A Spring 2024 World Bank report has pointed out that the Iranian economy is in bad shape. It points out:
1. "In 2023-24, only 73 percent of budgeted revenues are estimated to have been collected, primarily since only 55 percent of the planned oil revenues are estimated to have materialized." (The Iranian financial year is from March 21 to March 20. Other sources say that Iranian oil and gas fields are in terrible shape. They need big investment to upgrade and refurbish them, but there's no investment coming in. Even though Iran ranks among the top countries with hydrocarbon reserves, esp. natural gas, it's importing gas from Russia and Turkmenistan and it's had payment problems with Turkmenistan of late. Oil and gas contribute to nearly 50 percent of Iran's GDP.)
2. "GDP growth is forecast to moderate to an annual average of 2.8 percent during 2024-25 to 2026-27."
3. "The growing concentration of trade with limited trading partners such as China, exposes the economy to fluctuations in these partners’ economic prospects." (Other sources point out that nearyl 90 percent of Iranian oil is bought by China.)
4. World Bank scenario simulations indicate "an expansion of the conflict in the Middle East, that would directly involve Iran, suggest it could lead to a 7 percent GDP contraction with significant impact on fiscal and external balances, even if the shock is limited in scope and restricted to 2024-25".
5. Sources also indicate considerable unrest over economic issues like inflation (now at around 30 percent), frequent unpaid wages in the oil sector, unpaid pensions, which now can't cope with the inflation, unfinished housing projects, etc.. There have been protests across the country from the oil-dominated southwest to central Iran, and even in Tehran where pensioners protested in August outside the oil ministry.
Investment from Russia in 2023 was just $2.76 billion, while direct investment from China was just $131 million. China has promised much but delivered little real investment. Beijing has to balance between Iran and the other GCC states like Saudi Arabia and the UAE where the geo-economic stakes are way bigger. Besides China, the other big trading partners are some of the Central Asian states and the OIC, and the last two can't move the trade earnings needle enough to boost the economy. They're also constrained by US sanctions.
The fact is the Iranian economy is in no shape to withstand a war. But one must also note that an all out war could destabilize the global economy. Oil and gas from Qatar, Oman, Saudi Arabia, the UAE could be severely affected; oil prices, which are declining at the moment, could rise again. Trade through the Gulf of Oman could be hit, unless the US secures it, which it well might to strangle Iran. Far too many balls in the air, right now.
Excerpt-(Obama) Administration officials conceded that Iran would keep supporting its terrorist forces (particularly Hezbollah, with which it continued parking over 150,000 missiles to point at Israel). And the major point of the JCPOA (The Joint Comprehensive Plan of Action), from Tehran’s perspective, was to preserve and advance Iranian weapons programs — very much including ballistic-missile development.
Obama had power to waive sanctions, but he needed Congress’s help in order to cancel them, which is what Iran wanted.
Rather than blocking Obama to the extent they could, congressional Republicans enabled him through Corker’s crafting of legislation that reversed the Constitution’s presumption against international pacts.
The treaty clause prevents the approval of treaties absent supermajority approval — two-thirds — by the Senate. In effect, this means a treaty should be un-ratifiable unless the president firmly establishes that it is in America’s interests.
If Obama had submitted the JCPOA as a treaty, it never would have been approved. Under Corker’s scheme, however, Obama’s JCPOA would be deemed “not disapproved” unless Congress enacted a “resolution of disapproval.” As Republican leaders well knew, such an enactment was impossible because they lacked anything close to the number of votes they’d need to override an Obama veto of such a resolution (if they could even get a vote on such a resolution).
Republicans did not want to meaningfully challenge Obama on the JCPOA. In part, this was due to one of the then-president’s signature strawmen: We were supposedly confronted with a choice of either a nuclear deal, however “imperfect,” or all-out war with Iran. Needless to say, despite decades of hostile relations, we’d never had such a war — as opposed to the low-thrum terrorist war Iran has waged since 1979, and which the JCPOA assiduously avoided addressing — because Iran was, and is, in no position to challenge the U.S. armed forces in that way. But that was Obama’s story, and Republicans did not want to be seen as warmongers." (McCarthy.)
"If there were ever cause to target Iran’s nuclear facilities, this is it. Iran has shown that it might well use a bomb if it’s acquired, and Tehran would certainly use it as deterrent cover for conventional and terrorist attacks on Israel, Sunni Arab states and perhaps the U.S. Iran is closer than ever to a nuclear weapon and won’t stop itself. The question for American and Israeli leaders is: If not now, when?" (WSJ)
As usual, you've done a great job aggregating the perspectives here. Israel continues to be the one country that will do whatever it takes to preserve its people and its sovereignty. Israel's enemies... well, one wishes every democracy could have enemies that incompetent.
Personally, I'm somewhat worried about Israel in the long term, largely because while older generations of Americans have a strong bipartisan support for Israel (e.g. your Fetterman quote) my own generation (27M) leans more toward Palestine. And Israel's foreign policy depends heavily on US aid (not as heavily, thank goodness, as the democracies of Eastern Europe or East Asia do, but still more than is ideal).
That said, I don't think there's a real chance of the present kerfuffle with Iran exploding into a larger war. Unlike in 1914 and 1939, the Great Powers these days have shrinking populations (even Iran's fertility rate has been below replacement for decades) and are separated from each other by buffer states and/or large tracts of sparsely populated land. It's just too hard for Iran to actually harm Israel when their rockets have to fly for a thousand miles or so over countries like Syria and Jordan, and mostly get shot down in the process. What's more, present weapons technology heavily favors the defender. So when Iran launches a hundred rockets at Israel, they'll be lucky to kill one or two Israelies... while Israel's ability to kill Iranians is mainly limited by politics.
Iran must be prevented from realizing it's ambition to build nuclear weapons. A preemptive strike is far less risky then allowing them to have nukes.
A Spring 2024 World Bank report has pointed out that the Iranian economy is in bad shape. It points out:
1. "In 2023-24, only 73 percent of budgeted revenues are estimated to have been collected, primarily since only 55 percent of the planned oil revenues are estimated to have materialized." (The Iranian financial year is from March 21 to March 20. Other sources say that Iranian oil and gas fields are in terrible shape. They need big investment to upgrade and refurbish them, but there's no investment coming in. Even though Iran ranks among the top countries with hydrocarbon reserves, esp. natural gas, it's importing gas from Russia and Turkmenistan and it's had payment problems with Turkmenistan of late. Oil and gas contribute to nearly 50 percent of Iran's GDP.)
2. "GDP growth is forecast to moderate to an annual average of 2.8 percent during 2024-25 to 2026-27."
3. "The growing concentration of trade with limited trading partners such as China, exposes the economy to fluctuations in these partners’ economic prospects." (Other sources point out that nearyl 90 percent of Iranian oil is bought by China.)
4. World Bank scenario simulations indicate "an expansion of the conflict in the Middle East, that would directly involve Iran, suggest it could lead to a 7 percent GDP contraction with significant impact on fiscal and external balances, even if the shock is limited in scope and restricted to 2024-25".
5. Sources also indicate considerable unrest over economic issues like inflation (now at around 30 percent), frequent unpaid wages in the oil sector, unpaid pensions, which now can't cope with the inflation, unfinished housing projects, etc.. There have been protests across the country from the oil-dominated southwest to central Iran, and even in Tehran where pensioners protested in August outside the oil ministry.
Investment from Russia in 2023 was just $2.76 billion, while direct investment from China was just $131 million. China has promised much but delivered little real investment. Beijing has to balance between Iran and the other GCC states like Saudi Arabia and the UAE where the geo-economic stakes are way bigger. Besides China, the other big trading partners are some of the Central Asian states and the OIC, and the last two can't move the trade earnings needle enough to boost the economy. They're also constrained by US sanctions.
The fact is the Iranian economy is in no shape to withstand a war. But one must also note that an all out war could destabilize the global economy. Oil and gas from Qatar, Oman, Saudi Arabia, the UAE could be severely affected; oil prices, which are declining at the moment, could rise again. Trade through the Gulf of Oman could be hit, unless the US secures it, which it well might to strangle Iran. Far too many balls in the air, right now.
Depends who helps them.
Well Claire, knowing me you know my advice to the enemies of the Zionist Entity: Don't come around here because, you know, the Second Amendment..."
Andy McCarthy addresses the developments that formed the basis for the current situation. https://www.nationalreview.com/corner/the-missiles-being-fired-at-israel-got-a-boost-from-the-obama-biden-iran-nuclear-deal-which-congressional-republicans-failed-to-block/
Excerpt-(Obama) Administration officials conceded that Iran would keep supporting its terrorist forces (particularly Hezbollah, with which it continued parking over 150,000 missiles to point at Israel). And the major point of the JCPOA (The Joint Comprehensive Plan of Action), from Tehran’s perspective, was to preserve and advance Iranian weapons programs — very much including ballistic-missile development.
Obama had power to waive sanctions, but he needed Congress’s help in order to cancel them, which is what Iran wanted.
Rather than blocking Obama to the extent they could, congressional Republicans enabled him through Corker’s crafting of legislation that reversed the Constitution’s presumption against international pacts.
The treaty clause prevents the approval of treaties absent supermajority approval — two-thirds — by the Senate. In effect, this means a treaty should be un-ratifiable unless the president firmly establishes that it is in America’s interests.
If Obama had submitted the JCPOA as a treaty, it never would have been approved. Under Corker’s scheme, however, Obama’s JCPOA would be deemed “not disapproved” unless Congress enacted a “resolution of disapproval.” As Republican leaders well knew, such an enactment was impossible because they lacked anything close to the number of votes they’d need to override an Obama veto of such a resolution (if they could even get a vote on such a resolution).
Republicans did not want to meaningfully challenge Obama on the JCPOA. In part, this was due to one of the then-president’s signature strawmen: We were supposedly confronted with a choice of either a nuclear deal, however “imperfect,” or all-out war with Iran. Needless to say, despite decades of hostile relations, we’d never had such a war — as opposed to the low-thrum terrorist war Iran has waged since 1979, and which the JCPOA assiduously avoided addressing — because Iran was, and is, in no position to challenge the U.S. armed forces in that way. But that was Obama’s story, and Republicans did not want to be seen as warmongers." (McCarthy.)
Editorial-The Wall Street Journal. https://www.wsj.com/opinion/iran-missile-attack-israel-benjamin-netanyahu-hezbollah-biden-lloyd-austin-c33889c5?mod=hp_opin_pos_6#cxrecs_s
"Ayatollah Ali Khamenei may be betting that Mr. Biden will shrink again from defending the civilized world from a dangerous regime. Will he be right?"
"If there were ever cause to target Iran’s nuclear facilities, this is it. Iran has shown that it might well use a bomb if it’s acquired, and Tehran would certainly use it as deterrent cover for conventional and terrorist attacks on Israel, Sunni Arab states and perhaps the U.S. Iran is closer than ever to a nuclear weapon and won’t stop itself. The question for American and Israeli leaders is: If not now, when?" (WSJ)
As usual, you've done a great job aggregating the perspectives here. Israel continues to be the one country that will do whatever it takes to preserve its people and its sovereignty. Israel's enemies... well, one wishes every democracy could have enemies that incompetent.
Personally, I'm somewhat worried about Israel in the long term, largely because while older generations of Americans have a strong bipartisan support for Israel (e.g. your Fetterman quote) my own generation (27M) leans more toward Palestine. And Israel's foreign policy depends heavily on US aid (not as heavily, thank goodness, as the democracies of Eastern Europe or East Asia do, but still more than is ideal).
That said, I don't think there's a real chance of the present kerfuffle with Iran exploding into a larger war. Unlike in 1914 and 1939, the Great Powers these days have shrinking populations (even Iran's fertility rate has been below replacement for decades) and are separated from each other by buffer states and/or large tracts of sparsely populated land. It's just too hard for Iran to actually harm Israel when their rockets have to fly for a thousand miles or so over countries like Syria and Jordan, and mostly get shot down in the process. What's more, present weapons technology heavily favors the defender. So when Iran launches a hundred rockets at Israel, they'll be lucky to kill one or two Israelies... while Israel's ability to kill Iranians is mainly limited by politics.
I've written before at my own substack about why I believe we're unlikely to see a third World War emerging from any of the present flashpoints: https://twilightpatriot.substack.com/p/why-im-still-not-worried-about-world
Great column.
One quibble:
"...Biden is taking this threat extremely seriously..."
Do you really think that Biden is capable of taking anything (except for ice cream) seriously?