Global Insight Perspective | |
Significance | According to the Washington Post and the New York Times, the United States is moving to designate Iran’s 125,000 strong Revolutionary Guard Corps—also known as the Pasdaran—as a terrorist organisation, in a move that would significantly ratchet tensions between the two foes. |
Implications | The United States has long considered Iran a state sponsor of terror and is the chief architect of international efforts to slap a new round of sanctions against Iranian officials and companies implicated in the country’s nuclear programme, which includes senior members of the IRGC. This latest move will target the vast business interests of Pasdaran officials. |
Outlook | The move threatens to have adverse implications on the situation in Iraq, where the foreign wing of the Pasdaran, the Quds Force, is blamed for providing logistical support and training to Shi’a militia groups behind attacks against U.S. forces. The move also threatens to disrupt Iran’s oil and gas development further, as the IRGC has extended its interests into this lucrative part of the economy. |
The Pasdaran
The Washington Post and the New York Times, quoting well-sourced U.S. administration officials, report that the United States is moving to designate the hardline Iran Revolutionary Guard Corps (IRGC) as a terrorist organisation, a decision that signals a more hard-line approach in the superpower’s seesawing relations with its arch-enemy. Created as a parallel military and security force protecting the ideological purity of the Islamic Republic, the IRGC has also been allowed to create a parallel economic base in the country, making it less reliant on direct state funding and better able to withstand an eventual change in the political winds resulting from the election of reform-oriented governments.
As the Iranian state took control over greater and greater slices of the country’s economy by collecting the companies and assets left behind by those fleeing the 1979 Islamic revolution and the following eight-year war with Iraq (1980-88), the IRGC prospered by a similar parallel growth. This was complemented by a network-based extension of its influence as former members took off their uniforms due to age and other reasons, and entered either the business community or the state bureaucracy. Combining direct and indirect company ownership across all sectors—with a wide network of influence in the state bureaucratic machine—together with a military and secret police organisation afforded a wide autonomy, has naturally made the IRGC a formidable force in Iranian economics and politics.
The financial and political clout derived from its holdings and extended network has allowed the IRGC to enter the Iranian oil and gas sector as a major financier. While it can be believed that companies tied to the IRGC in one way or another have been involved in the oil- and gas-related supply and contracting sector, the IRGC was, in 2006, awarded the development of Phase 15 and 16 of Iran's giant South Pars gas field. The award, which was withdrawn from Kvaerner, was originally valued at around US$1-2 billion but, with rising development costs, the investment needs might come in at a much higher level.
The IRGC-controlled company, Khatam al-Anbiya, lacks the experience and technological skills to develop such an advanced project as the South Pars Phases 15-16 effectively, indicating that much of its role will be as the main financier of the development, with the hope of importing the necessary technology and skills through international oil and gas services companies. With a U.S. terror classification, that will become virtually impossible, as will most other economic operations of the group if the U.S. authorities succeed in mapping out the organisation's interests and publicising which companies to boycott. The vastness and spread of the IRGC’s interests will likely make all business dealings with Iran suffer, since financial actors will find it safer to withdraw altogether rather then risking finding out about IRGC links too late.
The U.S.-Iran Seesaw
The move to designate the IRGC comes at a time of seesawing relations between Iran and the United States over Iraq. Despite recent meetings between U.S. Ambassador to Iraq Ryan Crocker and his Iranian counterpart focused on Iraq security concerns, the superpower has intensified its military offensive against arms networks originating in Iran that are replenishing Shi’a militia groups behind attacks against U.S. forces. The restraint initially displayed by U.S. Secretary of State Condoleezza Rice has given way to renewed criticism of Iranian influence in Iraq, with the U.S. military accusing the foreign wing of the IGRC, the Quds Force, of using its proxy, Hizbollah, to kidnap and kill five U.S. soldiers earlier this year.
The renewed U.S. criticism of Iran is tied to the concerns of the United States’ Sunni allies over the entrenchment of Shi’a influence in Iraq. Saudi Arabia has recently intensified its criticism of U.S. policies in Iraq, saying that the security and political vacuum currently in place has provided an opening to Iran, with Iraq proving an important springboard in the pursuit of regional ambitions. Saudi Arabia has even hinted that it will offer support to Sunni tribal groups as a counterweight to Shi’a militia groups, prompting a spat with the United States, which chided the kingdom for its “unhelpful” policies in Iraq. Moves to declare the IGRC as a “terrorist group” sends a clear message to Sunni allies that Iranian influence in Iraq will not go unchecked.
The move could also have implications at the UN Security Council (UNSC), where the United States is spearheading efforts to impose a new round of international sanctions over Iran’s nuclear ambitions. By branding the IGRC in this way, hawks in the U.S. administration are displaying their determination to seek other avenues in their bid to prevent the Islamic Republic from furthering its nuclear ambitions. The superpower’s Democrat and Republican politicians sing from the same hymn sheet when it comes to their determination in stopping Iran’s nuclear quest.
Outlook and Implications
From the perspective of Iraq, the decision could, on the flip-side, entrench relations between Iran and Shi’a militia groups, sparking increased attacks against U.S. forces there. At the UNSC, the move could be seen as reinforcing the United States’ unilateralist instincts and could cause divisions on how best to proceed on the Iran nuclear track. The move also threatens to disrupt the Islamic Republic’s oil and gas development further, as the IRGC has extended its interests into this lucrative part of the Iranian economy.