Should we be worried about Iran's missiles and nuclear ambitions?

"If people know what is in their interest, they will leave themselves in the hands of an expert surgeon…Naturally, we have to have surgeries in many areas to get the country out of this situation," Pezeshkian said. He emphasized that people must be brought onboard of any reforms and must agree with government actions.

Pezeshkian and other Islamic Republic leaders recognize the political risks of a major economic "surgery," which could cause immediate hardship for citizens before showing benefits. However, Pezeshkian is banking on two factors. First, cooperation from all regime factions: "If we want to do surgery, we must join hands with all politicians and officials," he said, a strategy that helped secure parliamentary approval for his cabinet. Second, he hopes the economic pain will not impact a large portion of the population, emphasizing the need to protect vulnerable groups.

The key question is what kind of "surgery" Pezeshkian envisions to pull the government out of its deepening economic crisis. To answer this, we must first assess the current crises. By mid-2024, the Iranian government faces six major socio-economic challenges, each of which has the potential to trigger security risks.

1. Energy crisis: Iran faces a growing gap between energy production and consumption. Electricity demand exceeds supply by 10,000 megawatts, leading to power outages of up to 8 hours in some areas, including industries. Gasoline consumption is 10 to 12 million liters higher than production, forcing the government to import fuel at a cost of $4 to $8 billion annually. Additionally, natural gas shortages result in winter outages, highlighting the urgent need for energy sector reforms.

2. Government budget deficit: A 50% budget deficit crisis, led to money printing in the past 6 years and over 40% annual inflation.

3. Crisis in the banking system: Chronic issues like the government’s budget deficit, excessive borrowing, high levels of bank debt, sanctions, and misaligned credit policies plague Iran’s banking system. Many banks are burdened with debts that exceed their assets, creating a severe financial imbalance. These systemic problems contribute to instability, making the banking sector a significant weak point in the country’s economy.

4. Environment - Iran faces severe environmental crises, including water resource depletion, soil erosion, and air pollution, which have led to the depopulation of half of the country’s villages. Urban and agricultural land subsidence, critical water shortages in many provinces, and the drying up of lakes and rivers have compounded the problem. These issues have pushed water availability to critical levels, resulting in the collapse of many farming operations and the widespread bankruptcy of farmers, further destabilizing the country’s rural economy.

5. Pension fund crisis: Iran's pension funds are effectively bankrupt. The National Pension Fund currently covers only 4% of retirees' salaries, leaving the government to cover the remaining 96%, placing immense pressure on public finances.

6. Employment crisis: With 24 million employed out of a working-age population of 65 million, the government’s unemployment figures appear unreliable. After accounting for students and conscripts, about 55 million are eligible to work, meaning roughly 55% of the population is outside the labor market, signaling a severe employment gap.

The Pezeshkian administration does not plan to address the third to sixth crises and lacks the capacity to do so. However, to tackle the energy crisis and budget deficit (and, by extension, inflation), Pezeshkian proposes removing energy and wheat subsidies and reallocating funds to the government budget and low-income groups, who now make up around 70% of the population. He believes that by increasing energy costs, consumption will decrease, reducing gasoline imports and bread waste. However, similar efforts by previous administrations failed to yield these results.

Pezeshkian has few options left. The Rouhani and Raisi administrations already pushed taxes to the market's capacity, and any further increases risk igniting widespread strikes.

The only viable option left for the current administration is to raise the prices of bread and energy, particularly gasoline, which constitute a large portion of the subsidies. This move comes despite the deadly consequences of the 2019 gasoline price hike, which led to over 1,500 deaths. However, the likelihood of a similar gasoline price surge as seen in 2019 is very small. Pezeshkian faces difficult choices, as further tax increases would likely provoke strikes, leaving subsidy cuts as the only remaining path.

The authorities may consider several approaches to raising gasoline prices, but regardless of the approach, raising gasoline prices will have widespread economic consequences, affecting the cost of nearly everything and significantly driving up inflation, which poses a substantial challenge for the government.

As seen during Rafsanjani's economic adjustments in the 1990s and Ahmadinejad’s energy subsidy cuts, such "economic surgeries" in the Islamic Republic have historically worsened poverty without addressing structural issues. Institutionalized corruption and lack of transparency remain major obstacles to meaningful reform. These policies have consistently led to widespread public unrest, with protests erupting across dozens of cities in the 1990s and hundreds of cities in the 2010s. The risk of repeating these outcomes remains high if similar measures are pursued without structural changes.

In recent months, US officials, cybersecurity experts, and global tech corporations like Microsoft and Meta have reported Iranian-linked attempts to hack American individuals and organizations with the specific aim to “stoke discord and erode trust” in the US institutions.

On Friday, a senior US intelligence official once again mentioned Iran along with Russia and China as actors attempting to sway the November 2024 presidential election, saying that Tehran has stepped up its involvement compared to previous years.

US intelligence agencies have issued warnings to those targeted by foreign influence campaigns, the American official said.

"Pro-Iran" websites

In a report released on Friday, the Foundation for Defense of Democracies (FDD) named 19 websites as part of a "pro-Iran" network aimed at destabilizing the US political system. The report did not explicitly link the sites to the Iranian government but urged US authorities to shut down the sites with the cooperation of allied countries where the websites may be hosted.

The FDD also recommended further investigations to identify Iranian actors behind the influence campaign, proposing sanctions or legal action as necessary.

Among the websites flagged by the FDD, two are highlighted for their audience reach: Afro Majority and Not Our War. The former, FDD says, targets African American communities, with content hostile to former President Donald Trump and supportive of Vice President Kamala Harris. The latter has focused on US veterans, criticizing both Trump and current President Joe Biden, promoting a narrative that undermines trust in the US, according to FDD.

Examples include a post on Not Our War headlined "The Bitter Choice: Biden vs. Trump and the Illusion of Democracy in the US" and a post on Afro Majority praising Iran’s Supreme Leader Ali Khamenei for his backing of anti-Israel protests.

The scope of Iran's activities extends beyond disinformation. In yet another recent report, Microsoft and Google warned about attempts to breach U.S. presidential campaigns in the lead-up to the November election.

Last month, Meta (formerly Facebood) said it had thwarted attempts by Iranian hackers to compromise the WhatsApp accounts of US officials connected to Joe Biden and Donald Trump. The hackers allegedly posed as technical support representatives from companies like Google and Microsoft to gain unauthorized access. Meta said it had quickly intervened, blocking the accounts before any significant breaches occurred.

Some experts have warned that foreign actors, including Iran, Russia, and China, are increasingly sophisticated in their attempts to influence American voters, even inciting violence against political figures to create chaos and undermine the integrity of the upcoming elections.

The Biden administration has informed its allies that Iran delivered short-range ballistic missiles to Russia, providing Moscow with a significant new military tool amid its ongoing war against Ukraine, the WSJ report said.

This move comes despite Western warnings urging Iran not to supply arms to Russia, and marks a major escalation in Iran’s military support for Russia.

"The missiles have finally been delivered," a US official said. The shipment reportedly includes several hundred short-range ballistic missiles, capable of reaching up to 500 miles. These missiles could help bolster Russia’s intensified missile attacks on Ukrainian cities and infrastructure, which have recently led to the deaths of dozens of civilians.

"We have been warning of the deepening security partnership between Russia and Iran since the outset of Russia's full-scale invasion of Ukraine and are alarmed by these reports," said White House National Security Council spokesperson Sean Savett. "Any transfer of Iranian ballistic missiles to Russia would represent a dramatic escalation in Iran's support for Russia's war of aggression against Ukraine."

Iran had already been providing drones to Russia, which have been used extensively in Ukraine. Additionally, Russia has sourced ammunition and missiles from North Korea for its military campaign.

Such a deepening partnership could further isolate Iran from the West and worsen an economy already in crisis mode, as ballistic missile transfers to Russia would likely be met with additional sanctions on Iran by Western powers, as promised by Ukraine's western allies.

In response to the missile deliveries, European and US officials are preparing to implement new sanctions against Iran, according to the WSJ report.

European leaders had previously warned that they would impose coordinated sanctions if Iran proceeded with the missile transfers.

According to Western officials, sanctions could include banning Iran's flag carrier, Iran Air, from European airports, and targeting companies and individuals involved in the missile shipments, The Wall Street Journal reported.

Russia's access to Iranian ballistic missiles could devastate civilian populations, marking a turning point in the conflict, Farzin Nadimi, a Senior Fellow with the Washington Institute, told Iran International.

He said some of these missiles will have enough range to hit Western Ukraine and strike important targets like railway stations. "It's going to have a really bad effect on civilians."

Iran has long accused the semi-autonomous Kurdish government in northern Iraq of harboring groups, all under the Komala name, which Tehran labels as terrorist organizations. The Iranian Revolutionary Guard Corps (IRGC) has frequently launched attacks on their bases, claiming these groups pose a threat to the security of the Islamic Republic.

In March 2023, the governments of Iran and Iraq signed a ‘border security’ agreement that was, in essence, a plan to curb the activities of Iran’s Kurdish opposition groups in Iraq. The agreement led to partial evacuation of Komala bases in September 2023. The move now seems to have been completed, with the three Kurdish parties, with military wings, leaving their camps in the Zirgwez region near Sulaymaniyah and settling in camps in Suwardash near Dukan.

The new location is in fact closer to the border with Iran but less accessible, according to Komala sources who talked to Iran International on condition of anonymity. “The ability to transport and maintain weapons, especially the semi-heavy and heavy weapons of the Peshmerga forces, has effectively been taken from them,” one member said.

He added that by forcing a move of the Komala inside another country’s territory, Iran's government has sent a “clear message” that it can do “whatever it wants” and neither the Iraqi central government nor the Kurdish Regional Government of Iraq can stop it.

The groups say they oppose the clerical regime in Iran, but many Iranians also view them as separatists, who harbor designs on Iran's Kurdish populated areas in the west.

Iran’s government, through its IRGC Quds Force, enjoys considerable sway over authorities in Iraq, both in Baghdad and Erbil, the Kurdish regional capital. On occasions, however, the relationship has bittered over IRGC attacks on Kurdish groups.

Tehran Erbil security cooperation

Nechirvan Barzani, the President of Iraq's Kurdistan Region, made an unexpected visit to Iran in May, where he met with top leaders, sparking strong criticism from opponents of the Iranian regime.

During his visit, Barzani engaged with key figures of the government, including Supreme Leader Ali Khamenei, heads of executive and legislative bodies, the commander-in-chief of the IRGC, the foreign minister, and the secretary of the Supreme National Security Council.

The timing and nature of Barzani's visit, coming months after the IRGC's missile attack on the Kurdistan Region, raised questions about its motives. The high-profile meetings suggest that the discussions likely focused on mutual security concerns.

In January, the Iraqi government recalled its ambassador from Tehran after an IRGC missile attack on Erbil killed four civilians and injured six others. The attack caused a popular outrage in Iraqi Kurdistan and thousands took to the streets denouncing the IRGC's ‘free hand’ in their region.

The IRGC claimed the target had been an Israeli “spy headquarter” in the Kurdistan region of Iraq, but the Kurdish prime minister Masrour Barzani categorically denied the claims and called the attack a “crime against the Kurdish people.”

This year’s crackdown began in Iran’s Kurdistan province, where at least 17 citizens were arrested in the first week of September, just days ahead of the second anniversary of Mahsa Amini’s death in police custody on September 16, 2022, which sparked the nationwide Woman Life Freedom protests.

In an interview with Iran International regarding the recent wave of arrests around the anniversary, Azadeh Davachi, a researcher, writer, and women's rights activist, remarked:

"One of the defining characteristics of dictatorial regimes is their reliance on escalating violence when they feel threatened, particularly in the face of political movements. What we are witnessing now is the government's fear of the potential resurgence of such movements."

Notably, among those arrested this week were relatives of protesters killed during the 2022 uprising, during which Iranian security forces killed at least 550 protesters, including children, and imprisoned over 20,000 people.

On Tuesday, security forces raided the homes of two families who lost relatives to state violence during the protests.

One of those arrested was 16-year-old Ramyar Abubakri, brother of 21-year-old Zanyar Abubakri, who was fatally shot by state security forces on October 27, 2022, in Mahabad, Kurdistan. According to rights group Hengaw, security forces raided the Abubakri family home around 3 am on Tuesday, arresting Ramyar and assaulting several family members, including his parents.

At the same time, security forces also raided the home of Siavash Soltani, son of 52-year-old Kobra Sheikhe-Saqqa, another victim killed by state forces on the same day in Mahabad. Both Sheikhe-Saqqa and Zanyar Abubakri were shot during protests on October 27, 2022, which followed the funeral of another slain protester, Simko Mowloudi.

Rights group Kurdistan Human Rights reported that Soltani was beaten and arrested without a warrant, and both his and Ramyar Abubakri’s whereabouts remain unknown since their arrest on Tuesday.

Hengaw also reported two further arrests in Mahabad, bringing the total of those detained in this city to 4, and 10 individuals were arrested in the city of Bolbanabad in Kurdistan province’s Dehgolan County, where multiple protestors were killed during the 2022 uprising, and 3 arrested in Oshnavieh in West Azerbaijan province.

Similar waves of arrests were reported last year across the country around the same time as the uprising’s anniversary with tens of arrests reported in Iran’s Azerbaijan region and at least 20 arrests in Kohgiluyeh and Boyer-Ahmad province, Southwestern Iran.

Last year, Human Rights Watch said that Iranian authorities have ramped up their repression of civil society for the first anniversary of Amini’s death, calling on all delegations of UN member states to raise the plight of activists and put it at the center of their engagement.