Iraqi Security Forces Attack MKO Camp, Killing and Injuring Hundreds - UPDATE

UPDATE: Iran's Foreign Minister Ali Akbar Salehi today praised the brutal attack by Iraq’s security forces on Camp Ashraf. The raid “needs to be praised,” he said.

“Under the Iraqi constitution, no terrorist group can use the Iraqi soil as a base to operate against neighboring countries," Salehi added [AP, 9 April].

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Iran’s opposition group Mujahedeen Khalq Organization (MKO) reported today that 31 of its members were killed, and over 300 injured, during an assault by Iraqi security forces on their camp north of Baghdad. The videos released from the raid are reminiscent of the brutalities of Saddam Hossein’s security forces, showing armed soldiers shooting unarmed Iranians trying to flee from the scene. Iraqi officials, again not unlike the days of Saddam, claim that their forces shot the residents in the camp after they provoked them, a narrative rejected by witnesses telling their stories on YouTube videos.

Camp Ashraf is a sprawling settlement near the Iranian border housing some 3,000 Mujahed militants. The Iranian government has been running a long campaign against the MKO, accusing them of being a pro-US terrorist organization. The MKO is infamous for its support of Saddam during the eight-year Iran-Iraq war.

But the MKO consider itself the leading opposition force against the clerical rule in Iran and accuse the Iranian government of brutality against their members and sympathizers, including the execution of hundreds of their supporters throughout the years.

The Iraqi government of Nouri Al-Makiki now appears to do the work of the Iranian government and is determined to expel the group from Iraq or otherwise annihilate them.

The Arab Spring

By Nader Uskowi

Conspiracy theories notwithstanding, there is a real Arab awaking movement that has engulfed the Arab world, creating an Arab Spring that was unimaginable last winter. What’s going on? Yesterday, I posed the questions to couple of old Arab friends who have been blogging seemingly without break in the past couple of months. We were meeting in a beautiful spring evening in an otherwise hot Arab city on the shores of the Persian Gulf. What was discussed seemed so logical that I thought I knew everything already, only realizing that’s what happens when confronted with strong arguments.

Let’s start with the Arab street. Jobs, food and affordable housing, hope for future and a chance to advance; all scarce commodities on the street. Politics follow soon. Freedom of press, freedom of assembly, freedom for political parties, free elections, and freedom from arbitrary arrests, torture and imprisonment; all as scarce as jobs and hope for future. The street feels no one cares, with the business and political elite and their foreign supporters caring almost exclusively for security and stability at the expense of the dignity of a whole generation of youths growing up in a global village increasingly linked to outside world and increasingly aware of the opportunities available to the youths elsewhere.

Add to these the seemingly ever-presence of fundamentalism, sectarian divide, and naked foreign interference in the affairs of the region.

Since coming to power, Syria’s Bashar Assad (and lately Iran’s Ahmadinejad) saw the solution to the malaise in launching economic reforms but keeping political reforms at bay, the so-called Chinese model. The problem is the model is not working; it puts too much emphasis on upholding the vested interests of the powerful, the Alawi in Syria (the clergy in Iran) and their cronies and their security apparatus. Yes, the new middle class enjoying the benefits of the economic reforms has thrown its support to the old guard, but their numbers, even in thousands, is not enough to stop the avalanche of discontent among the youths. After eleven years of economic reforms in Syria, the youths still do not feel being treated as equal stakeholders in society, it still yearns for political freedom, jobs for now, hope for future, and their lost dignity.

Those who still believe that causes of Arab Spring should be found in the foreign policies of the regimes and foreign interference in the region, Syria offers a clear example that those factors, as important as they certainly are, do not constitute the root causes of the rage and anger seen on the street these days. Iraq and Afghanistan also offer good examples: the two countries are occupied by foreign troops, yet there have not yet been any movements there comparable to other parts of the region, although we should expect the wave finding its way to those countries as well. The argument here is cautionary: do not look for foreign policy and foreign interference as the sole, or even the main source of the current discontent in the region.

The regimes in the Middle East, from Egypt to Tunisia, Libya, Yemen, Bahrain, Syria, Iran and soon the rest should have realized by now that a program of sustained economic development together with genuine political reforms, giving the youths their voice, freedom, hopes and dignity, is the only way ahead.

Ahmadinejad Warns of Arab-Iranian & Sunni-Shia Conflict

Iranian President Mahmoud Ahmadinejad on Thursday warned of a possible Iranian-Arab and Sunni-Shia conflict in the region.

"The U.S. and Western countries are trying to unleash an Iranian-Arab and Sunni-Shiite war," Ahmadinejad said.

Ahmadinejad also linked the looming conflict to US attempts to resolve Palestinian-Israeli conflict through creating an independent Palestinian state

"They are trying to prevent the overthrow of the Zionist regime (Israel) by creating differences among the regional peoples," Ahmadinejad said. “They say one Zionist government and one Palestinian government and this slogan is aimed at saving the defeated Zionist government,” he added [IRNA, 7 April].

Although the current US policy of recognizing an independent Palestinian state alongside Israel is rather old, but Ahmadinejad saw it as a new and “very sophisticated plot” to sow discord and portray a different US face among regional countries.

Imports at $65 Billion

In the Iranian calendar year ending 20 March 2011, the volume of imports increased by 16.5% to reach $65 billion. The government reported that the volume of non-oil exports in the same period was at $26 billion.

Majlis to Investigate Delay at Bushehr

Iran’s Majlis (Parliament) has launched an investigation into the delay in the launch of the country’s first nuclear power plant built by the Russians in Bushehr. Mohammad Hassan Ghafourifard, a nuclear expert, will head the investigation committee.

The Atomic Energy Organization of Iran (AEOI) said in January that the Bushehr nuclear power plant was to join the national power grid in mid-February, but it later announced a postponement to the first week of April. There are no announcements by AEOI on the current state of the reactor.

In February, the fuel placed inside the core of reactor was removed after the inspectors found metal shards in the plant’s fuel assembly. The builder, Russia’s Rosatom, had to remove the fuel core for a thorough inspection of the reactor. It was also suspected that the plan’s computer system was infected by Stuxnet virus.

The Bushehr project was started in 1970’s by the former regime. The work was halted after the 1979 revolution, and resumed in 1955 after Russia agreed to take over the project at a cost of $1 billion, with a completion date of 1999. Twelve years later, the reactor has not come online.

A New Persian Gulf

By Nader Uskowi

Recently I wrote a post titled “Saudi Call to Arms.” The subject was Saudi prince Turki Al-Faisal’s call on Gulf Cooperation Council (GCC) member states to transform GCC into an EU-type union, with unified armed forces and its own nuclear weapons. I argued that Prince Turki’s call should be taken seriously, as serious and thoughtful as he has always been. Since Turki’s speech, the GCC has in a dazzlingly rapid pace showcased a newly found willingness to actively intervene in the events affecting the region.

Today, Qatari Mirage and F-16 jets are actively engaged in the Libyan conflict. Qatar has recognized the rebel government and has started importing oil directly from the rebel-held territories. Kuwait is expected soon to likewise recognize the rebels as the legitimate government of Libya. In Bahrain, Saudi troops and UAE security forces have entered Manama to quell people’s movement and to preserve the ruling royal family. In its latest session, the GCC blasted Iran’s “flagrant interference” in the region. Iran, on its part, called GCC’s actions the result of “Western and Zionist” conspiracies.

Suddenly, the GCC has found a new voice and is putting its money where its mouth is. This is a far cry from the six-nation union that preferred to remain behind the scene. A new GCC is creating new dynamics in the Persian Gulf, and is putting everyone, and especially Iran, on notice.

“The (GCC) will no longer be passive observer but active participant in regional events,” said Mishaal al-Gargawi, a leading political commentator in Dubai. “It is putting pressure on Iran by saying, the game has changed and we are here and the balance of power is different now.”

A Kuwaiti commentator, Nasser al-Mutairi, said the GCC member states must move beyond “routine protocol statements” and challenge Iran directly.

The move is full of risks, however. Hostility between the GCC and Iran can turn into an ugly sectarian conflict; something neither side can afford. Iraqi premier Al-Maliki raised the red flag this week by warning about that very possibility. But it is becoming increasingly clear that GCC’s hard line toward Iran, backed by readiness to use force in the region, is the new normal for the Persian Gulf.

Redenomination of Rial: Four Zeros, Not Three

After the announcement on Sunday by Iran minister of economy that the government intends to redenominate the currency by removing three zeros, today the governor of the Central Bank of Iran (CBI) told reporters that the intention is to remove four zeros, and not three, making one rial approximately equal to one dollar. The CBI governor said the legislative framework for redenomination of the currency would be readied within six months. He said removing four zeros from the current unit would eliminate the need for CBI to print increasingly large denomination notes.

The reason given by CBI for the necessity of removing four zeros follow the logic offered by many of our commentators, including our own Amir Taheri, that the removal of zeros is for convenience. People would no longer need to carry large amounts of money with them, and that in practical terms there are already bank cheques in wide use that function as large denomination bills.

The critics point out that such drastic redenomination is usually a step taken after a period of high inflation is ended and there are no expectations for a period of renewed inflation, and Iran does not meet the criteria as the gradual removal of government subsidies are expected to create a long period of high inflation. Besides, the establishment of electronic money transfer system renders large paper bills or cheques unnecessary.

Germany to End Facilities for Iran Oil Payments

Germany’s Spiegel reports today that German Chancellor Angela Merkel is moving to end the Bundesbank’s involvement in India’s oil payments to Iran. As we had reported on Friday, the German central bank had agreed to act as the conduit for the transfer of oil payments from the Reserve Bank of India (RBI) to Hamburg-based Europäisch-Iranische Handelsbank or EIH bank, which is controlled by Iran. If the Bundesbank in fact ends its involvement in the deal, India’s import of Iranian oil valued at over $12 billion annually will be in jeopardy.

Last December, RBI stopped using the Asian Clearing Union to settle India’s payments to Iran for the Union's non-adherence to US and European sanctions against Iran. For the past three months, India was importing Iran’s crude oil on credit. On 3 March, RBI finally resumed its payments through the Bundesbank to Iran's account at EIH bank.

On Tuesday, the German financial newspaper Handelsblat had first reported the possibility that Chancellor Angela Merkel would stop the Bundesbank’s involvement in the deals. Sources cited by Handelsblatt have now told Speigel that the Bundesbank would process payments for oil deliveries that have already taken place, but would not permit further deals in the future.

The end of Budesbank’s involvement would be a serious setback for the Iranian government and the Iranian oil industry, and a major victory for US attempt in strengthening financial sanctions against Iran.

Iran Expands Its Nuclear Emergency Alert System

In the aftermath of the disaster in Japan, the Atomic Energy Organization of Iran (AEOI) announced today that it has increased the number of nuclear Emergency Alert System (EAS) deployed at its nuclear facilities to 50 (from 13) in order to detect and curb radioactivity in case of nuclear mishaps.

AEOI Deputy Director Nasser Rastkhah said in Tehran that the new environmental radiation surveillance stations "detect any change in the environment's gamma rays profusion, which is the best indicator of the occurrence of nuclear accidents or experiments."

Iranian President Mahmoud Ahmadinejad insisted during his press conference in Tehran that the Bushehr nuclear reactor, the country’s first nuclear power generator, will be safe when it starts its operation later this year. Referring to the Japanese disaster, Ahmadinejad said that although Bushehr is situated on the Persian Gulf, but there is no history of tsunami there. He did not mention, however, that the area is prone to earthquakes, two of which shook the region within the past year alone.

Tehran Exchange Continues Its Historic Rise

Tehran Stock Exchange (TSE) continued its historic rise today, with its index closing above the 25,000 mark for the third consecutive day. In the first two weeks of the new Iranian year 1390, the TSE index has risen by 7.4%, with a total market value now at more than $120 billion.

File Photo: TSE, Tehran / IRNA

Removing Zeros Is Not the Solution – Chamber President

The President of Iran’s Chamber of Commerce Mohammad Nahavandian today warned the government that eliminating three zeros from the national currency would not resolve the inflation problem. On Saturday, the minister of economy had announced that Iran would soon redenominate its currency by eliminating three zeros from its unit. At present, each dollar equals more than 10,000 rials. After redenomination, each dollar would become 10 rials (or one touman as the local currency is popularly referred to.)

“Tackling economic problems requires an ability to distinguish between the superficial and the real. The number of zeros is not our real problem. If by removing the zeros we could fight the inflation, then the solution was easy. We need to fight the root causes of inflation, not the zeros,” Nahavandian said.

“The economic reconstruction requires the expansion of real market competition, elimination of all subsidies, and a move from (the current) hand-out economy to a production economy which creates real jobs,” Nahavanian added [Donya-e Eqtesad, 5 April].

Tribute to all Iranian war veterans (1980-1988)

Please click here to visit a new Facebook page in tribute to 320,000 fallen Iranians plus over 1 Million wounded in the Iran-Iraq war of 1980-1988.

The Archaemenid inscription and Persian translation in the photo: “May God save this land from its enemies, from draught, and from lies.” – Darius the Great, King of Persia (550-486 BC).

PJAK Attacks on Border Posts

Brig. Gen. Hossein Zolfaghari at today's press conference in Tehran

The commander of the Iranian border security force, Brig. Gen. Hossein Zolfaghari, told reporters today in Tehran that in the past 48 hours, the Kurdish rebel group PJAK has staged four separate attacks on border security posts in northwestern Iran, near the Turkish border, killing an NCO and three soldiers, with three other soldiers injured. The PJAK forces retreated to their bases in Iraqi and Turkish Kurdistan after the attacks.

Photo: Mehr News Agency

Dutch Frigate Liberates Iranian Vessel

The HNLMS Tromp (F 803)

Radio Netherlands reported today that on Saturday a Dutch De Zeven Provincien class frigate (FFGHM), the HNLMS Tromp (F 803), took action to liberate an Iranian fishing vessel which had been hijacked by Somali pirates. The Dutch marines apprehended six pirates aboard and two pirates were killed in exchange of fire with the marines. The Dutch ministry of defense reports that shortly after the liberation of the Iranian vessel, a hijacked merchant vessel approached the frigate, apparently with the intention of re-hijacking the Iranian dhow, but it turned back when the frigate fired several warning shots.

Meanwhile, the Iranian Navy is reporting that its own warships today foiled an attempted hijacking by Somali pirates of an Iranian merchant vessel, the Iran Faraz (IMO 9283758) tanker off the Gulf of Aden.

Iran Faraz tanker (IMO 9283758)

File Photos: U.S. Navy and and Meshkov@sana.od.ua at vesseltracker.com

(Mark Pyruz contributed to this post.)

Inflation Rate Hits 12.4%

The Central Bank of Iran today reported that the inflation rate for the Iranian calendar year 1389, ending 20 March 2011, has hit 12.4%. The Iranian economy registered a low inflation rate of 8.8% last summer, but since the start of the subsidy reforms six months ago, the inflation has been on the rise, now hitting 12.4%. With continued removal of government subsidies and the monthly cash payouts to the families, the inflation rate is expected its climb during the current calendar year of 1390.

Iran Revolution Has Given Rise to Current Movements in Middle East - Khamenei

Iran’s Supreme Leader Ayatollah Ali Khamenei today said in Tehran that the current movements in the Middle Eastern countries have their origins partly in the Islamic revolution in Iran and the successes of the Iranian government. He also predicted, without going into any details, that further changes await the Middle East region.

“The auspicious movement which has begun in the region today is partly the results of the Iranian nation's resistance, and more developments will take place in the region in future.

"Almost all analysts in the world acknowledge that the current movement in the Middle East region and North Africa has stemmed from the Iranian nation's uprising," Khamenei said [IRNA, 3 April].

By the latter, it is assumed that Ayatollah Khamenei was referring to the 1979 Islamic revolution and not the more recent movement in 2009. But he did not address the question why it took 32 years for the Iranian uprising to usher in the Arab Spring. And if the supreme leader believes the current movement in Syria has also stemmed from the Islamic revolution.

Alexander Wilner fails to accurately 'see' Iranian views

Another CSIS study lacking in empathetic perspective

By Mark Pyruz

CSIS has recently published a new monograph by Alexander Wilner titled U.S. and Iranian Strategic Competition: Iranian Views of How Iran's Asymmetric Warfare Developments Affect Competition with the US and the Gulf, Sept. 2010 - Feb. 2011 Much of what Mr. Wilner bases his study on pertains to Western press clippings and incidental quotes of Iranian military leaders taken piecemeal or not in appropriate context; that is to say without a more accurate rendering of empathetic perspective for Iran's very real defense requirements.

First of all, the common denominator of conflict in Iran's neighborhood is not Iran itself; rather it is the US and its allies in the Persian Gulf. For example, those are not Iranian military troops that invaded and occupied neighboring Iraq and Afghanistan; rather they are American. So too, in Bahrain it is not the Iranian military that has invaded and physically intervened in the neighboring island family-run kingdom; rather it is Saudi Arabia. And yet Wilner accuses Iran of "meddling."

Mr. Wilner appears to believe that an asymmetric approach to defense is inherently a negative reaction predicated entirely upon weakness. He seems to believe that all nations are like the U.S.: given to the opportunity of taking such extreme measures of financial borrowing from external sources to purchase ever more superfluous and fantastically expensive weapons systems, in order to project itself globally through self-aggrandizing applications of hard power, wherever and whenever the caprices of its leadership should lend itself toward. That, or be a client state such as Israel, which relies on a more localized rendering of this hard policy lust based upon the same fantastic debt heaped upon current and future generations of ordinary American taxpayers, More sensible countries do not engage in such extravagant pursuits. And some, such as the Islamic Republic of Iran, rely upon the potential of soft power as well as the far more frugal deterrent potential of asymmetric warfare developments.

Personally, it is always with a sense of wonder that I view so many of these works by Western analysts, incapable as they are of actual empathy for the “threat” studies they are attempting to construct.

Oil Prices Rising

The continued tensions in the Middle East pushed the prices of crude oil higher. The Brent crude future passed $118 mark. Iranian Heavy exported to the West is priced slightly lower than Brent and at current prices it would bring Iran more than $110/barrel. The oil exported to the East is pegged to the Oman/Dubai marker, which is also rising as fast.

At the current pace, the value of Iran’s oil exports in the new Iranian calendar year that began two weeks ago could near $90 billion. The country is in the midst of a massive and ambitious subsidy reform program and such dramatic rise in oil revenues would make it that much easier for the program to succeed, including the ability of the government to continue its monthly cash payments to Iranian families to cope with the rising prices resulting from the removal of government subsidies.

Violent Protests in Afghanistan in Reaction to Quran Burning

In reaction to reports of the burning of the Holy Quran in a Florida church, violent demonstrations and disturbances have occurred throughout Afghanistan in the past 24 hours.

Today, in the southern city of Kandahar a huge demonstration turned into a riot, with crowds burning cars and shops. Tolo TV reported that nine people have been killed and 76 injured.

In Kabul, three suicide bombers tried to enter a US military camp, started shooting and detonated their vests, injuring three Afghan soldiers.

Yesterday, angry demonstrators attacked the UN compound in Mazaar-e Sharif, killing three UN European employee and four security guards. There were also angry street demonstrations in Kabul and Herat on Friday.

Iran to Revaluate Its Currency

Iran’s Minister of Economy and Finance Shamsodin Hosseini announced today in Tehran that Iran will soon redenominate its currency by eliminating three zeros from its current unit. At present, 10,000 Iranian rials equals one US dollar. With redenomination, 10 new rials (or one touman as the currency is popularly known) would equal one dollar. Since the revolution, the Iranian rial has dramatically lost its value against dollar, from 70 rials to a dollar then to over 10,000 rials to a dollar now.

Controversy Over India Oil Payments to Iran Continues

EIH Bank Headquarters in Hamburg, Germany

The controversy continues over how India would pay Iran for the oil it imports, estimated to be more than $12 billion a year. Last December, the Reserve Bank of India (RBI) stopped using the Asian Clearing Union to settle India’s payments to Iran for the Union's non-adherence to US and European sanctions against the country.

In February, RBI informed German authorities that it intends to conduct Iranian oil financial transactions via the Bundesbank, the German central bank. On 3 March, RBI made its first payment of $2 billion to Hamburg-based bank Europäisch-Iranische Handelsbank or EIH (“European-Iranian Trade Bank”) via the Bundesbank and has since continued settling its overdue payments to Iran using the same channel.

The US considers EIH as one of Iran’s few remaining access points to the European financial system, and has raised concerns that EIH has facilitated a tremendous volume of transactions for Iranian banks previously blacklisted for involvement in the country’s nuclear and missile program. The US Treasury has been pressing the German authorities to add EIH to its sanctions list.

“Treasury is concerned about recent reports that the German government authorized the use of EIH as a conduit for India’s oil payments to Iran. Treasury will continue to engage with both German and Indian authorities about this situation, and will continue to work with all our allies to isolate EIH,” said a US Treasury official on Thursday [The New York Times, 31 March].

Germany has so far resisted the inclusion of the EIH on the sanctions list, citing lack of clear evidence implicating EIH’s involvement in transactions banned by the UN and EU sanctions.

The critics of the German government point to the fact that last year the German volume of trade with Iran amounted to over $5 billion, and German businesses which are still active in Iran use the EIH to process their financial transactions, hence the German reluctance to mover against EIH.

The critics of the US Treasury point out that the closure of EIH by the German authorities would in effect impose an embargo on Iran’s export of crude oil to India, even though the current UN, US and EU sanctions do not cover the purchase of crude oil from Iran.

Photo: Reuters