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Iran’s Failed Foreign Policy:
Dealing from a Position of
Weakness
omas Juneau
April 2015
Middle East Institute
Policy Papers Series
MEI Policy Paper 2015-1
© 2015 e Middle East Institute
Cover photo: Iranian Foreign Minister Mohammad
Javad Zarif (center) stands with members of the P5+1
to announce the framework of an agreement on the
Iranian nuclear program, April 2015.
MEI Policy Paper 2015-1
Iran’s Failed Foreign Policy:
Dealing from a Position of
Weakness
omas Juneau
Middle East Institute
Policy Papers Series
Contents
1 About the Author
2 Introduction
3 Iranian Power: Less than Meets the Eye
5 Not a Major Player in Yemen
8 Troubles in the Levant
9 Partial Success in Iraq
11 e Nuclear Program: Costly Benets
14 Darkening Clouds
19 Dealing from a Position of Weakness
20 Endnotes
Iran’s Failed Foreign Policy 1
About the Author
Thomas Juneau is an assistant professor at
the University of Ottawa’s Graduate School
of Public and International Aairs. From
2003 to 2014, he was an analyst with Canada’s
Department of National Defence.
2 Juneau
Introduction
Iran’s ambition is to be the dominant state in the Persian Gulf and an
indispensable regional power in the broader Middle East. This is a plausible
aspiration. Iran’s potential assets include a large population, a central geographic
position, and a wealth of hydrocarbon resources. Despite facing favorable
regional circumstances after 2001, however, Iran failed to full this ambition.
Iran’s power is brittle: its conventional military is increasingly obsolescent, its
economy is strangulated by sanctions and mismanagement, and the country
is more diplomatically isolated than it has been for decades. Iran has mostly
developed a narrow power base that enables it to engage in spoiling tactics and
to deny opportunities to its adversaries. As a result, Iran’s inuence—its ability
to actually shape the regional environment in the direction it favors—is heavily
constrained.
This paper explains why Iran is not a rising regional hegemon, as one often
hears, but rather a mid-sized regional power frustrated at not reaching its
ambitions.1 It analyzes the brittleness of Iran’s power and explains how this
constrains its ability to inuence regional developments, especially in Yemen,
the Arab-Israeli conict, Iraq, and the ongoing civil war in Syria. The report
also explains how Iran’s nuclear program has been excessively costly despite
the limited gains it has brought the country. Even more worryingly for Iran, the
situation is unlikely to improve in coming years, as a number of regional trends
are set to perpetuate or even worsen the constraints on its ability to project its
inuence.
This has important implications. As it continues negotiations with the P5+1 (the
ve permanent members of the UN Security Council—China, France, Russia,
the United States, and the UK—and Germany) on its nuclear program, Iran
is dealing from a position of signicant and growing weakness, not strength.
The status quo is, for the Islamic Republic, excessively and increasingly costly.
Tehran’s optimal outcome from these talks has thus not been to consolidate
its regional preponderance but rather to cut its losses after years of mounting
sanctions and isolation. In approaching the next and potentially nal stages of
Iran’s Failed Foreign Policy 3
the nuclear negotiations, the United States is in a position of strength. Pressure
has worked: the Islamic Republic has been contained. It is militarily weak,
economically strangulated, and diplomatically isolated.
Iranian Power: Less than Meets the Eye
Iran faced favorable regional circumstances after 2001. This window of
opportunity was created by the convergence of many benecial factors,
namely the collapse of two neighbors that had served as checks on Iranian
power projection, Afghanistan in 2001 and Iraq in 2003; the rise of close allies,
especially Hezbollah, Hamas, and groups in post-Saddam Iraq; the drop in U.S.
regional legitimacy and the increasing appeal of Iran’s policies; and the rise
in oil prices. Yet Iran failed to consolidate these gains. The growth in Iranian
power—the assets it can bring to bear upon its foreign policy—came mostly
from unconventional elements, while hard aspects of Iran’s power—wealth and
conventional military capabilities—declined. As a result, Tehran has painted
itself into a corner by accumulating a narrow band of tools that increasingly
restricts the inuence it can achieve.
This is most obvious with Iran’s armed forces. Its major weapons systems
are increasingly obsolescent and suffer from low serviceability and reliability
rates and critical spare parts shortages. Iran’s military strengths instead lie in
its unconventional capabilities, especially its ability to support militant groups
across the region, its missile arsenal, and its ability to inict damage to military
and commercial eets in the Persian Gulf. These assets allow Iran to adopt
policies of deterrence, denial, interdiction, and spoiling, but rarely to shape
events. These major weaknesses are unlikely to be resolved in the foreseeable
future, largely because of sanctions, resource constraints, and the cumulative
effect of decades of underinvestment.2
Iran’s economy represents its second major weakness. It is stagnating,
dependent on oil, beset by corruption and mismanagement, and suffocated by
sanctions. Unilateral U.S. sanctions, in particular, have made it increasingly
costly for Iranian businesses to access the international nancial and banking
4 Juneau
systems. Since 2011, the EU has also adopted
sanctions that have surprised Iran by their
severity. Most strikingly, in 2012 Brussels
banned European reneries from importing
Iranian oil. Like the United States, the EU
also adopted restrictions banning the selling
of insurance for the shipping of Iranian oil.
As a result, Iran’s oil production fell to under
three million barrels per day (bpd) in 2013, its
lowest level since 1990 and less than half the
levels before the 1979 revolution. Iran now
has an export capacity of only one million bpd, down from 2.3 million in 2011,
a drop in revenue of $60 billion per year. The Iranian riyal lost half its value
against the U.S. dollar in 2012. Ination, in double digits for years, is likely to
remain high for the foreseeable future. Unemployment and underemployment,
already high, are rising, causing growing discontent. The recent drop in oil
prices further worsens Iran’s bleak economic outlook; by some accounts, Iran’s
revenues are set to decline by $30 billion in 2015.3
The situation is worsening. The IMF calculates that though Iran’s economy
grew between 6 and 8 percent per year from 2002 to 2007 thanks to high
oil prices, growth has since stalled and was even negative in 2012 and 2013
(-6.5 and -1.9 percent). The Fund forecasts that on current trends, growth will
average only about 2 percent between 2015 and 2019. Because of the country’s
demographics, low growth results in rising youth unemployment. Prolonged
stagation, the combination of stagnating growth with high ination, is a real
threat.4
All has not been bleak for the Islamic Republic. The appeal of its opposition
to the U.S.-dominated regional order increased throughout the Middle East
after 2001. The occupation of Afghanistan and Iraq, the war on terrorism and
its symbols such as Guantanamo and Abu Ghraib, and U.S. support for Israel
created a pool of resentment into which Iran could tap. Iran’s ability to use this
as a source of leverage reached a peak around 2006-2007, when U.S. troubles
“Iran is
militarily weak,
economically
strangulated, and
diplomatically
isolated.”
Iran’s Failed Foreign Policy 5
in Iraq were most pronounced, and in the wake of the 2006 war between Israel
and Hezbollah.5
As with other elements of its power, however, the gains that Iran has made
through the appeal of its policies were brittle and have since declined. The
repression of protests after the controversial 2009 elections, for example,
tainted Iran’s reputation. Tehran’s support for the Bashar al-Assad regime in
Syria has also been damaging. A poll conducted by the Pew Research Center
in 2013 found that majorities in Muslim countries had negative opinions of
Iran, including 81 percent in Jordan, 78 percent in Egypt, and 55 percent in
the Palestinian Territories, much higher proportions than in 2006.6 Iran’s failed
attempt to stake a moral leadership claim in the Arab uprisings illustrates the
limits of its appeal. It initially labelled them as an “Islamic awakening” inspired
by its own revolution, but it was not able to shape events in any of them. Even
in Bahrain, where a restive Shi‘i majority took to the streets to protest against
oppression by a Sunni regime, protesters did not look to the Islamic Republic
as a model to emulate.
Not a Major Player in Yemen
Taking advantage of Yemen’s fractured and weak government, the Houthis
emerged from their northern base and seized Yemen’s capital, Sana, in September
2014. As they steadily expanded their control, the weak president, Abdu Rabbu
Mansour Hadi, ed Sana in February 2015, precipitating an escalation of violence
that morphed into civil war.7 In late March 2015, Saudi Arabia assembled a
coalition of ten mostly Arab states to launch air strikes with the objectives of
weakening the Houthis and reinstating Hadi. Given the Houthis’ ties to Iran,
these events have created an opening for predictably overblown accusations that
Tehran has taken over yet another Arab country. e Houthis, however, are not
Iranian proxies; Tehran’s inuence in Yemen is in fact marginal. e civil war
in Yemen is driven rst and foremost by local political factors; it is at its base
neither an international proxy war nor a sectarian confrontation.
Iran pursues a variety of objectives when it decides to support sub-state actors
throughout the region. In many cases, it seeks to generate actual or potential
6 Juneau
pressure points on rivals (chiey Israel, Saudi Arabia, and the United States);
to gain access to specic areas to use as launching pads to project its inuence;
and to develop ties to groups that could retaliate against the United States or its
regional interests and partners in the event of a confrontation, thereby improving
Iran’s deterrence and capacity to hurt its rivals.
Contrary to a widespread misperception, Iran does not choose such partners
on the basis of a common adherence to Shi‘ism. Rather, actors tend to become
the Islamic Republic’s partners according to their views of the regional order
dominated by the United States and its local partners, especially Israel and Saudi
Arabia. To become candidates for Iranian support, states and sub-state actors
must oppose this status quo. at is why Hamas and Palestinian Islamic Jihad—
Sunni nationalist groups opposed to Israel—are Iran’s partners in the Palestinian
Territories, or why the Assad regime—dominated by Alawites, a distant oshoot
of Shi‘ism but also including other minorities and some Sunnis—is Iran’s ally.
Iran has historically had very limited interests in Yemen. Recent trends, however,
have increased—albeit to limited levels—Tehran’s willingness to support actors
in the country. Regionally, Tehran’s growing perception of encirclement and its
troubles in Syria and elsewhere have motivated it to pursue new opportunities
to maximize its security and inuence. Second, rising disorder in Yemen has led
to a greater opening for involvement by external actors. And third, the growing
dissatisfaction of the Houthis has led to the emergence of an attractive potential
partner.
e Houthis rightly believe that the political order in Yemen has long excluded
them and is dominated by Sana-based elite with no interest in giving them a
greater say. In their view, the protests of 2011 and the Saudi Arabian and U.S.-
mediated transition agreement that led to former President Ali Abdullah Saleh’s
resignation and to Hadi’s accession to the presidency only led to a reshuing
of the balance of power among the elite but not to the inclusion of previously
marginalized actors.8 Furthermore, this domestic order is backed by Saudi
Arabia and the United States. It is this dissatisfaction that makes the Houthis
an attractive partner, not sectarianism; religious anity between Iran’s Twelver
Iran’s Failed Foreign Policy 7
Shi‘ism and the Houthis’ Zaydi or Fiver
version is limited.
at said, the nature and extent of Iranian
activities in Yemen are unknown. Most
analysts agree that though Iran’s interest
in Yemen is relatively low, especially in
comparison to its much greater stakes
in Iraq and Syria, its presence increased
starting in 2011.9 ere is no evidence,
however, suggesting that its support for
the Houthis, which reportedly includes cash transfers, weapons, advice, and
training, is at more than a fairly low level.10 It also pales in comparison to the
billions of dollars that Saudi Arabia has poured into Yemen over the years in
support of the government and various tribal, religious, and military leaders.
Indeed, whereas Yemen ranks relatively low on Tehran’s priorities list, it ranks
very high for Riyadh: instability in Yemen probably aects Saudi Arabia, through
its “so underbelly,” more than any other country.11
Houthi actions are driven almost entirely by local—political, tribal, economic—
concerns. ere is no indication that Iran has any ability to shape, let alone
steer, Houthi decision making. Perhaps most crucially, the Houthis would never
have been able to seize Sana and extend their presence toward the south and
east without the support—tacit at rst, increasingly overt with time—of former
President Saleh, who retains the loyalty of signicant units in the military and
among tribal forces. It is Saleh’s cooperation, not Iran’s marginal support, that is
most responsible for the Houthis’ successes since mid-2014.
Iran, in sum, has limited interests in Yemen, its presence has a marginal impact
on the domestic balance of power, and its support is puny compared to the
resources Saudi Arabia has poured into the country. Yemen is, quite simply, much
less of a priority for Iran than it is for Saudi Arabia. Tehran thus understands
that its potential gains from getting involved there are limited, whereas losses
could mount if, hypothetically, it actually invested large amounts of resources
“e Houthis,
however, are not
Iranian proxies;
Tehran’s inuence
in Yemen is in fact
marginal. ”
8 Juneau
and signicantly annoyed Riyadh. In this context, Tehran’s inuence in Yemen
is heavily constrained; it is far from a game changer, while the Houthis are not
a proxy or pawn of Tehran.
Troubles in the Levant
From Tehran’s perspective, reducing a rival’s margin of maneuver can represent
a gain. Iran has succeeded in some instances in constraining Israel’s options.
In part because of Iranian support for Hamas, Islamic Jihad and, to a greater
extent, Hezbollah, Israel needs to act with greater restraint. During the 2006
war between Israel and Hezbollah, for example, an Iranian-made version of a
Chinese radar-guided anti-ship missile struck an Israeli warship, killing four.12
e knowledge that Hezbollah possesses this capability limits Israel’s ability to
operate o the Lebanese coast, challenging its inuence in the southeastern
Mediterranean Sea. It does not deny Israel access to the area, but raises the costs
of operating there by forcing its navy to operate farther from the coast and to
invest more in protective measures.
Similarly, Hezbollah’s ability to penetrate Israeli main battle tanks with Iranian-
provided anti-tank guided missiles during the 2006 war imposed an additional
constraint on Israel’s margin of maneuver in Lebanon, limiting its ability to
circulate with heavy armor.13 Iran’s provision of military support to Palestinian
groups has a similar eect: it does not fundamentally alter the local balance of
forces, but it does tip it in a direction slightly less favorable to Israel, further
constraining the latter’s options by increasing the costs of certain courses of
action.
Iran thus only has a narrow set of tools to inuence the Arab-Israeli conict; its
inuence suers from limited breadth. It does not, in particular, possess extensive
economic tools or conventional military assets to shape events. Instead, its main
tools are ties to militant groups and the appeal of its anti-status quo policies.
is limited arsenal heavily constrains its options: it can do little more than
raise the costs for its adversaries of taking certain courses of action and score
rhetorical points by provoking them.
Iran’s Failed Foreign Policy 9
Iran, as a result, mostly failed in its eorts to align the regional environment
on the basis of its preferences. Instead, its main success has been in sometimes
preventing its rivals from shaping the regional environment on the basis of
their own interests. Iran has been able to play this spoiler role by establishing
footholds surrounding Israel and by making inroads into Palestinian and
Lebanese politics.
e eventual normalization of Israel’s relations with the Arab world would
therefore cost Iran regional inuence. Should Israel and the Palestinians make
peace, a number of Palestinian groups (though probably not all) would end
violent resistance toward Israel (without necessarily recognizing it). Iran’s ability
to project power in the Levant by opposing Israel would be hindered. Moreover,
a reduction in its isolation would remove constraints on Israel’s ability to project
its power, improving its position relative to Iran. e conict’s perpetuation,
on the other hand, ensures a permanent pool of resentment and frustration on
which Iran can capitalize.
Most importantly, the costs of Iran’s policy toward the Arab-Israeli conict have
been high. It is true that Iran can constrain its adversaries: partly as a result of
its retaliatory tools, the United States and Israel have refrained from directly
attacking Iran. Yet its stance contributes to the regional U.S. military buildup and
alienates Iran from most of its neighbors and increases its diplomatic isolation.
Indeed, every Arab state, with the exception of Syria, as well as Turkey is highly
suspicious of Iran, opposes its ambitions, and refuses to accompany it in its
opposition to Israel.
Partial Success in Iraq
Post-Saddam Iraq represents the main area where Iran has achieved some foreign
policy success. By supporting and prodding them to cooperate, Tehran has
played since 2003 a major role in consolidating the dominance of Shi‘i political
and armed groups. is, in turn, has helped ensure that Iran’s key interest in Iraq
has been fullled: that Iraq would be neither led by a pro-United States or anti-
Iran Sunni Arab nationalist regime, nor that it would collapse or break apart.
10 Juneau
e rst indicator of the Islamic Republic’s partial success in Iraq aer 2003
was its ability to constrain the U.S. margin of maneuver and hinder its ability to
shape the nascent post-Saddam order. During the American occupation, Iran’s
support for militant groups, in particular, heavily constrained the United States
and hindered its ability to pursue its objectives. Iran’s provision of the technology
and training for explosively-formed penetrators (EFPs), for example, raised
the cost to the United States of engaging in ground operations. EFPs, which
are quick to deploy, accurate, and lethal, accounted for only about 1 percent of
roadside bombings against U.S. forces but had the highest lethality rate of any
type of attack.
eir use compelled U.S. troops to adopt costly force protection measures and
forced them to put greater emphasis on aerial movements, limiting the time they
could spend outside bases.14 Similarly, Iran’s ties with armed groups provided it
with retaliatory tools in the event of a military confrontation with the United
States or Israel. is constrained the latter by raising the cost of an attack, as it
had to take into consideration the possibility that U.S. interests in Iraq would be
targeted in response.
As is its usual strategy, Iran has oen hedged its bets in post-Saddam Iraq.
It initially supported a large number of groups, ensuring that it would back
eventual winners. Iran also frequently supported the formation of splinter
groups when it feared that an ally was
growing autonomous or less reliable. ese
groups were smaller and more dependent
on Tehran and thus were more likely to
act on the basis of Iranian interests. Today,
Iran still signicantly relies on breakaway
groups from large Shi‘i factions, such as
Kata’ib Hezbollah and Asa’ib Ahl al-Haq.15
Some of Iran’s successes will last, as it is
today and will remain for the foreseeable
future the most inuential external player
“...the more
the Iraqi state
rebuilds, the
less permeable
it is to external
penetration—
including by Iran.”
Iran’s Failed Foreign Policy 11
in Iraq. e main Iraqi Shi‘i groups are likely to maintain close ties with Tehran
and remain dominant in Baghdad. In addition, rivalry between Shi‘i groups
will continue to allow Iran to consolidate its position as an indispensable power
broker.
at said, Iran’s inuence in Iraq started declining aer its peak in 2006-2007
because of the gradual intensication of a number of trends. As the main Iraqi
political parties have become more autonomous and focused on serving the
interests of their domestic constituents, support for smaller, more violent
militias has come to occupy an increasingly prominent role in Iran’s arsenal.
is narrows its options and confronts it with consequences, such as Iraqi
resentment, of supporting violence.
Similarly, Iran’s weak economy constrains its ability to penetrate the Iraqi
market and therefore to broaden and consolidate its inuence. As Najaf, Iraq’s
main Shi‘i holy city, gradually regains its place as the center of Shi‘i learning, the
limited appeal to Iraqis of Qom and its activist model of clerical governance is
increasingly apparent. And perhaps most importantly, the more the Iraqi state
rebuilds, the less permeable it is to external penetration—including by Iran.
As will be discussed below, the emergence of the Islamic State since 2014 has
slowed or reversed some of these trends, but the long-term prognostic remains
somewhat bleak for Iran’s inuence in Iraq.
The Nuclear Program: Costly Benets
Iran’s performance in achieving regional inuence through its nuclear program
is mixed but ultimately underwhelming. On the basis of one indicator of
inuence—the ability to set the terms of the regional debate—Iran has had
some limited success. Its eorts focus on emphasizing that negotiations are a
pretext for American bullying designed to prevent Iran, a developing nation,
from acquiring advanced technology.
For Tehran, the double standards whereby others—read Israel—are given free
rein represent nuclear apartheid, an argument that resonates among many in
12 Juneau
the region. At a summit of the
Non-Aligned Movement in 2006,
for example, the 118 member
states rearmed “the basic and
inalienable rights of all states to
develop research, production, and
use of atomic energy for peaceful
purposes,” implicitly supporting
Iran’s position. e statement also
called for the establishment of a nuclear weapons free zone in the Middle East
and for Israel to join the Non-Proliferation Treaty (NPT), also Iranian positions.
Tehran succeeded in inserting its preferred wording in the statement, but this
had no discernible eect on the nuclear dispute. As has oen been the case, Iran
scored a tactical rhetorical win but failed to make a tangible gain.16
e nuclear program has provided Iran with other, limited benets. e country,
in particular, has developed over the years signicant expertise and extensive
infrastructure in the nuclear eld, an important gain that will bring benets
over the long term. e pursuit of its nuclear program has also allowed Iran to
constrain U.S. options. For Washington, years of negotiations within the P5+1
have been costly: they have exposed divisions with the Europeans and forced
dicult negotiations with Russia and China. e latter two, in particular, know
the high price Washington attaches to the nuclear issue and have thus been able
to force repeated dilutions of sanctions. is has shut the United States out of
the Iranian market while allowing Russian and Chinese companies to increase
their access.
e manner in which Iran has gone about this pursuit, however, has been
excessively costly. Despite limited gains, Iran has suered increasingly harsh
consequences. Iran’s military has been weakened by sanctions, which prevent it
from acquiring spare parts for its many U.S.-acquired weapons systems dating
from the pre-revolutionary era. e 2010 UN sanctions, in addition, ban the
sale of major oensive weapons systems to Iran. Its conventional military power,
partly as a result, has steadily declined since 1979. is narrows its options by
“e more Iran has
progressed, the greater
regional opposition
to its ambitions has
b e c o m e .”
Iran’s Failed Foreign Policy 13
pushing it toward the maximization of unconventional assets, which in turn
reinforces its tendency to resort to spoiling and denial tactics. Sanctions have
also crippled Iran’s economy, signicantly contributing to its high levels of
ination, unemployment, and stagnation. Iran’s oil and gas sector, in particular,
suers from massive underinvestment, causing a deciency of at least two
million barrels per day compared to pre-1979 output. A quick counterfactual
exercise suggests that over the past 35 years, Iran’s economy—and therefore its
power—would have become much stronger had it not been for this shortfall.
Iran’s progress along the nuclear path has also had negative implications for
the power it derives from partnerships. Moscow and Beijing share common
interests with Tehran, especially in their opposition to U.S. preponderance. ey
are therefore willing to cooperate on specic issues to stymie U.S. goals. Russia
and China, however, believe that the prospect of a nuclear-armed Iran would go
against their interests. ey are thus not sympathetic to the prospect of a more
powerful Islamic Republic assertively pursuing its regional interests. ey have
also typically been careful not to damage their ties to Iran’s Arab rivals at the
expense of their ultimately limited ties to Tehran. As a result, the more Iran has
approached nuclear capability, the more they have supported tougher sanctions
and the less they have been willing to cooperate with Iran.
e more Iran has progressed, moreover, the greater regional opposition to its
ambitions has become. Indeed, Iran’s pursuit of nuclear capabilities has been
one of the main factors driving its isolation. Most Arab states, especially in the
Persian Gulf, have been particularly anxious. eir main fear is not so much
that a nuclear-armed Iran would attack them but rather that nuclear capability
would drive Tehran to behave more assertively.
Similarly, they fear that Hamas and Hezbollah, emboldened by Iran’s nuclear
umbrella, would also adopt more assertive stances. As a result, Iran’s nuclear
program has led most regional states to balance increasingly rmly against it. In
particular, Arab states of the Gulf are massively investing in advanced defense
capabilities and have increased security cooperation with the United States.17
is has been counterproductive; one of the Islamic Republic’s core objectives is
14 Juneau
to block regional U.S. inuence, yet its nuclear ambitions guarantee a long-term
U.S. presence in the Persian Gulf.
Darkening Clouds
Iran could be a highly inuential player in the Middle East. But with the
partial exception of Iraq, it has not developed the assets necessary to shape
outcomes; rather, it has primarily developed the means to block or spoil
regional developments. And the situation is unlikely to improve signicantly in
coming years. Iran’s two main weaknesses—its feeble military and its stagnating
economy—are likely to continue deteriorating or will, in the best of cases, take
years and even decades to improve.
Having reached the peak of its inuence in Iraq in 2006-2007, Iran saw its
ability to shape events there steadily decline aerward. e rise of the Islamic
State (IS), a Sunni coalition dominated by the successor to al-Qa‘ida in Iraq
alongside remnants of Saddam’s regime and tribes resentful of Baghdad’s Shi‘a-
centric policies, has caused a temporary reversal in Iran’s declining fortunes in
the country. Indeed, to help counter IS aer it seized swathes of northwestern
Iraq in 2014, Iran sent advisors and equipment to support Iraqi troops. It
also remobilized Shi‘i militias it supported at the time of the U.S. occupation,
allowing them to regain a prominent role in Iraqi security. is has allowed Iran
to remain the external actor with the most inuence in Iraq by increasing the
weakened Baghdad government’s dependence on and need for Iranian support.
Yet despite these recent gains, the longer-term trend of growing constraints on
Iran’s power in Iraq remains. It is certainly the case that the partial collapse
of the Iraqi military in 2014 implies that its role as a growing counterpoise
to Iranian military power is weaker than previously thought. Yet the Iraqi
military—fuelled by a steadily growing $17 billion defense budget, larger than
Iran’s, and reinvigorated U.S. assistance—continues to rebuild. Baghdad, in
particular, is investing in heavy artillery and armor and in ghter aircra to
transform its army into a more conventional one. It has taken or will soon take
delivery, for example, of U.S.-made F-16s and advanced tanks, far superior to
Iran’s Failed Foreign Policy 15
Iran’s equivalent kit.18 A growing number
in the Iraqi population and security
forces, moreover, are suspicious of Iran’s
ambitions.
In addition, many of Iran’s Iraqi allies
continue to become more autonomous.
e more the Islamic Supreme Council
of Iraq (ISCI), the Da‘wa Party, and the
Sadrists integrate the political process—
similarly to Hezbollah—the more they
need to satisfy their own constituents.
ey are also diversifying their support,
becoming less dependent on Iran. As a
result, Iran’s ability to steer them to take
into consideration Iranian interests will
continue to diminish. For Iran, the decline
of ISCI is especially worrisome, as its loss
of popularity has been partly attributed to its ties to Tehran. Iran is therefore
becoming increasingly forced to rely on armed militias to exert its inuence.
Iran’s ability to inuence the Arab-Israeli conict has been limited. To the
extent it was able to shape outcomes, it was through its ability to deny, block,
and spoil. Moreover, because the imbalance of power between Iran and Israel
will continue to signicantly favor the latter for the foreseeable future, Iran will
become even more dependent on its ties to militant groups in its attempts to
inuence the Arab-Israeli theater. Yet these alliances will provide Tehran with
diminishing returns. Hezbollah’s power is not declining, but the movement is
increasingly autonomous. Its priorities are shiing, as it must rst satisfy the
interests of its constituents. It is still reliant on Iran’s support, but it has also
expanded its sources of funding, reaching out to the Lebanese diaspora and
increasing revenues from various legitimate and illegitimate businesses. As a
result, Iran’s ability to leverage its ties to Hezbollah is declining.
Ba‘thist Syria has been the Islamic Republic’s only state ally since their common
opposition to Saddam Hussein brought them together during the Iran-Iraq War
“Hezbollah’s
priorities are
shiing, as it must
rst satisfy the
interests of its
constituents...As a
result, Iran’s ability
to leverage its ties
to Hezbollah is
declining.”
16 Juneau
of 1980-1988. e relationship has brought Iran important benets, allowing
it to avoid complete isolation and providing it with a valuable platform from
which to pressure Israel. Yet the onset of the civil war in Syria reinforces the
trend of declining Iranian inuence in the Levant.
Iran’s increased support for the Assad regime since 2011 is essential to the
latter’s survival; it is therefore not inaccurate to argue that Iran has been able
to increase its presence in Syria. In a way, this does boost Tehran’s inuence
by making Damascus dependent on Iranian assistance. It is more accurate,
however, to assess that Iran’s support allows it to cut its losses by preventing the
Assad regime’s collapse, not to make net gains. Indeed, the severe weakening of
its only state ally and its possible defeat represent a major loss for the Islamic
Republic.
Even if the Assad regime survives, it will be weakened and inward-focused; it
will not act as a check on Israel as before. Tehran’s support for the Assad regime,
moreover, is very costly. It acts as a drain on limited Iranian resources, while
it makes leveraging the regional appeal of the Islamic Republic’s opposition to
the United States and Israel—until recently a key source of its ability to project
inuence—much more dicult. e benets that Iran reaps from its partnership
with Syria, in other words, can only continue to decline from their peak of a
decade ago.
e Syrian war has also been costly for Hezbollah. More precisely, the war,
alongside developments inside Lebanon, has damaged Iran’s ability to gain from
its partnership with it. Hezbollah has certainly benetted on some fronts. It has
gained ghting experience and has allegedly received more advanced weaponry
from Syria and Iran since 2011, including through the transfer of some of Syria’s
missiles to Lebanon.19 is would increase its capability to impede the Israeli
navy’s ability to operate near Lebanon. Yet the Lebanese militia-cum-party has
lost hundreds of ghters in Syria, while its legitimacy has suered. It is now
viewed less as the chief frontline resistance against Israel and more as the lifeline
of a regime that oppresses Sunnis. At the same time, Hezbollah has become
more deeply entrenched in Lebanon which, over time, is pushing it to become
Iran’s Failed Foreign Policy 17
more responsive to the interests of its domestic constituents and less to those
of its external patrons. ese evolutions are consistent with the overall negative
trends aecting Iran’s inuence: Tehran is increasingly reliant on spoiling and
denial assets, while what appear to be gains are actually opportunities to cut its
losses.
ere are also growing limits to Iran’s ability to benet from its ties to Hamas.
Attitudes toward Iran among Palestinians are ambivalent. Even within Hamas,
there is discomfort with receiving assistance from Iran, a Shi‘i and Persian state
with which the Muslim Brotherhood (from which Hamas is the Palestinian
oshoot) has tense relations. e conict in Syria has widened this chasm. A
Sunni Arab organization, Hamas leans toward the Syrian opposition, causing
most of its leadership to leave Damascus for Cairo and Doha. Angered by
Hamas’s refusal to side with Assad, Iran has since decreased its support.20 is
damages Iran’s ability to pressure Israel and forces it to rely on the more violent
Palestinian Islamic Jihad (PIJ). is represents a loss for Iran; again, it further
narrows and militarizes its future options.
For years, the nuclear stando
muddled along, with neither a
U.S. or Israel attack nor a deal
resolving the crisis. e election of
a pragmatic conservative, Hassan
Rouhani, to the Iranian presidency
in 2013 catalyzed the launch of
serious negotiations. us aer
many failed attempts, Iran and
the P5+1 agreed in November
2013 to a Joint Plan of Action, an
interim agreement establishing
parameters for negotiations. In
April 2015, aer 18 months of hard negotiations, Iran and the P5+1 reached
a framework agreement establishing the parameters that would form the basis
for a nal agreement, to be negotiated by June 30, 2015. e framework places
“Tehran is increasingly
reliant on spoiling
and denial assets,
while what appear to
be gains are actually
opportunities to cut its
losses.”
18 Juneau
severe restrictions on Iran’s nuclear program and imposes a stringent inspections
regime in exchange for the gradual liing of some sanctions.21 ough the April
deal was reached in a climate of cautious optimism, many details remain to be
worked out and negotiations still face opposition in the U.S. Congress and from
U.S. partners in the Middle East, especially Israel and Saudi Arabia.
Should Iran and the P5+1 reach a comprehensive agreement, Iranian power
would be boosted. Most importantly, some sanctions would be lied, which
would benet Iran’s economy. Yet any gains Iran would make would only allow
it to partially recoup the massive losses it has incurred because of its choices.
Indeed, the text of the Joint Plan of Action is clear in stating that only “nuclear-
related sanctions” are to be lied aer a comprehensive agreement, while the
United States has emphasized that non-nuclear sanctions—imposed over the
years because of its concerns over Iran’s support for terrorist groups and its
violations of human rights—would remain in place. Moreover, to the extent that
there would be sanctions relief, it would likely take years and would thus not be
a short-term panacea for Iran’s battered economy.
Iran, moreover, would remain the main geopolitical competitor for Israel,
Saudi Arabia, and the other Arab states of the Persian Gulf. For Tehran’s rivals
in the Middle East, the nuclear program has been a symptom, not a cause, of
its ambitions. As such, regional states would be even more concerned at the
prospect of an Iran unshackled by the removal of some sanctions. Its regional
ambitions would therefore provoke even greater resistance. In addition, the U.S.
security architecture in the Gulf and the Middle East, partly aimed at containing
Iran, would remain in place. Even aer a comprehensive deal, in sum, major
constraints on Iran’s ability to project its power would remain or even intensify,
while only some would gradually be lied.22 erefore, a nuclear deal would not
by any means compound the “nightmare” of Iran’s alleged “domination” of a
“satellite Shiite crescent.”23
Iran’s Failed Foreign Policy 19
Dealing from a Position of Weakness
Iran is a powerful state with the ability to inuence events throughout the Middle
East. But though the Islamic Republic has the potential—and the ambition—
to be a hegemonic regional power, it is far from being one. Iran can plausibly
aspire to an important regional role, but its weak conventional military and its
stagnant economy prevent it from reaching its potential. Its tool kit emphasizes
unconventional and retaliatory assets instead of conventional power projection.
It can intimidate or threaten, it can spoil or deny, it can increase the costs for
the United States and its regional partners of undertaking certain actions. Yet its
ability to actually shape events is limited, well below its potential—and declining.
Iran, moreover, is unlikely to emerge as a dominant regional power for the
foreseeable future. Even if circumstances change—if, in particular, Iran and the
P5+1 agree to a nal deal resolving the nuclear stando—many of the trends
playing against it will remain. A comprehensive agreement would not represent
a cure-all for Iran, as many sanctions would remain in place, and others would
only be gradually lied over many years. As a result, Iran’s oil production
would not suddenly leap. e Iranian economy would still be mismanaged and
weakened by corruption, an unpredictable and sometimes hostile investment
climate, and dependence on hydrocarbons. Its military would need decades to
rebuild.
Moreover, the eventual emergence of a stronger Iraq will act as a strong check
on Iranian inuence. It will also remove one of the Islamic Republic’s only
real foreign policy successes, as a more robust Iraq will not be a powerful ally
or proxy of the Islamic Republic but a competitor. Most fundamentally, any
gains that Iran would make from an agreement resolving the nuclear issue or
from recent events in Iraq must be seen as opportunities for Tehran to cut its
losses, not to make net gains. Iran has made extremely costly choices that have
caused major harm to its economy, diplomatic standing, and military power.
e Islamic Republic will need decades to repair this damage and eventually
generate sucient capabilities to full its regional ambitions.
is paper is based on the author’s forthcoming book with Stanford University Press, Squandered
Opportunity: Neoclassical Realism and Iranian Foreign Policy. Used with permission.
20 Juneau
Endnotes
1 References to Iran’s status as an emerging
regional superpower are frequent in the United States,
Israel, and Arab monarchies and republics aligned
with the United States. Charles Krauthammer, for
example, wrote of “growing Iranian hegemony” in
“Iran’s Emerging Empire,” Washington Post, January
22, 2015. Similarly, three prominent pundits recently
referred to the Iranian-led resistance front “galloping
across the region.” See Dennis Ross, Eric Edelman, and
Ray Takeyh, “Time to Take it to Iran,” Politico, January
23, 2015.
2 For more on the brittleness of Iranian power,
see omas Juneau, “Iran: Rising but Unsustainable
Power, Unfullled Potential,” in omas Juneau and
Sam Razavi (eds.), Iranian Foreign Policy since 2001:
Alone in the World (London: Routledge, 2013), 18-39.
3 For an analysis of the impact of falling oil
prices on Iran’s economy, see the World Bank’s “MENA
Quarterly Economic Brief: Plunging Oil Prices,” Issue
4, Washington, D.C., 15-17.
4 Kevan Harris, “Rouhani’s Next Test: Empty
Coers,” e Iran Primer, December 2, 2013.
5 Azadeh Kian-iébault, “Iran: Menace
ou modèle pour le monde musulman?” Questions
Internationales 25 (May-June 2007): 23-29.
6 Pew Research Center, “Global Views of Iran
Overwhelmingly Negative,” Global Attitudes Project,
June 11, 2013.
7 e Houthis launched an insurgency in 2004
and fought six wars against central government forces
until 2010. eir main grievances were originally local:
frustration about political marginalization at the hands
of the Sana elite and their region’s underdevelopment.
ey have since steadily emerged as one of the country’s
most powerful actors. See International Crisis Group,
“Yemen at War,” Middle East Brieng No. 45, March
27, 2015.
8 omas Juneau, “Yemen and the Arab
Spring,” in Mehran Kamrava (ed.), Beyond the Arab
Spring: e Evolution of the Ruling Bargain in the
Middle East (Oxford: Oxford University Press, 2015),
373-396.
9 W. Andrew Terrill, “Iranian Involvement in
Yemen,” Orbis 58, 3 (Summer 2014): 429-440.
10 Brian Whitaker, “Yemen and Iran: What’s
Really Going on?” Al-Bab, March 30, 2015, http://
www.al-bab.com/blog/2015/march/yemen-iran.htm.
11 ere are anecdotal reports that Iran also
provides support to some southern separatists. Again,
the nature and extent of this assistance is unclear, but
it is most likely at an even smaller level than for the
Houthis.
12 Alon Ben-David, “Israel Navy Caught Out
by Hizbollah Hit on Corvette,” Jane’s Defence Weekly,
August 19, 2006.
13 Nicholas Blanford, “Deconstructing
Hezbollah’s Surprise Military Prowess,” Ja ne’s
Intelligence Review, October 24, 2006.
14 Liz Sly, “Iraq Kidnapping reat reatens
US Civilian Eort,” Washington Post, December 5,
2011.
15 Michael Knights, “e Evolution of Iran’s
Special Groups in Iraq,” CTC Sentinel, November 1,
2010.
16 “Statement on the Islamic Republic of Iran’s
Nuclear Issue,” 14th Summit Conference of Heads of
State or Government of the Non-Aligned Movement,
September 11-16, 2006, http://cns.miis.edu/nam/
documents/Official_Document/14NAMSummit-
Havana-Compiled.pdf, 74-75.
17 Anthony Cordesman, “e Gulf Military
Balance, Volume I: e Conventional and Asymmetric
Dimensions,” Center for Strategic and International
Studies, January 31, 2014.
Iran’s Failed Foreign Policy 21
18 U.S. government approval of weapons sales to
Iraq nearly tripled in 2014, reaching $15 billion. Doug
Cameron, “U.S. Clears Iraq Arms Sales but Congress
Could Block,” Wall Street Journal, December 23, 2014.
19 Daniel Byman and Bilal Saab, “Hezbollah in a
Time of Transition,” Brookings Institution, November
2014, 3.
20 Hanin Ghaddar, “Marriage and Divorce of
Hamas and Hezbollah,” e Iran Primer, August 27,
2013.
21 Ilan Goldenberg, “Remaining Hurdles to
a Nuclear Agreement with Iran,” War on the Rocks,
April 9, 2015, http://warontherocks.com/2015/04/
remaining-hurdles-to-a-nuclear-agreement-with-
iran/?singlepage=1.
22 omas Juneau, “Iran under Rouhani: Still
Alone in the World,” Middle East Policy 21, 4 (Winter
2014): 92-104.
23 Krauthammer, “Iran’s Emerging Empire.”
Assertions and opinions in this publication
are solely those of the author and do not
necessarily reect the views of e Middle
East Institute, which expressly does not take
positions on Middle East policy.
