Weekly briefing: US-Iran uncertainty
A weekly round-up of relevant IEP data providing insight into the world around us.
Friday, 19 July 2019: US-Iran tensions have been simmering since last year when the US retreated from the landmark multilateral deal managing Iran’s nuclear enrichment programme while easing sanctions there. In the last two months, interactions between the US and Iran have intensified. Just this week, the US said it destroyed an Iranian drone that came within close distance of a US Navy ship in the Strait of Hormuz, stirring the rising tension. Allegations of attacks or surreptitious plots to stoke conflict have come from both sides and are leading to mounting distrust between the two countries that could result in violent conflict. The US Government recently toughened economic sanctions on Iran and deployed more troops to the Middle East, claiming a risk of an Iranian offensive has increased and they are determined to stop the country from acquiring nuclear weapons. Iran denies any plans to develop nuclear weapons. But in retaliation, Iran has begun to enrich uranium above the limit imposed under the 2015 deal, as its economy struggles under the re-imposed sanctions, including restrictions of Iran’s purchase of US currency, trade in gold, sales of oil and petrochemicals.
By the numbers
Iran makes top five countries deteriorating in peace
Iran is among the top five countries to deteriorate in peacefulness, according to the Global Peace Index 2019.
Nicaragua, Burkina Faso, Zimbabwe and Brazil accompany Iran, which fell in peacefulness for the second year in a row, with its score deteriorating by 5.1 per cent.
The Safety and Security, and Ongoing Conflict domains of the Global Peace Index deteriorated by eight and 4.6 per cent respectively, largely attributable to increased internal turmoil in Iran and involvement in external conflicts.
Four indicators on the Safety and Security domain deteriorated over the past year. The greatest deterioration was the likelihood of violent demonstrations, which increased from a score of two to 3.5, reflecting sporadic protests in 2018 in response to inflation, currency depreciation, and corruption.
Political instability has also deteriorated. In 2018, the US withdrew from the 2015 nuclear deal and has subsequently re-imposed sanctions on Iran. The International Monetary Fund has forecast an economic contraction in 2019 as a result. International economic and diplomatic pressures combined with a crackdown on protesters in December of 2018 and January of 2019 have lowered confidence in the current government.
In terms of external conflict, Iran deteriorated most significantly in external conflicts fought due to its continued engagement in the civil wars in Syria. The country is also believed to support fighters in Yemen and Iraq. Its involvement in these proxy wars has resulted in growing tensions with the United States, Saudi Arabia and Israel. These wars have also contributed to an increase in military expenditure, which rose from 3.75 to 4.56 per cent of Iran’s gross domestic product in the past year.