctions are the most outwardly effective of Washington’s multifaceted strategy towards Iran. US officials say they have cut Iran’s oil revenue by tens of billions of dollars, contributing to a plummeting economy.

The Iranian rial was trading on the black market at about 134,000 to the dollar on Sunday, compared with 32,000 at the signing of the Iran nuclear deal in July 2015.

US President Donald Trump said this weekend that Washington would impose further sanctions on Tehran, to add to a series since last May, when the US unilaterally withdrew from the 2015 nuclear deal.

The Trump administration wants to force Iran to negotiate a broader agreement that includes its missile programme, its role in Iraq and in civil wars in Syria and Yemen.

Iranian rial notes being exchanged in Tehran. The official exchange rate for the Iranian rial is 42,000 per US dollar, but on the black market the rate is about 156,000 rials per dollar. AFP
Iranian rial notes being exchanged in Tehran. The official exchange rate for the Iranian rial is 42,000 per US dollar, but on the black market the rate is about 156,000 rials per dollar. AFP

But US officials privately acknowledge that the government in Tehran may survive its maximum pressure, even in a worst-case “North Korea scenario”, in which a police state maintains control over an impoverished population by crushing dissent.

North Korea is also suspected of supplying military hardware to Iran in contravention of an international ban, and backs Iran’s ally Syrian President Bashar Al Assad, who shows little concern about a collapsed economy as long as he controls the armed forces.

Despite grumbling about the lack of economic help from Europe and China, Tehran maintains economic and diplomatic ties with Beijing and European countries opposed to the US scrapping the nuclear deal.

These countries have resisted US efforts to cast Iran as a pariah state, despite Tehran’s suspected involvement in attacks on oil tankers near the Strait of Hormuz, a crucial route for oil to China and Europe.

US officials say Iran was behind attacks on at least six oil tankers in the Gulf of Oman in the past two months, as well as missile and drone attacks on targets in Saudi Arabia, including on an oil pipeline.

Germany, France and the UAE have not joined Washington in directly assigning responsibly to Tehran.

On Thursday, Iran downed a US Global Hawk surveillance drone, increasing the prospect of open conflict between the two states.

Tension has been progressively rising since Tehran suspended two of its commitments under the nuclear deal last month, just days after the anniversary of Washington’s withdrawal.

Visits to Tehran by the German and Japanese foreign ministers have failed to limit escalations.

Iran has taken advantage of criticism of Mr Trump’s “deal of the century” for the Palestine-Israel conflict to portray itself as a champion of the Palestinian cause.

Most Palestinian figures have said they will boycott a US-led economic incentives workshop in Bahrain later this week.

A Russian representative will attend the Bahrain meeting, helping to counter Iranian assertions about its insignificance. But Iran has reached an understanding with Moscow over Syria, Russian commentators say.

Moscow will keep official Iranian forces away from Israel’s border while doing little to stop Israeli strikes on Iranian-backed militias, with Iran apparently not too concerned about casualties among its proxies.

US officials believe Russia is not happy with Iran’s growing power in Syria, although there are no official signs from Moscow about wanting Iran out.

US and Russian national security advisers are meeting in Israel this week to discuss Syria, in one of the highest level encounters relating to the civil war there since Mr Trump took office.

UAE Air Force Desert Falcons fly in formation with US warplanes over an undisclosed location in Southwest Asia May 29, 2019. AP
UAE Air Force Desert Falcons fly in formation with US warplanes over an undisclosed location in Southwest Asia May 29, 2019. AP

US State Department official Brian Hook, who is leading Washington’s diplomatic campaign against Iran, said Russia saw “diminishing value in Iran’s presence in Syria” and that there would be no stability if Iran were allowed to use Syria a “forward deployed missile base” against Israel.

In an interview in Abu Dhabi with The National, Mr Hook expressed dissatisfaction over the reluctance of Russia and other unnamed countries to support the US drive for Iran to "stop providing lethal assistance and funding to proxies around the Middle East".

“It is the right standard that the world needs to hold Iran accountable to,” he said.

Mr Hook said the world could not continue to let Iran get away with what he termed the status quo of an “acceptable level of violence".

But Dennis Ross, a former aide to president Barack Obama, said the Trump administration “seems to have few answers for the Iranian asymmetric responses to our pressure campaign”.

Writing in The Washington Post last week, Mr Ross said the US pursuit of deterrence against Tehran was compromised by the reluctance of European countries to blame Iran for the tanker attacks.

He said this was because they did not trust that Mr Trump would not use their endorsement to launch a war.

Mr Trump has repeatedly said he does not want war. He said he refrained from striking Iran after an American surveillance drone was shot down because it would not have been proportional.

But Mr Ross said European fears of US action could encourage Europe to join in providing international protection for Gulf tanker traffic that would “blunt Iranian sabotage without a war”.

While not excluding the possibility of more attacks that would disrupt the oil markets, Mr Ross said the presence of China in such an effort would have “a chilling effect on Iran”.

But he said it would need Mr Trump to embrace a multilateral approach and halt his trade war with Beijing.

For the immediate future, the status quo of “acceptable violence” seems likely to continue.

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The Melbourne Mercer Global Pension Index

The Melbourne Mercer Global Pension Index

Mazen Abukhater, principal and actuary at global consultancy Mercer, Middle East, says the company’s Melbourne Mercer Global Pension Index - which benchmarks 34 pension schemes across the globe to assess their adequacy, sustainability and integrity - included Saudi Arabia for the first time this year to offer a glimpse into the region.

The index highlighted fundamental issues for all 34 countries, such as a rapid ageing population and a low growth / low interest environment putting pressure on expected returns. It also highlighted the increasing popularity around the world of defined contribution schemes.

“Average life expectancy has been increasing by about three years every 10 years. Someone born in 1947 is expected to live until 85 whereas someone born in 2007 is expected to live to 103,” Mr Abukhater told the Mena Pensions Conference.

“Are our systems equipped to handle these kind of life expectancies in the future? If so many people retire at 60, they are going to be in retirement for 43 years – so we need to adapt our retirement age to our changing life expectancy.”

Saudi Arabia came in the middle of Mercer’s ranking with a score of 58.9. The report said the country's index could be raised by improving the minimum level of support for the poorest aged individuals and increasing the labour force participation rate at older ages as life expectancies rise.

Mr Abukhater said the challenges of an ageing population, increased life expectancy and some individuals relying solely on their government for financial support in their retirement years will put the system under strain.

“To relieve that pressure, governments need to consider whether it is time to switch to a defined contribution scheme so that individuals can supplement their own future with the help of government support,” he said.

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Rating:****