World Savvy Monitor

Like any country, Iran uses a combination of direct and indirect methods in pursuing and safeguarding its interests regionally and internationally.

Direct Foreign Policy Tools

Military

Due in part to its history of foreign invasion, Iran maintains a strong military.

• The Islamic Republic spends an estimated 2.5% of GDP on its military (compared to the US 4%) and ranks 67 out of 173 countries on this measure.  The Iranian armed services are estimated to be 500,000 strong, including elite Revolutionary Guard units.  Many are highly trained and battle-tested from the Iran-Iraq War of the 1980s.  Another one million reserves are thought to be available for quick deployment.  

• Iran has traditionally been active in the global arms trade as a purchaser of US-made weapons during the time of the Shahs and a buyer of Russian, Chinese, and North Korean conventional arms in the last three decades.  

• In particular, it is thought that Iran took advantage of fire sale prices on former Soviet military hardware upon the demise of the USSR.  

• As recently as January 2009, it successfully launched a domestically-engineered satellite and is thought to have missiles capable of reaching Europe, prompting the efforts of the US to construct an anti-ballistic missile shield in Poland and the Czech Republic.  

• It has the ability to place undersea explosives in the Persian Gulf and has already placed missile installations along its Gulf coast capable of striking traffic in the Strait of Hormuz.
  

Nuclear Program

Iran’s nuclear program and atomic posturing are its newest tools of direct power.  

• Having shown considerable ambivalence toward its obligations under the Nuclear Non-Proliferation Treaty (NPT), Iran is now forthright in its intention to complete the fuel cycle to achieve self-sufficiency in its nuclear energy program, in contravention of its obligations under the NPT.   

• This poses a direct threat to the status quo in the region, and has the potential to set off a nuclear arms race among its neighbors and give Iran increased bargaining power on other matters.  

Energy

Iran derives direct influence from its role as an energy supplier.  

• As the second-largest OPEC supplier, Iran has the ability to impact oil prices with its production levels, as it did in the 1970s.  Although OPEC leader Saudi Arabia wields much greater power as a swing supplier, Iran can raise or restrict production in ways that help drive the price of oil.  

• Iran’s natural gas reserves, should they be developed and flow through Iranian controlled pipelines, will give it the potential to use gas pipeline supplies to influence the policies of its customers.

Alliances

Iran wields direct influence through its alliances with other countries, many of whom are hostile to the West.  

• These alliances include Syria and Lebanon, as well as Iraq’s new government.

• Iran also maintains friendly diplomatic and commercial relations of varying degrees with Russia, China, North Korea, and Venezuela.

• Even the suggestion of sympathy and loyalty among these “rogue” nations is worrisome to Western diplomats.

Indirect Foreign Policy Tools

Proxies

The way in which Iran wields the most indirect power is through its use of proxies.  

• Proxies are groups that extend a country’s influence, allowing it to obscure its involvement in particular issues beyond its borders and therefore minimize the probability of retaliation.  The metaphor often used to describe Iran’s proxies in the region is that of tentacles.  Through its funding, training, and supplying of opposition groups and militias in other countries, Iran is able to extend its tentacles into the affairs of other nations while avoiding direct confrontation and maintaining deniability.

• The most visible example of Iran’s use of this strategy is Lebanon.  Throughout the 1980s, Iran stirred the pot in Lebanon’s protracted civil war, supporting different factions and undermining efforts to bring peace.  From supplying arms and funding to Palestinian refugee groups, to creating its own militia known as Hezbollah, Iran is thought to be behind conventional fighting, hostage-taking, and terrorist attacks, including those against American targets.  This endeavor was immensely successful for Iran: American forces withdrew from Lebanon; Israel’s forces ultimately withdrew as well; Lebanon remains fractured.  Hezbollah now dominates the southern part of the country, from which it has conducted attacks on Israel as recently as 2006.   

The success of this endeavor probably emboldened Iran to stretch out its tentacles to other hot spots in the region.  

• Hezbollah is thought to have branches in other Middle Eastern states.  Shia militias in Iraq, including the Mahdi army of al Sadr, maintain connections with Iran.  Even Sunni militias such as Palestinian Islamic Jihad (PIJ), Hamas, and the Muslim Brotherhood are thought to receive Iranian support.  Through these groups, Iran is believed to have been behind numerous terrorist attacks in the region.  

Besides supporting official terrorist groups, Iran has also made proxies of ethnic and religious minority groups in other countries, many of whom control significant natural resources.  

• Tehran is thought to inspire or support separatist groups such as the Kurds in Turkey and Iraq, anti-Pashtun groups in Pakistan, and Shia minorities throughout the Sunni Arab world.  

• In Iraq and some Gulf states, it is thought that Iran may interfere with national governments by co-opting Shia minorities into skimming oil revenues, diverting oil supplies that are then sold by Iran, and colluding on production to affect pricing.

Proxy warfare not only destabilizes states and diverts resources, but can serve as a vehicle for wielding political power within foreign governments.  Support for Shia militias in Iraq has given Iran influence in the newly elected government there.  As Hamas, Hezbollah, and other traditional subversive groups with ties to Iran compete in and win elections, as they did in the Palestinian Territories and in Lebanon recently, Tehran is able to extend its influence inside the governments of its neighbors.

Iranian proxies allow Iran to influence regional peace initiatives.  

• It is probable that no end to the Israeli-Palestinian conflict is possible without Iran’s involvement.  As long as the pot is boiling in Israel and the disputed Palestinian territories, Iran is seen as benefiting from the turmoil; the conflict benefits Iran not only because it creates the opportunity for Iran to expand its influence in the region, but also because the world’s attention is distracted from Tehran’s nuclear program, and Iranian citizens are distracted from Tehran’s domestic problems.

• Iran’s influence on any potential regional peace grants it what Greg Bruno of the Council on Foreign Relations has called the “Iranian veto on Middle Eastern peace.”

Next:  Iran on the World Stage - Foreign Policy:  Iranian Soft Power in the Region and Beyond