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Weekly Standard: White House scrambling to address evidence of Iranian economic boom, sanctions deterioration

Posted by Albert Gersh - February 21, 2014

  • Weekly Standard: White House scrambling to address evidence of Iranian economic boom, sanctions deterioration
  • New report identifies Turkey as global terrorist financing hub, calls for White House pressure to address illicit finance
  • Reuters: Iran boosting military support to Assad, thousands of elite and volunteer Iranian personnel in Syria
  • Analysts: Palestinian state collapse "liable to become a subversive and hostile entity and develop into a grave security threat to Israel"
    • The upcoming edition of The Weekly Standard will evaluate how the White House is positioning itself in relation to growing evidence that the Iranian economy is improving much faster than it should be given previous White House assurances about the limited scope of sanctions relief provided by the interim Joint Plan of Action (JPA). The White House had been blasted by skeptics for misjudging the benefits of the JPA, and more specifically for miscalculating at least two dynamics. Administration economists were criticized for straightforwardly undercounting the value of the eased sanctions, making an array of undergraduate-level and easily identifiable math errors, while administration diplomats were said to have far too glibly dismissed the possibility that even a mild easing in sanctions would trigger a feeding frenzy that further eroded the international sanctions regime. Empirical evidence has piled up in recent weeks indicating that skeptics were correct and the Obama administration was wrong. Writing in the Standard, Hudson Institute Senior Fellow Lee Smith, noting among other things that White House economists were unlikely to have made undergraduate-level calculating errors, asserts that "the plan rather was to get Iranian president Hassan Rouhani lots of cash, the more the better," on the hope that it would become "in his interest to petition Supreme Leader Ali Khamenei for more concessions on the nuclear file." He quotes Mark Dubowitz, the executive director of Foundation for Defense of Democracies (FDD), assessing that relief beyond what was publicly disclosed was "key to [the administration's] whole economic strategy of giving Iran's economy a lift to incentivize Rouhani to deliver more on the nuclear file." Dubowitz predicts in the piece that the administration will soon openly claim that the excessive relief "was their strategy all along."
    • Turkey has become a key global hub of illicit and terrorist financing - undermining U.S. counter-terrorism efforts against Sunni jihadists and playing a key role in busting Washington's sanctions against Iran - according to a new report [PDF] published on Friday by Jonathan Schanzer, vice president for research at the Foundation for Defense of Democracies (FDD). The report cites at least eight distinct schemes involving Iran, Al Qaeda, jihadists in Syria, Hamas, the recently raided Turkish Humanitarian Relief Foundation (IHH), China, and huge swaths of the international banking world. The National Journal had already reported earlier in February that Turkey ignored U.S. calls made from "the highest levels" to assist in tracking terrorists availing themselves of Turkish soil and resources. ABC News covered the new FDD report, conveying a call from Schanzer urging the Obama administration to exert pressure on Ankara regarding illicit finance, opposite what the outlet described as "a clear hands-off message" sent last month by Secretary of State John Kerry in a press conference with Turkish Foreign Minister Ahmet Davutoglu. The Washington Free Beacon also highlighted portions of the report evaluating the White House's position, specifically citing a passage that worried that the White House "has remained on the sidelines... electing not to mention terrorism finance issues publicly." Schanzer's report comes a day after over 80 top foreign policy figures from across the political spectrum dispatched a letter to President Barack Obama calling for elevated pressure on Turkish Prime Minister Recep Tayyip Erdogan and his ruling Justice and Development Party (AKP) to halt an ongoing assault on democratic liberties.
    • Reuters on Friday conveyed reports from what the outlet described as multiple "sources with knowledge of military movements" assessing that Iran has boosted the logistical and material support it provides to Syria's Bashar al-Assad regime, dispatching elite intelligence-gathering teams and training personnel alongside the battlefield support provided by Iran's Lebanese proxy Hezbollah. More specifically, Damascus has recently been provided with hundreds of additional Iranian military specialists, including many drawn from Iran's Quds Force, who are in turn "backed up by thousands of Iranian paramilitary Basij volunteer fighters as well as Arabic speakers including Shi'ites from Iraq." A Turkish official cited by the outlet noted that the tempo of Iranian personnel operating in Syria has increased in recent months, and Reuters noted that many of them stream in from across the Turkish and Iraqi borders. Reuters also cited risk consultant Torbjorn Soltvedt describing Iran's role in Syria as "constitut[ing] a lifeline for the regime," and noting that "the involvement of Iranian Revolutionary Guard personnel and Shiite militias such as Hezbollah remains crucial to the Syrian regime's war effort." The White House for its part has long maintained that Iran can be coaxed to play a positive role in dampening the violence in Syria, with Secretary of State John Kerry seeking to integrate Tehran into the recent round of peace talks and President Barack Obama describing "work" on Iran and Russia as "our best chance of seeing a decent outcome" in Syria.
    • A report published on Thursday by the Israel-based Institute for National Security Studies (INSS) moved to unpack what Senior Research Fellow Kobi Michael described as the "4-level game" that will determine whether the current round of U.S.-backed Israeli-Palestinian peace talks successfully yield a viable Palestinian state alongside a secure Israel. Michael emphasized that in addition to "the military element" - which thus far has been the focus of the U.S.'s security-related efforts - negotiators must also account for the elements of "Palestinian governance... of regional cooperation... [and] of international legitimacy." He worried that "a Palestinian state that falls into the pattern of a failed state is liable to become a subversive and hostile entity and develop into a grave security threat to Israel," pointing out that "a viable Palestinian state that takes governmental responsibility and exercises a monopoly on the use of force is an essential condition for ensuring stability and security." Whatever elements are mobilized to bolster its viability, analysts have long identified at least four critical dynamics that would have to be addressed to prevent a Palestinian state from collapsing into a failed state: the absence of political legitimacy, the absence of economic stability, the absence of a monopoly on the use of force, and the existence of rival governments in some of the territories that Palestinians reserve for a future state. Despite the peace process, it is difficult to find evaluations citing progress along these four dimensions. Palestinian Authority (PA) President Mahmoud Abbas is currently in the ninth year of his four-year term, Palestinians are scrambling to avoid an economic collapse due to donor fatigue, there is a growing jihadist presence throughout territories controlled by Palestinian governments, and efforts to unite the Fatah-controlled West Bank and the Hamas-controlled Gaza Strip have again stalled. The latter factor has often been left unaddressed in peace talks, but a single state under two governments is almost by definition a failed state.

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