Tag Archives: Central Bank of the Islamic Republic of Iran

Will Hezbollah Attack Israel? Only if…

In the middle of a region experiencing unprecedented change, a question lingers: Will Israel attack Iran?  As a result, a flurry of writings have appeared attempting to answer this pertinent question.  A “yes” comes with a list of consequences of which the most troubling is the threat of an escalating regional conflict.  In the middle of this regional war it is said that the most powerful non-state actor in the Middle East, Lebanon’s Hezbollah, would be a key player.

August 8, 2006 Hezbollah weaponry captured by ...

Conventional wisdom amongst analysts suggests that Hezbollah, acting as an Iranian proxy, will retaliate against Israel.  While certainly a possibility, policy-makers should recognize that today’s Hezbollah is fundamentally different from the one that fought Israel for 34-days during the summer of 2006.  Members can no longer afford to take actions that don’t pass a cost-benefit test.   Recent remarks by Hassan Nasrallah best reflect this altered strategic calculus.  The Secretary General declared that if Israel attacked Iran’s nuclear facilities, Hezbollah’s leadership would have to “sit down, think and decide what to do.”  This seemingly uncharacteristic remark can be attributed to two factors: 1) Hezbollah is now the strongest political actor in the Lebanese government; and 2) both Hezbollah and the state of Lebanon will incur a massive retaliatory military campaign by the Israel Defense Forces (IDF).  Therefore, Hezbollah will only undertake military action against its historic enemy if Israel pursues a policy that harms the organization’s vital geostrategic interests — primarily regime change in Iran.  As long as Hezbollah retains both a political and military wing, they will still require Iran’s ideological, military and financial assistance.  With uncertain days ahead for their other ally, Syrian President Bashar al-Assad’s regime, ties between Iran and Hezbollah will only strengthen.

Although Hezbollah maintains a military wing, they are no longer the 1990s resistance movement whose sole purpose was to fight off an Israeli occupation.  In the last two decades, they have gone through a ‘Lebanonization.’  Essentially, they have chosen to transform themselves into a Lebanese political party by participating in a sectarian parliamentary system.  Last year the party and its allies effectively toppled Lebanon’s coalition government and formed a new one by selecting the next prime minister.  Ironically, Hezbollah’s power play in a democratic system makes them vulnerable to multiple constituencies.  If Hezbollah were to provoke a conflict with Israel that violently consumes Lebanon and its neighbors, Lebanon’s Sunnis would take political — perhaps even violent — action to reassert their dominance in the government.  Other groups, such as Christians, Druzes and maybe even some Shi’as may not react too kindly to Hezbollah starting another war.  Sectarian tensions are already high with the accusations made by the UN-backed Special Tribunal for Lebanon that Hezbollah operatives were behind the 2005 assassination of former Lebanese Prime Minister Rafik Hariri — an immensely popular Sunni leader.  Additionally, Nasrallah’s support for the Syrian regime’s crackdown against a primarily Sunni revolt further agitates sectarian tensions.  Hezbollah is now forced to simultaneously navigate the road between being what has historically been their calling — a “resistance” movement — and what they have evolved into — the most powerful political party in Lebanon.

Since the 2006 Lebanon War, Israel and Hezbollah have largely lived in a peaceful state of mutual deterrence.  This can be attributed to the cliffhanger that defined the end of the last conflict.  In July 2006, Hezbollah’s military wing crossed the Israel-Lebanon border and ambushed an Israeli patrol, taking two hostages for a prisoner exchange.  Unexpectedly, a 34-day war ensued in which Israel responded with a massive bombing campaign and ground incursion.  Their goal was to destroy Hezbollah’s military wing while simultaneously turn the non-Shi’a population of Lebanon against the group.  The results were a Lebanon that temporarily rallied around the resistance movement, the deaths of 1,200 Lebanese (mostly civilians), considerable damage to Lebanon’s infrastructure (more than $3.6 billion) and an outcry from the international community.

The Israelis were unable to decisively defeat Hezbollah, who inflicted heavy casualties on the IDF (121 killed) by successfully using a combination of guerilla and conventional tactics.  They also launched thousands of rockets into northern Israel, killing 44 civilians.  Both sides claim to have won but in reality the conflict ended in a stalemate, albeit with a symbolic victory for Hezbollah who enjoyed increased popularity in the Arab world immediately thereafter.  Still, the cost to the Lebanese state was immense and later resulted in political backlash, specifically from segments of Sunnis, Druze and Christians, all of which questioned Hezbollah’s right to bring such destruction upon their country.  Nasrallah later claimed he would have not ordered the raid if he had known the consequences would be so dire.

Since then, rhetoric has taken the form of threats emanating from both sides on how they will respond to any future military provocation.  Both sides learned vital lessons from their last conflict and have been actively preparing for the next.  Israel appears to be following a refined policy of massive retaliation.  Their military campaign can take one of two forms: a combination of air and ground operations to destroy Hezbollah’s military assets, or a strategy that avoids a ground war by using air and naval forces to bomb Hezbollah’s strongholds and Lebanese infrastructure.   The latter is a form of “punishment” and serves as a deterrent by making sure the very state Hezbollah resides in suffers for their aggression.  Both of these strategies would undoubtedly attract serious international criticism due to inevitable civilian casualties.  But if attacked, Israel would feel compelled to respond using military force in order to maintain its military credibility in the region and protect its civilian population.  Given the unsatisfactory ending of the last conflict and the changing political landscape in the region, Israeli leaders will be more determined than ever to remove the Hezbollah threat.

Hezbollah’s deterrent comes in the form of an estimated 42,000 missiles and rockets, including increasingly sophisticated weapons, such as long-range surface-to-surface missiles and surface-to-air missiles, which have been redeployed deeper into Lebanese territory and can strike any Israeli city.  Publicly, Nasrallah has threatened to use them if deemed necessary, and recently escalated his threats to include a ground invasion of Galilee.  If the IDF were to pursue a ground campaign, Hezbollah would attempt to wear down Israeli forces through a protracted guerilla war and a simultaneous bombing of Israeli cities.  Their intricate tunnel system and anti-tank weapons would also cause the IDF great headache.  If the Israelis focused on a “punishment” strategy, Hezbollah would bomb civilian centers to compel them to stop.  In both scenarios, the IDF would encounter serious difficulties in defeating Hezbollah but would inflict significant damage on the organization.  In the end, neither side wants another conflict for fear of a more violent, destructive and broader war.

But the region is boiling and Israeli leaders seem to be seriously considering  a pre-emptive strike against Iranian nuclear facilities for fear that the country is on course for building a bomb.  Some have even argued that the only real way to remove the nuclear threat is to rid Iran of the current regime.  For Hezbollah, Iran is a vital ally.  Along with an unstable Syria and waning Hamas, the four form the “Axis of Resistance,” intent on challenging the hegemony of Israel, the United States and their allies in the region.

Hezbollah’s nexus with Iran developed in the 1980s when the Islamic Revolutionary Guard trained and assisted Shi’a militants in response to the Israeli invasion of Lebanon.  To date, Iranian support has empowered Hezbollah with state-like capabilities.  For example, financial assistance has helped the organization win the trust and support of Lebanon’s historically downtrodden Shi’a community, as Hezbollah offers social services not provided by the state.  At the core of this relationship is the Iranian revolutionary principle known as Wilyat al-Faqih or ‘guardianship of the jurist’.  Hezbollah’s leaders have always been ideologically loyal to this doctrine prescribed by the Supreme Leader in Tehran.  There has never been, however, any clear indication that Hezbollah receives direct orders from Tehran.  Therefore, the question should not be, will Iran order Hezbollah to attack Israel, but rather will Hezbollah feel the need to?

That need will become clearer as it is increasingly apparent that instability in neighboring Syria could spell the end for Hezbollah’s arms supplier and geostrategic linchpin to Iran.  If Syria’s Alawite (a branch of Shi’ism) regime falls and a Sunni regime takes power in Syria, Hezbollah and Iran will need each other more than ever.  For Iran, Hezbollah would be their only ally and credible counterweight left against Israel in the region.  For Hezbollah, Iran would be their sole ideological ally and supplier of money and weapons. One must wonder how long Hezbollah could sustain itself and its ideology of resistance if the regime in Tehran were to fall.

Will Hezbollah attack Israel?  It is my belief that only if there is a clear and present danger to the survival of the Iranian regime. Striking Iran’s nuclear facilities fails to meet that criterion.

But the Israelis should ask themselves, is that a risk worth taking? Well, that’s another debate.

by Kip Whittington is a Research Associate at the National Defense University’s Near East South Asia Center for Strategic Studies. He holds an MA in International Affairs, with concentrations in Middle East Regional Studies and Defense Policy & Military Affairs, from Texas A&M University’s George H.W. Bush School of Government and Public Service. Please note that the views expressed in this article are those of the author alone and do not represent the official policy or position of the National Defense University, the Department of Defense, or the U.S. government.For Small Wars Journal

Iran cut off from global financial system

BRUSSELS (AP)Iran was largely cut off from global commerce on Thursday, when the company that handles financial transactions said it was severing ties with many Iranian banks — part of an international effort to discourage Tehran from developing nuclear weapons.

The action is meant to enforce European Unionsanctions, as global financial transactions are impossible without using SWIFT, and will go a long way toward isolating Iran financially.


The Society for Worldwide Interbank Financial Telecommunication, or SWIFT, is a banking hub crucial to oil, financial transactions and other trades.

Because of its reach, SWIFT’s decision to cut off some 30 Iranian banks and subsidiaries could hinder not only banking but also the country’s lucrative crude oil industry and possibly hurt Iranian households that depend on remittances from relatives living abroad.

“Disconnecting banks is an extraordinary and unprecedented step for SWIFT,” said Lazaro Campos, chief executive of the company. “It is a direct result of international and multilateral action to intensify financial sanctions against Iran.”

In a statement, the company said the EU decision to impose sanctions “prohibits companies such as SWIFT to continue to provide specialized financial messaging services to EU-sanctioned banks” and “forces SWIFT to take action.”

There was no immediate reaction from the Iranian government or the banks involved. Not all Iranian banks are subject to EU sanctions.

Though Thursday’s move adds no new sanctions, it is intended to maximize the impact of the EU sanctions that have already been approved.

“It’s tightening the noose,” said Ali Ansari, an expert on the Middle East at the London-based Chatham House think tank.

“I think it will just reinforce what’s already been happening.” And that, he said, is increasing isolation and difficulty in conducting trade and commerce.

In a statement, the European Council — comprised of the government leaders of the 27 European Union countries — said it had “developed the application” of its restrictive measures against Iran.

“In this context, the Council agreed that no specialized financial messaging shall be provided to those persons and entities subject to an asset freeze,” the statement said.

In addition to sanctioning various officials and freezing the assets of certain companies, the European Union plans to institute an embargo on the import of Iranian oil in July — an attempt to choke off funding for Iran’s nuclear program.

The EU sanctions are aimed at forcing Iran to demonstrate to the international community that it is not trying to develop nuclear weapons. Iran says that its nuclear program is for peaceful purposes only, but officials in many other countries — including Israel — believe otherwise.

SWIFT and similar services facilitate not only large financial transactions, but small ones as well, raising the question of whether the EU directive could have unintended consequences. Numerous Iranians, including opponents of the current regime, live abroad and many may use these financial transaction services to send small amounts of money to their families back home on a regular basis.

Follow Don Melvin on Twitter at http://twitter.com/Don_Melvin

Khamenei’s Strength Could Be a Vulnerability

At a time when the international community’s attention is focused on Tehran‘s nuclear program, Iranian politicians are more preoccupied by the country’s increasingly dysfunctional politics. Supreme Leader Ali Khamenei appears to undercutting many government institutions, including the presidency, leaving him more directly in charge. An important indicator of how far this process will go is the extent to which parliament confronts President Mahmoud Ahmadinejad.


Majlis To Question Ahmadinejad

In 1981, Supreme Leader Ruhollah Khomeini ordered parliament to dismiss the Islamic Republic‘s first president. Since then, however, the Majlis has not used its authority to even question the president, much less threaten his position.

Recent years have been marked by sharp disagreements between the Majlis and Ahmadinejad that have grown worse over time. Last year, for instance, Ahmadinejad ignored the previously sacrosanct legal deadline for submitting a budget, so the Majlis approved only a provisional budget to cover two months while it debated how to change the full year’s spending. This year, Ahmadinejad submitted the budget even later, infuriating the Majlis. As conservative parliamentarian Nasrollah Kamalian told his colleagues, “We have less than ten days to the New Year and the cabinet is not concerned about its next budget and puts no effort into sending the budget bill. Due to national interests, I cannot mention the reasons for [the president’s] behavior in an on-the-record session.”

After several requests from the Majlis, Ahmadinejad finally agreed to attend a session of parliament at which he will answer questions, though it will not be a formal “interpellation” under the procedures set out in the constitution. Presumably, he acquiesced only under pressure from Khamenei. Scheduled for March 14, the meeting has been postponed several times and may be again, though that date holds advantages for Ahmadinejad because it is the parliament’s last on-the-record session before the Persian New Year. Since no newspapers will be publishing during the two-week New Year holiday, the media will have little chance to bring the meeting and its outcome to public attention.

Once the meeting is held, the Majlis will be limited to ten questions whose content has already been made public. Four of them are economic: Why did the cabinet not implement the law funding the subway in Tehran and other large cities? What, if not economic mismanagement, accounts for the 2011 growth rate being well below the government’s 8 percent target? (Officials claim the rate was 4.5 percent, but the International Monetary Fund reports only 3 percent, even after upward revision.) How did government spend last year’s $150 million allocation for elevating the country’s cultural indicators? Why did the government not implement the subsidy reform provisions to compensate the agricultural and industrial sectors for their increased production costs?

The other six questions are about political disputes: Why did the government refuse to implement the law creating a Ministry of Youth and Sport? When Khamenei reappointed the intelligence minister dismissed by Ahmadinejad, why did the president abstain from appearing at his office or fulfilling any of his duties for eleven days? Why did Ahmadinejad deny that the “Majlis is at the top of all affairs,” as Khomeini once said? Why was Foreign Minister Manoucher Motaki dismissed while he was on a mission in Senegal? Why has the president said that the issue of women’s veils should be tackled through cultural efforts rather than force of law? Why did the president’s chief of staff say that the government’s priority is to propagate an “Iranian school” of Islam?

Although the parliament’s questions are unlikely to have any practical implications, confronting the president in this manner holds symbolic significance that could weaken him. This seems to fit Khamenei’s agenda. Indeed, the Supreme Leader has expressed interest in changing the constitution to replace direct popular election of the president with election by the Majlis. This change is unlikely to take place anytime soon, but it shows Khamenei’s desire to restrain the president’s power.

Majlis Elections

Khamenei managed the recent elections in such a way to make the Majlis more loyal to him and less friendly to Ahmadinejad. Besides a few reformists and pro-Ahmadinejad candidates, the main competition was between those who were anti-Ahmadinejad during his first term (the United Front) and those who became anti-Ahmadinejad during his second term (the Stability Front). The president’s favorite candidates were either disqualified by the Guardian Council or not elected (e.g., his sister Parvin).

The elections gave Khamenei more cause for confidence not only because he managed to prevent reformist and pro-Ahmadinejad factions from gaining a significant number of seats, but also because it was the first incident-free voting since the rigged 2009 presidential election. In his eyes, this fact restored the regime’s damaged democratic legitimacy.

Indeed, Khamenei has masterfully associated elections with regime legitimacy, such that boycotting them is perceived as an act of subversion. Therefore, while many reformists and opposition Green Movement leaders boycotted the voting, former reformist president Muhammad Khatami cast his vote. Khamenei also suggested that international sanctions on Iran aim to deepen the gap between the people and the government and discourage the former from participating in elections. In turn, he has used the reportedly high turnout to argue that the West failed in its goal to provoke antigovernment sentiment.

The Disappearing Expediency Council

Iran’s constitution provides for an Expediency Council to resolve differences between the Majlis and Guardian Council and take whatever actions are needed to help government institutions function effectively. Yet the five-year term of the Expediency Council’s current members has expired, and chairman Akbar Hashemi Rafsanjani has been pushed from the center of Iranian power and will not be reappointed. Both developments have contributed to the council’s gradual marginalization. In a recent interview with Iranian website Day News, Rafsanjani explained how Khamenei has incapacitated the council. He also stated that Ahmadinejad, who is supposed to attend the council’s sessions, has appeared at only a few such meetings in the past seven years. Consequently, the council has not been able to operate properly since 2005.

Khamenei is responsible for selecting the council’s new chairman and members before its current term ends. He likely postponed the appointments until the last days of the Persian year so that the media would not be able to discuss the implications of Rafsanjani’s inevitable removal. The most likely candidate to replace him is former judiciary chief Mahmoud Hashemi Shahroudi. The Supreme Leader has already appointed Shahroudi as head of the Committee for Arbitration and Adjustment of Relations between the Three Government Branches, a body created unconstitutionally by Khamenei. That committee appears to have much the same portfolio as the constitutionally mandated Expediency Council, such as resolving differences between the president and other branches of government. So far, though, it has remained a largely ceremonial body.


Over the past two decades, Khamenei has weakened the Islamic Republic’s political institutions in order to strengthen his own autocratic authority. He believes the country should be run by institutions directly under his control, principally the Islamic Revolutionary Guard Corps, the intelligence agencies, and the judiciary. Yet his self-confidence, along with the dysfunctional state of the parliament, president, and other political institutions, could ultimately make him more vulnerable in a time of crisis, since the public would hold him personally responsible for whatever decisions are made, including those seen as having led to the crisis.

Mehdi Khalaji is a senior fellow at The Washington Institute, focusing on the politics of Iran and Shiite groups in the Middle East. Orginially published as PolicyWatch #1906 by the Washington Institute. Reprinted by permission.