Supreme Leader Ali Khamenei has told the Revolutionary Guard to loosen its grip on the economy. So said Defense Minister Amir Hatami in and interview with the state-run IRAN newspaper, described by the Associated Press. The AP report notes that Hatami is the first non-IRGC figure to serve as defense minister in nearly 25 years.
Another AP report finds that German Chancellor Angela Merkel is trying to persuade other European allies to adopt new sanctions against Iran as part of an effort to prevent President Trump from terminating the Iran deal. The proposed new sanctions reportedly would address Iran’s missile program and interventions in Yemen and Syria, and Germany is joined in its efforts to some degree by Great Britain and France. Merkel’s initiatives dovetail with a weeklong visit to Europe by U.S. Secretary of State Rex Tillerson which began Sunday. His goal is to “close the gaps” in the nuclear agreement, a U.S. official told journalists.
President Hasan Rouhani has made statements in support of rapprochement with Iraq’s Kurds following strained relations over the latter’s referendum on statehood last year. Iran had backed Iraqi president Al-Abadi in his military offensive to retake Kirkuk and other Kurdish-held areas, and now apparently offers an olive branch to the Kurdish areas from a position of strength. A Kurdistan Regional Government delegation met with Rouhani on Sunday in Tehran. A day earlier, Rouhani had also met with the new Cuban ambassador to Tehran and noted the two governments’ shared revolutionary legacy and dislike of U.S. sanctions. In further Iranian diplomatic news Sunday, Syrian President Bashar al-Assad received the head of Iran’s Strategic Council on Foreign Relations, Kamal Kharazi. Assad said that “victory over terrorism in Syria and Iraq, along with Iran’s resilience in the nuclear issue, foiled the plot devised for the region that sought to fragment its states, violate their sovereignty, and seize control of their independence decision making.”
Amid these statements and political maneuvers, economic news out of Iran indicates that the Islamic Republic will remain vulnerable to popular grievances about its mismanagement of finance and infrastructure. Data from the Institute of International Finance, according to Gulf News, shows that a combination of “poor management and sanctions over the past few years have led to a sharp increase in non-performing loans (NPLs), which reached 13 per cent of total loans in 2017, well above the average of 3 per cent for the GCC banks. The capital adequacy ratio has continued to decline from 8.5 per cent in 2012 to slightly less than 6 per cent in 2017.”
