Page 32 - INSS | 2019-2020

The Internal Arena

Over the past year, the Iranian regime seems to have been successful
in stabilizing the socioeconomic arena. Alongside the continued poor
economic indicators in the fields of inflation and unemployment, a high
negative growth rate, and the collapse of its currency in the second half
of 2018 and early 2019, the Iranian economy appears to be stabilizing
and adapting to the sanctions regime. The International Monetary Fund
estimates that inflation in Iran will begin to decline starting in 2020, and
real growth, even if minimal, will begin. However, these macroeconomic
figures do not improve the lives of citizens who took part in large scale
and violent public protests in November 2019 (at some 150 locations
throughout Iran), which focused on economic issues and antipathy
toward the regime. As in the past, this time too the regime succeeded in
suppressing the protests, using repressive measures and taking a heavy
toll in lives (with hundreds killed) and making extensive arrests.

The past year has also been characterized by the strengthening of the conservative camp, led by Supreme Leader
Ali Khamenei, who made a series of important appointments to reinforce the conservative control of the state. The
most prominent among them was the appointment of radical cleric Ebrahim Raisi as Chief Justice (March 2019),
in a step that some see as signaling the potential future successor of the Supreme Leader. In addition, the radical
Hossein Salami was appointed Commander of the Revolutionary Guards, and conservative figures were appointed
as heads of parliamentary committees. All of these steps are a precursor to the parliamentary elections in February
2020 and the presidential elections in 2021, as well as groundwork for the day after the current Supreme Leader.
In effect, the appointments weaken the more pragmatic camp, whose representatives include President Rouhani
and Foreign Minister Zarif, who are forced to toe the line with respect to the strict policy led by the Supreme Leader.

The Main Challenges for Israel

On the eve of 2020, the overall balance scale for Iran is a mix, but with achievements outweighing failures. Iran
displays greater confidence in exerting its power in the regional arena and even against the United States; this stance
will be tested following the killing of Soleimani. When it comes to the nuclear issue, Iran does not feel isolated and
even believes that it has succeeded in isolating the United States. It assesses that it will be able to cope with its
economic distress and the continued sanctions, while the United States is close to exhausting the stock of sanctions;
it is advancing the nuclear program and accumulating bargaining chips for the future.

All of these underscore the failure of Western policy, which was based on inflicting economic damage that would
create unrest among the Iranian public and in turn influence the policy of the regime.

The main challenge for Israel vis-à-vis Iran is to formulate a strategy that will allow the use of force in various theaters
and on different levels, without escalating into a broad conflict. In tandem, Israel must build a credible option for
the use of direct force in Iran and formulate understandings with Washington regarding three scenarios that are
problematic for Israel.

The first is negotiations between the United States and Iran, which could provide Tehran with the right to enrich
uranium, without any concession in return regarding its surface-to-surface missiles and regional activity.

T he second is escalation between Israel and Iran.

The third is Iran’s progress in its nuclear program while it continues to accumulate fissile material and reach
higher enrichment levels, which would lead to a significant change in the time required for a potential breakout
to nuclear weapons.

On these three central issues, there is a gap between Israel’s interests and those of the United States, and specifically
those of President Trump.

30 STRATEGIC SURVEY FOR ISRAEL