Thursday 21 June 2018

Revolutionary Guard to 'benefit most' from Iran tension with US

Ayatollah Ali Khamenei says economic follow-through after nuclear deal has fallen short. Photo: AP
Ayatollah Ali Khamenei says economic follow-through after nuclear deal has fallen short. Photo: AP

Arisa Hafezi and Jonathan Saul Ankara and London

Iran's elite Islamic Revolutionary Guard Corps (IRGC), a military force with political clout and an industrial empire, stands to benefit from heightened tension between Washington and Tehran, analysts said.

US President Donald Trump broke ranks with other major powers earlier this month by disavowing Iran's compliance with a 2015 multinational nuclear deal, complicating life for foreign investors nervous of possible new US sanctions.

The IRGC, which reports directly to Iran's Supreme Leader Ayatollah Ali Khamenei, began rapidly expanding its commercial interests a decade ago, before US and EU sanctions were imposed on Iran's oil and finance sectors in 2012 over the country's nuclear programme.

It controls businesses ranging from ports management to telecommunications and has made the most of both cooling and warming ties with the West.

When Western oil companies vacated energy projects in Iran after 2012, the Guards took them on; after the penalties were lifted in 2016, the IRGC, through front companies, served as a conduit for foreign business flowing into Iran.

If investors are put off again, the IRGC is ready to step in, said an official from Mr Khamenei's camp.

"We want foreign investors to stay, but if they leave because of [US] pressure, the Guards can easily replace them. There is no better alternative," the official said, declining to be named because he was not authorised to speak to media.

Under sanctions, Iran's clerical rulers rewarded the Guards by showering them with contracts for skirting the restrictions as well as for suppressing dissent at home and helping Tehran's regional allies from Iraq to Lebanon.

The IRGC's lack of technical expertise and concern over the viability of its economic ventures under sanctions meant it later welcomed pragmatist President Hassan Rouhani's deal that eased sanctions in return for curbs on the nuclear programme.

Mr Khamenei, a hardliner who holds ultimate authority on matters of state, guardedly endorsed the nuclear accord but has said Mr Rouhani's economic follow-through has fallen short.

To bypass existing unilateral US sanctions, which bar any business with the Guards and its affiliated firms, many of the IRGC's front companies are not even formally owned by the Guards, but by individuals and firms linked to it.

Mr Rouhani has tried to encourage reluctant major European firms and banks to return to Iran by seeking to curb the Guards' involvement in the economy, which led to the IRGC transferring ownership of some companies to the state.

In recent months, the IRGC, which sees itself as a bulwark against Western influence, has criticised Mr Rouhani for viewing foreign countries as the key to economic growth.

"The IRGC will be the main beneficiary of the tension with Washington ... In order to protect its economic dominance, the IRGC prefers only limited opening to the West," said a Western diplomat who follows Iran closely.

While backing the nuclear deal, Europeans share Washington's concern over Iran's ballistic missile programme and "destabilising" regional behaviour. The IRGC has vowed to accelerate the disputed missile programme.

Many foreign firms remain hesitant to invest in Iran for reasons including lingering unilateral US sanctions imposed over human rights violations and alleged Iranian links to terrorism, and the dominant role of the IRGC in the Middle East's second largest economy.

Among European firms that have announced big deals in Iran since last year are planemaker Airbus, French energy group Total, and Germany's Siemens. Iran needs the equivalent of billions of dollars in investment to revitalise industries including oil and gas and develop sectors held back by a lack of Western financing and economic influence of the IRGC.

Irish Independent

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