Iran - The Price Of Rebellion

Although the latest round of sanctions have cut Iranian oil exports by over half (and oil income by two-thirds because of higher expenses and deep discounts needed to attract buyers for illegal Iranian oil), Iran announced that it would not stop enriching uranium for its (officially non-existent)  nuclear weapons program. Iran has cash reserves but it cannot afford to let the general population suffer too much. That suffering is already evident but it could take a year or more before it became really painful. The government is basically a religious dictatorship that seized control in the 1980s and has just barely coped with declining popularity. Eventually the loss of oil income could screw things up enough to trigger a popular rebellion. That could get very nasty, as the government has an army of religious fanatics (the Iranian Revolutionary Guard Corps or IRGC). This is more than just the "royal guard" of the Iranian dictatorship. Originally founded to do the clerics dirty work, and keep an eye on the Iranian armed forces, and population in general, the IRGC has grown to become a state-within-a-state. The IRGC not only has 150,000 armed members but also controls billions of dollars’ worth of businesses inside Iran and runs numerous terrorist operations outside the country. The IRGC, or at least large parts of it, can be depended on to follow orders and slaughter rebellious civilians. The ruling clerics are determined to avoid losing power like the East European communist dictatorships did in 1989. The clerics have made sure most Iranians know this and what the price of rebellion would be.

Meanwhile, a growing number of reform-minded Iranians are fleeing the country. The crackdown that began after huge protests against rigged elections in 2009, continues. About 45,000 Iranians have officially sought political asylum in West since 2009, and many more just fled and kept quiet. This outflow of reform-minded Iranians pleases the government but it’s not enough. There are still a lot of Iranians angry at the corrupt and cruel religious dictatorship they have endured for over two decades.

One of the biggest economic obstacles created by the latest sanctions is the inability of Iran to use U.S. dollars. While Iran has threatened to switch to euros or Chinese yuan, this has not been practical. But Iran has found an alternative currency of sorts: gold. Since the new sanctions kicked in earlier this year, there has been a major shift in global gold sales and shipments. Billions of dollars’ worth of gold is flowing into Iran, especially from Turkey (to pay for natural gas imports). While some nations have received temporary exemptions from the sanctions to buy Iranian oil (until they could line up other suppliers), there have not been any exemptions to dealing with Iran in dollars. It’s more expensive for Iran to take payment in gold (higher fees and transportation costs) but it is working. Alas, the huge Iranian purchases will drive up the price, which will then fall when Iran again gains access to the international banking system.  That access was sharply curtained over the last year, as investigators identified major banks that had been, for years, illegally handling transactions for Iran. Several billions dollars in fines, and the addition of monitors within the accused banks, put a big chill on any further illegal banking activity for Iran.

The government continues in its effort to cut the country off from the Internet, by building an internal Internet just for those in Iran who cannot be trusted with the World Wide Web. That means most Iranians are finding it more and more difficult to reach the international Internet. Recently Iran introduced a heavily censored local version of YouTube. China is helping Iran to censor Iranian use of the Internet.

It’s not just political reformers who are angry. There’s growing discontent among Azeris. A quarter of Iranians are Turks (Azeris) but they are Shia and prominent in the religious leadership (that actually rules Iran). While these Azeri clerics have been enthusiastic supporters (and leaders in) the government, most Azeris are angry at the growing economic decline in the country. At the moment Azeris are particularly upset at a lack of government aid after major earthquakes in the northeast (where most Azeris live) last August. There have been a growing number of anti-government demonstrations, and casualties because of this, along with some dead and wounded. Only about half of Iranians are ethnic (Indo-European) Iranians. The rest are various minorities who often feel like subject peoples of an Iranian empire. For many ethnic Iranians, the empire still exists and it’s a good thing to remind the non-Iranians from time to time.

Relations with Turkey continue to get worse. The NATO decision to send Patriot anti-aircraft batteries Turkey requested has made Iranian leaders very angry. They won’t actually do anything, although military leaders have announced that the presence of the Patriots could cause World War 3. This does not make Turks feel any better about their neighbor. Historically, the two regional superpowers have been evenly matched over the past thousand years, with the Turks having a military edge but not a decisive one. Neither empire was able to conquer the other, but the Turks did drive Iran out of Baghdad, a 500 year old defeat that still rankles in Iran. The fact that many Iranians still believe central and southern Iraq should be part of Iran makes many Iraqis nervous.

Iran gets mixed reviews among Palestinians. More radical Palestinians praise Iran for supplying Hamas with the rockets used in Gaza to fire into Israel. Arab states that provide economic aid to Hamas refuse to supply weapons but Iran does. Iran also tries to convert the largely Sunni Palestinians to Shia Islam and encourages Hamas to impose strict life-style rules on Gazans. Unfortunately for Iran, Sunni Islamic conservatism includes regarding Shia as heretics. To maintain relations with Hamas, Iran has had to back off on trying to convert Palestinians to the Shia form of Islam that dominates Iran. At the same time, Hamas quietly discourages Sunni Islamic radicals from coming down too hard on Gaza Shia. Hamas also remains quiet on what is happening to Palestinians in Syria. There, a half million Palestinians are split over support for the Iran backed Assad dictatorship. For decades the Assads had provided sanctuary for Palestinian refugees and terrorists. But many of these Palestinians backed the rebels and this caused a civil war within the Palestinian community. Iran has said little about this, even when Syria sent aircraft to bomb Palestinian refugee camps. All this merely illustrates that Shia Iran supports Sunni Palestinians only if they will be allies in the Iranian campaign to destroy Israel.

Iran has been hit by another computer virus that destroys data and entire hard drives. A similar attack in April did a lot of damage. Although aimed at government computers, a lot of home PCs were hit as well. These two attacks are thought to be from small groups of Israeli hackers, acting alone to strike back at Iran (which is constantly calling for the destruction of Israel and the killing of all Jews).

December 16, 2012: The government officially called for a cease fire and peace talks in Syria. Unofficially the government now believes the Assads and their Shia government in largely Sunni Syria is doomed. Iran is now seeking ways to limit the damage (to its reputation in the Arab world, especially regarding its Shia militia client Hezbollah in Lebanon). President Mahmoud Ahmadinejad cancelled a visit to Turkey (at the invitation of the Turkish government) because yesterday a senior Iranian general threatened Turkey with war because Turkey had requested and received NATO Patriot anti-aircraft batteries to make sure Syrian warplanes don’t attack Turkish targets. Iranians consider a better armed Turkey as a threat and a provocation. 

December 13, 2012: The U.S. imposed sanctions on seven Iranian companies and five individuals believed involved in Iran’s nuclear weapons program. This puts the companies and individuals under additional restrictions and scrutiny.

December 8, 2012: After a battle with drug smugglers in the southeast, police seized 11 tons of Afghan opium being brought in via Pakistan. Drug addiction is a growing social and economic problem in Iran and nearly all the drugs come from Afghanistan. 

Two Iranian navy ships (a corvette and a supply ship) visited Sudan, the second such visit in five weeks. The growing frequency of these visits is believed to assist Iranian smuggling efforts.

December 7, 2012:  The government complained to Azerbaijan about the Azeris using their newly purchased Israeli Hermes 450 UAV to patrol along the Iranian border.

The Azeris told the Iranians to back off because the UAVs were not straying into Iran.

Iran produces unmanned surface vehicle

Iranian researchers have produced an unmanned surface vehicle (USV) that can conduct a wide range of missions

The USV - codenamed Ariana - was unveiled during a ceremony showcasing the recent research and technological achievements of the Science and Research Branch of the Islamic Azad University in Tehran on Sunday.

Project manager Behrouz Asadi told reporters that Ariana is highly maneuverable, has smart information processing systems, and can transmit images of its surrounding maritime environment.

He added that Ariana can be used to conduct military, surveillance, rescue and environmental protection missions.

Asadi concluded that the unmanned surface vehicle designed and made by Iran can travel as fast as 30 nautical knots (54 kilometers) per hour, and can carry a payload of four kilograms.

SeaFox On The Run

The recent massive naval mine clearing exercise in the mouth of the Persian Gulf (the Straits of Hormuz) demonstrated two things. First, mine clearing ships (which many nations have) and mine clearing helicopters (like the U.S. MH-53) were not as successful as hoped. A lot of the practice mines used were not found. Second, one new system, the SeaFox (a remotely controlled underwater system) was very successful. Ten nations already have SeaFox, and while the United States is a new user, it is hustling to make SeaFox work from different ships and aircraft.  This involves training ship crews to operate SeaFox and equipping ships with the control equipment.

Earlier this year the U.S. Navy ordered several dozen more of the expendable SeaFox UUVs (unmanned underwater vehicles). SeaFox was designed to find and destroy bottom mines (which sit on the seabed) as well as those that float. These UUVs were quickly sent to the Persian Gulf to deal with potential Iranian use of naval mines. The U.S. first used their new Seafox UUVs on some of the eight U.S. Avenger class mine hunting ships stationed in the Persian Gulf.

SeaFox is a small (1.4x.4x.2 meters/55x16x8 inches) battery powered sub that weighs 43 kg (95 pounds) and has a fiber-optic cable connecting it to a surface ship or hovering helicopter. The controller can move the SeaFox close to a suspected mine (using a small sonar unit to assist navigation), then turn on a spotlight for a video cam to examine the object and determine if it is a mine. If it is then SeaFox gets closer and detonates a shaped charge explosive, sending a shaft of hot plasma through the mine destroying it (and the SeaFox).

SeaFox has an endurance of about 100 minutes, a top speed of 10 kilometers an hour, and can dive as deep as 300 meters (930 feet). Operators get to increase their skills and effectiveness using a SeaFox simulator.

Israeli General Says Wargames With U.S. Boost Deterrence

The biggest-ever U.S.-Israeli military exercise, bringing 3,500 American troops to test air- defense systems with 1,000 Israeli solders, should worry Iran and Hamas, an Israeli commander said. 

“When you see two professional armed forces such as the U.S. and Israeli air-defense forces working together and practicing together, of course, it’s a message of deterrence,” Brigadier-General Shachar Shohat said yesterday after surveying anti-missile systems brought to Tel Aviv for the wargames. “I hope the other side also understands it like that.” 

Shohat and U.S. Air Force Lieutenant General Craig Franklin are running the month-long exercise dubbed “Austere Challenge 12” designed to create “stress situations” in Israel’s airspace and off its Mediterranean coast that test the ability of both countries to act against attacks. 

The mock military maneuvers and computer war simulations taking place on a Tel Aviv beach coincided with actual Israeli air raids 70 kilometers (44 miles) to the south on the Gaza Strip in response to Palestinian rocket attacks. Four Gaza residents were killed by the Israeli strikes as Palestinian militia groups launched at least 75 missiles into Israel, wounding three foreign workers, two seriously, and damaging property, according to police. 

Sudanese Accusation 

“The dozens of rockets fired from Gaza into the southern part of our country demonstrate the threat to our citizens,” Shohat said at a press conference with Franklin on the beach with American and Israeli flags fluttering behind them. 

Sudan yesterday accused Israel of attacking its Yarmouk military factory, according to Cairo-based Middle East News Agency, without presenting evidence to support the assertion. Israeli Defense Minister Ehud Barak declined to comment on the pre-dawn explosion that killed two people.

The fact that Israel is fighting Hamas, the Islamist movement that controls Gaza, and preparing for a counterstrike against Iran if Prime Minister Benjamin Netanyahu decides to attack its nuclear facilities is just coincidence, Franklin said. 

‘Notional Scenario’ 

“This is not related to any real world scenario,” he said. “This is an exercise with a notional scenario.” 

Iranian officials say their nuclear program is intended only for civilian purposes and that they will retaliate against any Israeli military action. Hamas is considered a terrorist organization by Israel, the U.S. and the European Union. 

While Iran staged its own wargames last week, General Hossein Salami said an Israeli attack “would be an opportunity to destroy that regime,” according to the Iranian Students News Agency. Hossein said Israel couldn’t sustain a long war and its “threats are only psychological,” ISNA reported Oct. 18. 

President Barack Obama’s administration has openly disagreed with Netanyahu over how to halt Iran’s progress toward the capability to produce an atomic weapon and the timing of any military strikes to stop its work. 

Austere Challenge 12 follows a U.S.-led exercise last month that involved more than 30 nations in the largest mine-clearing demonstration in the Persian Gulf region. Iranian officials have periodically threatened to close the Strait of Hormuz, through which about 20 percent of the world’s oil is shipped daily. 

War Exercises 

Iran’s forces conducted three war exercises earlier this year “meant to show offensive and defensive” missile capabilities, the Pentagon said in a June 29 report to Congress. The Islamic Republic’s military continues to improve the accuracy and killing power of its long- and short-range ballistic missiles, including designing a weapon to target vessels, the Pentagon said. 

Iran continues to develop ballistic missiles with the range to reach regional adversaries, Israel and Eastern Europe, including an extended-range Shahab-3 and a 2,000-kilometer medium-range ballistic missile, according to the report. 

The exercise in Israel includes personnel and a mobile tactical-operations center from the year-old 10th Army Air & Missile Defense Command in Kaiserslautern, Germany, whose members showed off missile launchers and associated trucks and heavy equipment before the generals spoke.

“This is what we use to sort out the threats and friendlies,” Army Captain Mary Thurmond, 29, of Savannah, Georgia, said, standing next to a massive radar truck. “The cooperation between our two forces has been just amazing.”

UK and US in talks for use of bases

Britain’s announces that it is ‘in touch’ with the US over military contingency planning on the potential flashpoints in the Middle East, but insists it doesn’t support any imminent strike on Iran

 

The British Royal Navy’s Astute Class attack submarine, HMS Ambush, is seen in this photo. The UK has at least one nuclear submarine in the Hormuz Strait. 

Britain’s government has said it is involved in military contingency planning with the United States on potential flashpoints in the Middle East, but insisted it does not support any imminent strike on Iran’s nuclear sites.

Prime Minister David Cameron’s office confirmed Oct. 26 that planning is being carried out with the U.S. and other allies, including on the potential use of British bases overseas by U.S. forces.

The confirmation followed a report by The Guardian that the U.S. had asked Britain to use its bases in Greekk Cyprus, and British territory in the Atlantic and Indian Ocean, to build up forces in the Gulf.

Cameron’s office said discussions were taking place, but declined to specify the details. According to The Guardian, the British government has rejected Washington’s request to use military bases in Greek Cyprus, Ascension Island in the Atlantic and Diego Garcia in the Indian Ocean, citing advice from British government lawyers that such an attack would violate international law.

Clear breach of int’l law

The U.S.’ approach is part of contingency planning over the nuclear standoff with Tehran, but British ministers rebuffed the request. They have pointed U.S. officials to legal advice drafted by the attorney general’s office which has been circulated to Downing Street, the Foreign Office and the Defense Ministry.

The West and its allies fear the nuclear enrichment process of Tehran could lead to nuclear weapons development, a charge Iran denies, saying its nuclear ambitions are only for peaceful purposes.
The advice stated that providing assistance to forces that could be involved in a preemptive strike would be a clear breach of international law. “The U.K. would be in breach of international law if it facilitated what amounted to a preemptive strike on Iran,” said a senior British official. “It is explicit.
The government has been using this to push back against the Americans.”

According to the report, Washington has not made a formal request to the British government and that they did not believe acceleration toward conflict was imminent. “But I think the U.S. has been surprised that ministers have been reluctant to provide assurances about this kind of upfront assistance,” said one source.

The British navy has up to 10 ships in the region, including a nuclear-powered submarine and counter-mine vessels which are on permanent duty in Hormuz.

Britain has assumed that it would only become involved once a conflict had already begun and has been reluctant to commit overt support to Washington in the buildup to any military action.

U.S. Navy, Allies Find Less Than Half the Sea Mines Planted in Key Exercise

On board the USS Ponce, the command ship for mine hunting operations in the Persian Gulf, sailors practice using surveillance equipment. Watch this video to see the unmanned aerial vehicle called Scan Eagle land by snagging a cable with its wing. The camera in the aircraft feeds back video to sailors who watch for threatening boats.

 A major international naval exercise last month in and around the Persian Gulf and Arabian Sea, led by the U.S. Navy with more than 30 other nations participating, located fewer than half of the practice mines laid at sea.

This outcome of the highly publicized military drills — not publicly known until now — underscores how difficult it may be for the United States and its partners to detect and incapacitate waterborne explosive devices that Iran has threatened to plant if its nuclear facilities come under attack.

Out of the 29 simulated mines that were dropped in the water, “I don’t think a great many were found,” retired Navy Capt. Robert O’Donnell, a former mine warfare director for his service, told the NewsHour. “It was probably around half or less.”

Navy officials, though, said the drill was constructive and asserted that focusing on the number of mines detected alone would paint an incomplete picture.

“We enjoyed great success,” said Cdr. Jason Salata, the top public affairs officer for the 5th Fleet. “Every platform that was sent to find a shape found a shape. We stand by that.” Salata asserted that “there were no missed mines, each platform that had an opportunity to find the mine did so.”

The drill, dubbed International Mine Countermeasures Exercise 2012 or IMCMEX, brought together countries from all over the world at a time when tensions with Iran have been heating up. Tehran has threatened to close the Strait of Hormuz, one of the world’s most important choke points through which 20 percent of the world’s oil flows.

The surprising mine-detection result came in what one senior Navy official told the NewsHour was “one of the most significant and strategically important exercises of the year.” It was also the largest exercise of its kind ever held in the region.

Being able to find and destroy sea mines is critical to maintaining stable world oil prices and global economic growth.

“The Strait [of Hormuz] remains a vital sea lane of communications to us and our partners,” Defense Secretary Leon Panetta said earlier this year. “We are determined to preserve freedom of transit there in the face of Iranian threats to impose a blockade.”

“I just felt that they should have done better,” said O’Donnell, clearly disappointed with the outcome of this key measure of performance. “That’s the point of the exercise, to do mine-countermine [operations] in an area, and to find the mines.”

Now a consultant, O’Donnell was invited by the Navy to observe the September exercise firsthand as it unfolded.

The Navy declined to provide data on how many practice mines were located during the two-week naval drill but did not dispute that less than half were found. However, a spokesman insisted that the figures do not tell the whole story and that the event was “‘not just about finding” the dummy mines.

“Numbers alone do not tell the story of IMCMEX’s effectiveness and success,” said Lt. Greg Raelson, a media officer with the 5th fleet, stationed in Bahrain. “We operated ships, helicopters, divers, and unmanned undersea vehicles with accuracy and effectiveness, confirming our ability to respond to maritime mine threats in the undersea environment. Because of this exercise, we were able to enhance partnerships and further hone the international community’s ability to ensure the safe and free flow of navigation.”

However, some analysts with extensive experience in evaluating Navy mine exercises say the rate of success in detecting practice mines is critically important.

“I would be surprised if the post-exercise analysis didn’t include some kind of a scoring mechanism of how well did we do against this set” of imitation mines, said Scott Savitz, a senior RAND engineer who, in a prior job, led Navy-contracted teams to analyze counter-mine exercises. The central point of a mine-hunting exercise is “to find them all, because in the real-world scenario you want to minimize the subsequent mine risk,” he said.

“You want to try to ascertain how well you are doing. You need a find a certain number of mines and a certain number of attempts to hunt or sweep them in order to get anything statistically meaningful,” Savitz said. “If we get zero or one or two, it doesn’t tell us much. It’s not granular enough.”

During the exercise, the military’s top commander of U.S. Naval forces in the Middle East stressed two key objectives for the drill: To practice working together with other countries, and to find simulated mines.

“This exercise is about getting the mines of out the water, and making sure people can sail through the Strait of Hormuz,” Vice Adm. John Miller, the commander of the U.S. Navy’s 5th Fleet, told reporters in Bahrain as the exercise was getting under way. “And what it’s really about is the opportunity to operate together in an international coalition and to make sure we can complete all the tasks that need to be completed.”

The top U.S. combatant commander for the region last month said the exercise was intended to realistically simulate possible military scenarios.

“We train as you do the real thing,” said Gen. James Mattis, the commander of U.S. military forces in the Middle East said while onboard a command-and-control vessel, USS Ponce, during the exercise. “You’ve got to train the same way that you operate every day at sea.”

One of the Navy spokesmen asserted last week that the military did not intend to go after all the mock mines laid for the exercise, much as an individual might focus a session at the gym on selected pieces of equipment but skip those that are unnecessary.

“My trainer builds me a workout,” said Salata. “Perhaps my trainer does not want me to work on some of the equipment. Maybe I don’t have enough time to get to all of the equipment. But based on my expectations, and the objectives of the session, I still may have an amazing workout and enjoy great success.”

Likewise, in terms of last month’s exercise, he said, “the number of shapes found vs. the number of shapes laid does not tell a clear story.”

Savitz, the RAND engineer, said a selective approach to testing counter-mine readiness might indeed have been appropriate for last month’s drill.

“If the goal is to do some of the monkey bars and then…we have something else that is in a slightly different environment and we are going to be testing your skills in that,” he said, the exercise approach might have given participating nations “a broad sampling of all of the parts of the decathlon” and “that may make sense.”

Navy spokesmen said that following the exercise, a key measure of achievement would be to see how many countries partake in the next drill.

“So how do we see success in this case? Well, the biggest tell will be the participation interest for next year’s exercise, which is already being planned,” Raelson said.

But others see coalition-building as just one piece of a fruitful military exercise.

Former Navy Lt. Cdr. Stephen Burke, who served aboard ships in the Persian Gulf when it was infested with mines during the U.S. war with Iraq in 1990-1991, said 5th Fleet officials are “putting the spin on it” when they emphasize the 30-nation participation without detailing how well those countries did at finding mines.

When the U.S. Navy is “trying to get people to participate, you don’t get them to participate by telling them that they don’t do very well,” Burke said. “It was a big love-in exercise to get them to keep coming back and to build a coalition.”

Mine-hunting is quite challenging, he emphasized.

The less-than-50-percent success rate in the exercise shows “it’s very difficult to detect shapes on the seabed and discriminate between rocks and other debris from the actual mines you are actually trying to go after,” Burke said. Well aware of the tall order involved, the Navy likely laid “10 shapes in order for the probability of finding at least one of them,” he surmised.

Meantime, U.S. naval forces are trying to build a wide coalition of foreign navies to show resolve in confronting Iran, he said.

“They are trying to get everyone — especially the partner nations that may not have a robust capability — to come away from the exercise feeling good about themselves for having accomplished something positive,” Burke said. “So it’s like seeding a lake for fishing. You put more fish in there than you expect your customers to catch, but you want them to all go away having caught a fish.”

That said, setting an objective of maximizing international partner participation “in and of itself is not bad,” Burke said, given a perceived political need to signal to Iran that the international community is determined to keep the Strait of Hormuz open.

Raelson, the 5th Fleet media officer, emphasized the collaborative military successes involved.

“Each ship, unmanned underwater vehicle and helicopter that was tasked with finding a practice mine in a particular geographic operating area did. The use of shapes enabled participants to use their individual capabilities in their three regional environments while proving interoperability, compatibility and information exchange,” he said. “It was not the intention to utilize the inaugural IMCMEX to validate effectiveness by assessing individual nations’ capabilities and nor would it be appropriate for us to comment too deeply on tactical performance.”

O’Donnell said the exercise appears to have been useful, but the United States and its military partners should look to future counter-mine drills to more fully prepare for real-world threats.

“All in all, I guess that the exercise was a success since so many nations participated and they were able to communicate with each other,” said the retired Navy captain. “Next time, though, I think they should do a better job of finding the drill mines that were there.”

The Mad Mullah Republic of Iran develops plans for deliberate Gulf oil spill

Iran's 'elite' Revolutionary Guards have developed plans to damage an oil tanker in the Gulf to create an environmental disaster, German magazine Spiegel reported on Sunday.

Citing Western intelligence sources, the weekly said the top-secret plan, codenamed "Dirty Water", is aimed at blocking the oil-rich Gulf to shipping and forcing Western countries to become involved in a huge clean-up operation.

Spiegel said the Revolutionary Guards believe this in turn would prompt Western nations to suspend sanctions imposed over Iran's nuclear programme which have started to hit the economy hard this year.

The plan, developed by the head of the Guards, General Mohammad Ali Jafari, and Admiral Ali Fadavi, head of the force's navy division, would also "punish" Arab states around the Gulf for their support of the West and Israel, the report said.

A clean-up operation could only take place with Iranian technical help, requiring a temporary lifting of sanctions, the plan says, according to Spiegel.

Jafari and Fadavi have passed the plan to Iran's supreme leader, Ayatollah Ali Khamenei, who would have the final say on whether to implement it, Spiegel said.

Iran - Panic Is Worse Than It Looks

The UN sanctions have cut government income sharply. This has caused enormous inflation and a sharp increase in unemployment. The government is being openly criticized for heavy spending (over $5 billion so far) to prop up the Assad dictatorship in Syria. Although the new sanctions and the loss of over a million barrels a day of oil exports has caused a lot of commotion inside Iran, it will not have a huge impact on the Iranian economy. Current GDP is about $480 billion a year and if the reduced oil exports continue for the rest of the year, GDP will be down about a percent for the year (versus growth of over five percent without sanctions). Iran has sufficient hard currency reserves to continue essential imports (food and other consumer goods) for 2-3 years. Despite lots of corruption by the ruling clerics and their families (who control or own about half the GDP), the other half of the economy is quite robust and productive. Most Iranians are angry at the corruption and harsh rule of the clerics, but about twenty percent of the population benefits from working for the clerics, and a lot of these supporters have weapons and are willing to kill to keep things as they are. So the majority grumbles and gets by as best they can.

Iranian secret police and intelligence agencies are telling their bosses (the senior clerics that run the country) that illegal labor organizations are organizing protests against the worsening economic conditions. This is happening despite a continuing crackdown on any pro-reform media. Hundreds of pro-reform journalists have been jailed, driven into exile or compelled to shut up over the last three years.

Most foreign airlines are cancelling service to Iran because the rapidly growing inflation there, and being forced to use the local currency, makes it unprofitable. The Iranian is being pressured to allocate scarce and expensive foreign currency to air transport operations otherwise Iran will lose most of its passenger and air freight service. Some Western maritime shipping firms are also halting service to Iran, for the same reasons.

American Internet security experts believe that recent Cyber War attacks against Arab and Western oil companies in the Persian Gulf area were carried out by Iran, or by hackers hired by Iran. This was believed to be part of a retaliation (for the economic sanctions against Iran) campaign. The hacker attacks were low-quality and do not appear to have done much damage.  The U.S. Department of Defense is investigating the attacks and said there would be retaliation.

Deteriorating economic conditions inside Iran make involvement with the illegal drug trade more attractive. In the last few days three border guards were killed by drug smugglers crossing the Pakistan border in the southwest. This drug war is fought out along a 1,700 kilometer border with Afghanistan and Pakistan. Over the last decade the government has spent $700 million to build barriers and sensors along this border, to make it more difficult for the drugs (largely opium, heroin and hashish) to get across. In the past six months some fifty tons of drugs have been seized. This was accompanied by several hundred casualties and even more arrests. This war has been going on for three decades and shows no signs of slowing down.

October 11, 2012: The Iran backed Hezbollah Shia radical militia in southern Lebanon admitted that it was responsible for sending an Iranian UAV into Israel on October 6th.  The Israelis detected the UAV coming in from the sea and after tracking it over Israeli territory for twenty minutes had an F-16 shoot it down when the UAV was over a rural area and headed for Israel's nuclear complex at Dimona.  While some Palestinians claimed the UAV came from Gaza, Israeli officials said this was not the case, leaving Lebanon (and Hezbollah) as the likely source. Hezbollah has been using Iranian UAVs for years. This particular flight was apparently to test the Israeli ability to detect a UAV. Troops were sent out to collect pieces of the downed UAV and examination of this wreckage will make it clear where the UAV came from and what model it was. Israeli radar spotted the UAV over the Mediterranean and tracked it as it reached land near Gaza. The UAV was apparently flying under GPS control and may have been taking and transmitting pictures as it went. There may be more incidents like this, because this sort of thing allows Iranian propagandists to make noise about how Iran is "attacking" Israel. That will probably stop when Israel begins shooting down the UAVs over the Mediterranean.

October 10, 2012: In the capital there were violent clashes in the streets downtown. People were angry at the rapid inflation (currently over 30 percent) and sharp increase in what it cost to buy foreign currency. So far this year, the price (in rials, the Iranian currency) has more than tripled from 11,000 rials per dollar to over 39,000. About half of that increase occurred in the last two weeks or so as a result of the government trying to put restrictions on private money changers. That caused a panic. There has also been growing inflation even for good produced inside Iran. This is caused by the government printing more money to reward its loyalists (about a fifth of the population.) The government doesn't care if its opponents suffer, because it can point to these people and complain that it's all the fault of the sanctions. This worked for Saddam Hussein when Iraq was under similar sanctions in the 1990s. The Shia majority suffered most from the sanctions, which was fine with Saddam as the Shia were his mortal enemies. But the Western media played along and criticized the sanctions for making ordinary Iraqis suffer. Saddam starved and tormented his Shia opponents even when there were no sanctions, but this was not considered newsworthy.

Turkey is accusing Iran of making peace with Iranian Kurdish separatists (PJAK) in return for sanctuary in Iran and a truce with Iranian security forces. PJAK, which has been active since 2004, is supposed to have several thousand armed members. Last year PKK (Turkish Kurd separatists) announced that they would join with PJAK to fight the Iranian government. PJAK has been hammered by Turkish and Iranian forces over the last few years, the result of an agreement between Turkey and Iran to coordinated operations against their Kurdish separatists. There's been no official announcement of ending this deal.

October 8, 2012: The Foreign Ministry contradicted the head of the Revolutionary Guards and denied that any Iranian troops were in Syria or Lebanon. Last month the Revolutionary Guards commander had bragged that members of the Quds Force were operating in Syria. Quds is Iran's international terrorism support organization. The Quds Force supplies weapons to the Afghan and Pakistani Taliban as well as Islamic radicals in Somalia, Iraq and elsewhere. Quds is believed to be advising Syrian forces on how to deal with the rebels, and occasionally helping with raids and interrogations. Iran is also bringing in some badly needed special weapons and equipment. Most of this is coming in by air via Iraq. Syrian rebels are getting some proof of Iranian aid out of the country, but little of this has been made public. What is known is that several hundred military age Iranians were flown out of Syria in the last week. These were said to be Quds men, being withdrawn because of the economic crisis back in Iran.

October 7, 2012: The world's largest manufacture of Internet hardware (U.S. firm Cisco) cut its ties to long-time Chinese partner ZTE (also a major manufacturer of Internet hardware) when it was discovered that ZTE was illegally exporting Cisco equipment to Iran.

October 6, 2012: Iran's secret police (otherwise known as the Intelligence Ministry) opened their own web site (vaja.ir). In part this makes them seem like less of a scary monster (which they are for most people they encounter) and to make it easier for people who want to provide information (on disloyal Iranians or foreign agents) and be rewarded.

Yemen accused Iran of sending cash and other support to Sunni tribal separatists in southern Yemen while continuing long-standing support to rebellious Shia tribes in the north. Yemen has caught ships attempting to smuggle Iranian weapons in.

October 3, 2012: The government announced that slowdowns for Internet service were the result of attacks from unnamed attackers.

October 2, 2012: On September 24th it took 24,000 Iranian rials to buy one dollar on the black market. Today it costs 39,000 rials. The official exchange rate is 12,000 rials, but there are severe restrictions on who can get dollars at that rate. So most people, and businesses, use the illegal money changers, which the government is now cracking down on.

October 1, 2012: The government has restored access to Google gmail email service. The government insisted the shutting down gmail access was an accident. Even government supporters were angry at losing access to gmail. This was cut on September 23rd along with YouTube (also owned by Google). YouTube was cut off for refusing to take down videos Iranian clerics found offensive to Iran or Islam. This was also seen as a prelude to cutting the country off from the Internet and leaving only Iranian web sites functioning. This can work, because the Internet was built to operate no matter how much of it had been shut down (by nuclear war, according to the original specifications half a century ago). Iranians will still be able to use expensive satellite communications, or, near the border, cell phones to access the worldwide Internet. So forbidden news will still get in and be circulated. But the government will sharply limit the ability of Iranians to regularly communicate with people outside the country (especially the millions of Iranians living abroad.) There will still be official worldwide Internet access within Iran, but only with government approval and considerable restrictions.  Such "intranets" are quite common. The U.S. government and many large corporations use them for security reasons. Iran apparently underestimated the difficultly of setting up a national intranet, and were surprised at how many of their own core supporters depended on the existing Internet.