The next few weeks E.I. will have spotty postings, as I’m working on finishing up a monograph, and Negar Mortazavi, regretfully, has finished her summer position at CSIS.

Very sincerely, Ethan Chorin

IRNA this week quotes a Gulf News’ report that the Iranian national electricity company will sign a financing agreement with the Dubai Islamic Bank (DIB) for the construction of a 1000 MW electrical power station in Shiraz. Such plants typically cost in excess of 140m USD. The deal is interesting not only for the fact that it comes at a time when the West is exerting increasing pressure on Gulf companies not to sign commercial contracts with Iran (see postings below on increasing Gulf-Iran trade); it will presumably also be one of the first substantial “Islamic” financial instruments issued in an Arab country but backed by assets in Iran. After the Revolution, Iran became one of the pioneers in the widespread application of principles of Islamic finance. Local contacts speculate the UAE, Qatar and Kuwait (but particularly UAE) are actively encouraging more commercial ties as a kind of secondary insurance policy against Iranian retaliation, in the event of a U.S.-backed attack on the Islamic Republic.

On July 21st U.S. SecState Condoleezza Rice met in Abu Dhabi with the officials from Iraq, Egypt, Jordan, and the representatives from the 6 GCC countries to discuss regional developments. According to kargozaaran.com, the issue of a possible attack on Iran dominated the discussions. Aboul Gheit, Egyptian foreign minister, emphasized the importance of diplomacy in arriving at a solution to the Iran nuclear issue. He stressed that any military action will lead to greater instability in the region, and will have disastrous effects for the global economy. He added that although it is not desirable to have another nuclear power in the region, preventive steps should be taken, and through multilateral channels. Jordan’s King Abdullah II said he considered an American attack on Iran to be improbable (at least in the next few months), and that an Israeli attack was “illogical”.

According to Tabnak.ir, a not-for-profit organization (no name given) has recently been established in Dubai to promote Iranian Art and culture in the United Arab Emirates. The organization will promote related art and cultural activities to the resident expatriate community, as well as non-Iranians. The organization will sponsor exhibitions, workshops and festivals. A major goal will be to create exchanges of various kinds with local Emirati art institutes. Other elements include a website, through which to provide information on local events and artists, to liaise with local media and to facilitate exchanges with Iranian students and professors. Christie’s auction house held an major auction of Iranian art in Dubai last May.

On a recent visit to Malaysia, President Ahmadinejad told his audience, “I assure you… there won’t be any war in the future.” Iran has repeatedly stated that Israel will not “dare” to attack Iran, and has down played the prospect of war. According to a report by MEMRI, however optimistic Ahmedinejad may be, Iran has been actively gaming war scenarios since 2003. In response to an order by the Supreme Leader, Ayatollah Khamenei, and as part of its Fourth Development Plan, Iran has set up an emergency procedure known as padafand-e gheyr-e amel, or “Passive Defense”.

The plan’s goal is to protect the government’s vital interests and infrastructure in case of a massive attack, or even natural disaster. According to IDMN*, Gholamreza Jalali, head of Iran’s Passive Defensive Council, said, “Our slogan at the Passive Defense Council is Imam Khomeini’s words, ‘we can’, and by following this saying we seek to prove its truth and validity one more time.”

The Passive Defense plan aspires to employ nonmilitary strategies to keep contact with the people, sustain the flow of “vital services” and to prevent major disaffection. According to the Fourth Development Plan’s section 10, article 122, sub-article 11, the government is to subscribe to the “principals of passive defense in planning and implementation of [the country’s] strategic plans”, and also in the “planning and construction of the country’s vital infrastructures.”

In addition, Passive Defense includes evaluating key facilities (ministries, oil installations, nuclear sites, etc.) according to their importance and likelihood of being attacked. The primary players in this plan are the Local Passive Defense Councils and the Basij forces. The plan seeks to work on these parties’ knowledge of the enemy, coordination, crisis management, and security maintenance. For example, one of their major tasks is to secure the government’s essential electronic information, vulnerable to the effects of electromagnetic bombs.

The Passive Defense Council maintains branches in various sections of the government administration: The council’s branch at Iran’s Ministry of Science, Research and Technology held its first conference in July, 2008. According to the ministry, 165 reports and projects were approved to be presented at the conference. Dr. Zarei, Head of the Passive Defensive Council at the Ministry of Science, Research and Technology, said, “80% of this ministry’s responsibility is to educate experts regarding passive defense through workshops, or university programs that grant diplomas and specializations in this field.” He added that they are also responsible for producing informational sources dealing with this type of resistance.

The audacity of certain Iranian officials’ statements in the global arena do not detract from the regime’s existential concerns; quite the contrary, it is a sign of this insecurity. This regime came into being with a revolution, and fears it might crumble in the wake of an upheaval. After all, the Iranian regime may not be as intrepid as it portrays itself to be.

* Iran Disaster Management News

According to Ibtikarnews.com, this past year (understood to be 2007) Iranians invested $760 million in the Emirates, and 20-30% of Emirati trade is done through Iranian mediation. The piece cites the following statistics from Emirati newspaper Al-Bayan: Iranians dominate the cross-gulf seaborne trade.  7,073 Iranian companies operate in the UAE in 31 trade categories, from banking to real estate and oil; and, until the end of 2006 “more than 400,000″ Iranian traders have transferred “more than $300 billion” to the UAE. The CEO of EPX Middle East, an Iranian firm, was quoted as saying “Iran plays an important role in the region and the Persian Gulf…UAE is a perfect example of how a secure business environment attracts investment.”

Asharq Alawsat columnist Amer Taheri writes today (7/11) that competing international agendas and “twisted threads” always bring us “back to square one” with Iran. He warns that Iran is “not like other countries”, and that a stalemate with the U.N. will not only gain Ahmedinejad re-election to the Presidency in 2009, but perhaps expanded levers of influence. The danger, he says, is compounded by the fact that so many senior clerics in the Supreme Leader’s circle are elderly and/or tainted with charges of corruption. Ultimately, Taheri writes, one of two things will happen: Either the world will accustom itself to the idea of a nuclear Iran—and we’ll see what happens next—or Iran, subject to increasing pressure, will decide to change its strategy. Worst case scenario: the “Khameneiites,” many of whom are off pampering themselves on European vacations, find themselves eclipsed by fanatic, Mahdi-chasing “Khomeniites” (partisans of Ayatollah Khomeini), many of whom believe they they can take over the world.

Is the path forward as murky and dire as all that? While many are quick to write off sanctions as ineffective, looked at from the perspective of the long term the record is more encouraging. The case of Libya is interesting, as for years, pundits were pointing to the Jamahiriyya as a case that sanctions don’t work. Only the threat of imminent force, or so the argument went, succeeded in causing a policy volte-face. A number of Libya observers have argued the contrary: Sanctions drove Libya to sue for an ‘arrangement’ as far back as the Clinton years. In a similar way, prolonged economic isolation, compounded by further signs that Iran is facing a bleak future (see reports on Total’s decision to withdraw from Iranian LNG commitments) has got to be creating a sense of foreboding within the ranks of the less ideological “conservatives.”

This week’s news of missiles and machinations doesn’t appear to change things. With regards Iran’s recent missile tests, the Shehab-3 has proven highly unreliable in the past, and Iran appears to have ‘photoshopped’ an additional meteor into the pictures they broadcast. An attack would more likely galvanize the Iranian public firmly behind Ahmedinejad and the Pasdaran, not the opposite. In contrast to twisted threads, the pursuit of broad-based, legal sanctions, in combination with further attempts to reach a comprehensive deal, would seem to offer a reasonable and clear course forward.

An article posted to Jame Jam Online quotes parts of a speech and Q&A held Wednesday by Ayatollah Hashemi Rafsanjani, former President and current Expediency Council head, in the town of Kermanshah, where he met with a group of local civic leaders. When asked about Western actions within Iran, Rafsanjani told his audience that the Western provinces had “proven their loyalty” to the Islamic Revolution (perhaps a partial reference to the liberation of Khoramshahr [different from Kermanshah] from the Iraqis during the Iran-Iraq war, the anniversary of which was May 24?), and exhorted all Iranians to continue the “struggle” against foreign attempts to de-stablilize the country.

Sheikh Khalifa bin Zayed Al-Nahyan says the UAE will cooperate with the possible additional international sanctions against Iran, according to peiknet.com. In an interview with Lebanese newspaper An-Nahar earlier in the week, the President of the UAE and Ruler of Abu Dhabi expressed concern regarding the possible consequences of a nuclear-armed Iran, as well as his strong desire for a near-term solution to the Iranian impasse. Further, he said that if additional international sanctions are imposed on Iran, the UAE will abide by them, as it had done in the case of Iraq. While the contents of discussions between Crown Prince Mohammad bin Zayed and President Bush at Camp David last weekend were not revealed to the press, the UAE’s relationship with Iran had to be on the top of the agenda. [See Chorin’s posting “A Delicate Balance” below].

After attempting to out “Enriched Iranium” solo for several months, I’m thrilled to welcome Miss Negar Mortazavi as a contributor to the blog. Negar, who immigrated to the States from Iran when she was thirteen, is currently a senior at the University of Virginia, where she studies Middle East policy and Foreign Affairs. Most of Negar’s contributions to “E.I” will deal with women’s issues and Iranian media and culture. Negar is insightful beyond her years, and her fluent Farsi and Azeri is certainly a huge asset. Negar’s first posting is below.