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Middle East proxies’ ration of Iranian economy

There is a fundamental question about Iran’s economic status quo: More than one year after the lifting of international sanctions, why is the economy riddled with crises and even deteriorated in various regards?

In response to this question, Iranian affairs analysts cite various elements, including poor infrastructure, widespread corruption, political instability, numerous risks facing investments, and unfounded laws. But there are also factors created by the foreign policy choices of Iran’s theocratic government.

In this regard, one must undoubtedly take into consideration the heavy cost of Iran supporting terrorist proxy groups scattered across the Middle East. Iran’s fiscal budget bill (from March 2017 to March 2018) has allocated over 859 trillion rials (equal to $24.5 billion) for military and security affairs. This is 23 percent of the country’s general budget.

However, there is no mention of any proxy groups in the numbers and charts.

Iran HezbollahThe main percentage of these groups’ costs are paid through the revenues of the “Setad Ejraiye Farmane Hazrate Emam” – Headquarters for Executing the Order of the Imam, the Revolutionary Guards (IRGC) Cooperative, the Imam Khomeini Relief Foundation, the IRGC Basij Cooperative and a percentage of the government’s budget.

Although no official information has been published on these proxy groups’ expenses, a list of their names is proof itself of the heavy burden they place on Iran’s economy.

IRAQ

  • Badr Organization
  • Al-Nojaba Movement
  • Asa’ib Ahl al-Haq
  • Kata’ib Hezbollah
  • Kata’ib Imam al-Ali
  • Sarya Al Khorasani
  • Kata’ib Seyed al-Shohada
  • Liwa Abu Fadl
  • Liwa’a Zulfiqar
  • Harakat al-Abdal

The list also includes a number of smaller groups. The number of such Iran-linked Shiite groups in Iraq are in the dozens, and nearly all are members of the Popular Mobilization (PMF), or what is commonly known as the Hashd al-Shaabi.

hashd.jpg

Hashd al-Shaabi.

YEMEN

The Ansarollah, or the Houthis, were established in 1997 under orders from Iran based on the Lebanese Hezbollah example and structure.

LEBANON

The Lebanese Hezbollah has a long and well-known history of being founded by Iran and advancing Tehran’s policy in the region, while conducting terrorist attacks across the globe.

BAHRAIN

  • Tayyar al-Amal al-Esmali
  • February 14th Coalition, consisting also of a number of other groups

THE GULF

The Gulf Hezbollah was established in 1984 under the supervision of IRGC Brigadier General Mohammad Mostafa Najjar (Iran’s former defense and interior minister from 2005 to 2013). Its range of activities covered countries south of Iran and the Persian Gulf.

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Secretary General of Islamic Jihad Movement meet Khamenei

PALESTINE

  • Islamic Jihad Movement
  • Saberin Movement, consisting of Shiite Palestinians and established in April 2014 with a logo very similar to that of the IRGC.

EGYPT

The Islamic Revolutionary Guards of Egypt was established in December 2012.

“If we ever need arms or money for our struggle, we will follow Hassan Nasrallah’s example in Lebanon,” said Mohamed al-Khedhri, the group’s secretary general.

KUWAIT

The Kuwait Hezbollah

Kuwait authorities last year deported 11 Lebanese and three Iraqi nationals for links with Hezbollah, according to the Gulf Times.

AFGHANISTAN

The Fatemioun Brigade is one of the most important entities providing new Afghan recruits for the IRGC’s war in Syria.

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PAKISTAN

The Zeinabioun Brigade, in addition to its fundamentalist activities in Pakistan, dispatches a significant number of its members to Syria in its support for IRGC combat missions.

Cost Estimate

Iran deliberately provides no report on the abovementioned groups’ expenses as part of its economy. Estimates provided by Western sources reflect only a small percentage of these expenses. For example, a July 2015 Congressional Research Service report estimates the expenses of these groups, and Iran’s financial support for the Bashar Assad regime, at $3.6 to $16 billion, of which $300 million is allocated to proxy militia groups. However, their expenses cannot be so low when the afore-mentioned groups are involved in a series of widespread foreign wars on Iran’s behalf.

  1. About Iraq, the Iranian regime pays members of its proxy group through monthly salaries, revealed a decade ago by the Iranian opposition National Council of Resistance of Iran (NCRI). This movement presented a list of 31,690 Iraqi elements of the IRGC, all receiving salaries from Iran.
  2. Iran is providing the financial and arms resources for over 80,000 PMF members in Iraq, according to an October 2016 Agence France Presse wire.
  3. Providing the funds for IRGC-affiliated militias in Iraq takes place through technical and construction support or charities.
Rostam Ghasemi

Rostam Ghasemi

“To this day Iran has provided $5bn in technical and engineering support to Iraq,” said Rostam Ghasemi, former head of the IRGC’s “Khatam al-Anbia” base and once Iran’s minister of oil.

Entities, such as the Iran-Iraq Comprehensive Cooperation Department and the Iran-Iraq Economic Development Department established subsequently from 2005 onward, are facilitating Tehran’s efforts to fund the proxy groups.

  1. In Yemen, Iran is providing for all the Houthis’ expenses and arms. The Houthi missile unit now enjoys ballistic missiles and weapons-carrying drones, all provided by Iran.
  2. Four Iranian vessels carrying weapons for Yemen were confiscated in the span of the last 18 months, according to Vice Admiral Kevin M. Donegan, Commander of the U.S. Naval Central Command in his remarks with reporters. (AFP, 27 October 2016)

Five arms consignments sent by Iran have been confiscated by Australian, French and American naval forces, according to a report presented by special experts of a U.N. working group (established based on UN Security Council Resolution 2140). Two commercial ships carrying Iranian weapons were confiscated by Saudi Arabian forces. (Asharq al-Awsat, 31 January 2017)

Hassan Nasrollah Khamenei

Hassan Nasrallah meet Khameni

  1. The Lebanese Hezbollah, according to its current secretary-general Hassan Nasrallah, receives all its funds and arms from Iran.

“The Islamic government in Iran has relieved us of any need of money in the world,” Nasrallah said in a public speech delivered in 2012. (Al-Alam, Iran’s official Arab-language TV station, 7 February 2012)

  1. On 8 October 2013, Le Figaro cited Lebanese sources estimating Iran has provided Hezbollah $30 billion dollars over the past 30 years.

An analysis of various report delivers the following conclusion:

Iran’s financial support for various proxy groups
Groups Annual financial support estimate
Dozens of Shiite groups in Iraq $1.5 -$3 billion
Houthis in Yemen $1.5 -$2.5 billion
Lebanese Hezbollah $1 -$1.5 billion
Afghan Fatemioun $150 million
Pakistani Zeinabioun $100 million
Militias spread in Gulf countries $300 -$500 million
IRGC militias in other countries $100 -$300 million
TOTAL $4.65 -$7.8 billion

This short study provides a perspective into the effort the Iranian regime expends to wreak havoc and advocate Islamic fundamentalism across the Middle East through a wide spectrum of proxy groups. And the Iranian people are feeling the damage directly, as such funds, parallel to the billions poured by the mullahs into their nuclear program, ballistic missile ambitions, and domestic crackdown machine, have left the majority of the country living in deep poverty.

If the West seeks to support the Iranian people, the first necessary measure is to designate the IRGC as a terrorist organization to severely limit Iran’s malignant activities.

Ehsan AminolRoaya 2Mohammad Amin (@EconomieIran) is a senior research fellow for the Paris-based Fondation d’Etudes pour le Moyen-Orient (FEMO) or Foundation for the Study of the Middle East. He has written several books and essays about the ruling theocracy, the transformation of Iran’s political economy under the presidency of Mahmoud Ahmadinejad, and the rise of Islamic fundamentalism in the Middle East.

Feature Foto: Credit by Safin Hamed 

About Mohammad Amin (3 Articles)
Mohammad Amin (@EconomieIran) is a senior research fellow for the Paris-based Fondation d'Etudes pour le Moyen-Orient (FEMO) or Foundation for the Study of the Middle East. He has written several books and essays about the ruling theocracy, the transformation of Iran’s political economy under the presidency of Mahmoud Ahmadinejad, and the rise of Islamic fundamentalism in the Middle East.

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