Signal: Iranian Impasse – Politics on the Beach – Notes on Salvini

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-Ian

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IRAN AND THE US: NO EXIT

Early this morning the US government hit Iran with a raft of sanctions that make it illegal for companies to do any business with Iran involving precious metals, sovereign debt, airplanes, or cars. It also outlaws Iranian purchases of US banknotes and, for American lovers of Iranian pistachios and carpets, this is a very bad day – importing those is now forbidden again. 

These sanctions, to refresh your memory, had been suspended under the 2015 Iran nuclear deal which President Trump ditched earlier this year. 

Now they are back in place, and they’ll contribute to an economic crisis that could see Iran’s GDP shrink as much as 8% this year, a far cry from earlier expectations that fresh economic opportunities under the nuclear deal would boost growth. And greater pain awaits the Islamic Republic: in November, the US is set to reimpose a much harsher set of sanctions that target Iran’s energy sector, which is crucial for the economy. 

Is this economic pressure from the Trump administration the prelude to a breakthrough between Iran and the US? Don’t bet on it. 

First, Trump is demanding things that Tehran can’t realistically give.Leaving aside President Trump’s seemingly instinctive revulsion at anything that bears his predecessor’s fingerprints, Washington’s had three specific beefs with the Iran deal (which Tehran was adhering to, according to international inspectors and the US Defense Secretary): it expires; it allows Iran to test new ballistic missiles; and it doesn’t stop Iran from supporting proxy fighters in Syria, Yemen, Lebanon, and Iraq. 

Now, even if Tehran were willing to discuss the first two – which is somewhere between implausible and impossible -- the third would amount to a complete reorientation of Iran’s foreign policy and an inconceivable humiliation for a regime that bases its legitimacy in large part on resisting the historic, and continuing, attempts by Washington to alter Iran’s politics. 

In short, there isn’t a snowball’s chance in Ahvaz of Iran agreeing to what Trump (along with the Saudis and the Israelis) would want. Moreover, why, Iran’s president has already asked, should Tehran believe any commitments that Trump makes to a new deal after tearing up an old deal that was working? 

Second, domestic pressures aren’t going to change Iran’s position. It’s true that economic protests (a longstanding tradition in Iran) have recently intensified and taken on a political coloring, but the regime can still rely on loyal, efficient, and ruthless security services to keep things in check. What’s more, sanctions by the US give the government a convenient, if certainly not inexhaustible, excuse for the economic crisis. 

In short, unlike the Trump administration’s other major foreign policy tangles, there is no conceivable exit from the deadlock with Iran right now. Trade spats with China and the EU can, in principle, be resolved with deftly-packaged concessions and proper massaging of the relevant ego(s), not least because in each of those cases, both sides have lots to lose if things truly go off the rails. With North Korea, meanwhile, Trump and Kim seem committed to reaching some accommodation, even if that means artfully redefining terms like “denuclearization.” And even without a deal, the diplomacy can remain stalled indefinitely as both sides have already gotten a bit of what they want (Trump the pomp and splash, Kim the legitimacy and a fresh start with South Korea.)

But with Iran, there’s no clear way out. In fact, all signs point to a sharper escalation of tensions between the US, its regional allies, and Iran… Want to guess one area where that might happen sooner rather than later? My pal Kevin Allison will have some thoughts on that in tomorrow’s edition… 

NOTES FROM THE OLD COUNTRY: SALVINI’S SURGE

During my vacation in Italy these past few weeks, I managed to stay off Twitter and email, I swear. But I wasn’t above giving an occhiata to the local dailies. What jumped out at me most is the astounding political success of Matteo Salvini, leader of the rightwing Lega (“League”) party which currently governs in coalition with the leftish, anti-establishment Five Star Movement (M5S) in what has been called Western Europe’s first “all populist” government. A few observations and a thought…

First, of course, Matteo Salvini is not actually the prime minister. Nor is he head of the largest party in parliament (this distinction falls to labor and economic development minister Luigi DiMaio, who heads M5S). But a casual visitor would hardly know it. Salvini, is a ferociously nationalistic, anti-immigrant firebrand who, as interior minister, now runs the show on the ultra-divisive issue of migrant policy. He acts and is covered as though he were in fact “Salvini Premier” (a campaign slogan he still uses in public and on social media.) Simply put, Italian politics revolves largely around him. 

His direct language and shrewd use of social media only enhance his public profile, whether the coverage is good or bad. (While I was there he elicited huge outcry by a) quoting Mussolini and b) being portrayed as Satan by a Catholic magazine. All in a week’s work for Salvini.) 

Second, Salvini’s limelight role in Italian politics is helping his party immensely. Lega won 17 percent of the vote in March, but since then its support has surged to more than 30 percent, placing it roughly on equal footing now with M5S. Lega’s growth has come largely at the expense of the exhausted center-right Forza Italia party of Silvio Berlusconi – mirroring the success of other European right-wingers at weakening center-right establishment parties. But Lega’s surge speaks to the larger success that Salvini has had in transforming his party since he took charge in 2013. 

The Lega Nord (“Northern League”, as it was then known) was once a regional quasi-secessionist party that looked down on Southerners and considered the tax-taking central government in Rome as its main enemy. But Salvini has rebranded it as a fiercely nationalistic party that looks down on immigrants and sees the EU (particularly its policies on migrants and budget deficits) as its main enemy. That shift has helped the party to put down deeper roots even in the South, whose people Salvini once openly derided (and in song, at that.)  

Coupled with strong support from Northern industrialists and small town middle class folks who like its long-standing anti-tax message, Salvini is building a supple and potentially dominant coalition, with a well-organized party machine that the M5S folks, still newer to the scene, can only dream of. 

The big question as Salvini’s personal and party clout grows is whether the somewhat unnatural alliance between Lega and the M5S will turn into a more open rivalry and, in turn, what that might mean for Italy’s economy and its relationship with the EU. 

One smaller bonus question that may interest you is: what was Salvini thinking when he did this semi-nude centerfold piece for the Italian magazine Oggi in 2014? (Hat tip to my pal Fede Santi at Eurasia Group for this gem.) 

GZERO WORLD WITH IAN BREMMER: CYBER THREATS WITH DAVID SANGER

This week, Ian talks cyber warfare with Pulitzer Prize winning journalist David Sanger, and dishes on the horrific plight of Venezuela, which has produced more refugees than Syria over the past five years. Meanwhile, on Puppet Regime, Mark Zuckerberg wants you to swipe right...

THE IMPOSSIBILITY OF VACATION: SIGNAL ON THE BEACH

As you can see, your average Signalista has a tough time unplugging from the world of global politics, even on vacation. Even on the beach. Here’s a little window into what it’s like… a prose poem by yours truly and Willis Sparks. 

You’re on the beach. The sun blazes in a cloudless sky. Seagulls glide silently overhead. The soothing rush of the waves lulls you into a moment’s peace as you gaze at the water.. The level of the water. How much will it rise because of global warming in the coming decades. Three meters? Four? The fragmenting of the Paris Accords will definitely make it worse. 

Well, in the long run we’re all dead anyway. Wasn’t that Keynes? For now this will be a perfect day. August is the best…. A lot of world leaders probably hate August. The 1991 Soviet coup against Gorbachev happened in August. So did the ruble crisis seven years later, a national humiliation that helped lay the groundwork for a strongman like Putin to take charge. Nixon resigned in August 1974. I wonder what Robert Mueller is doing today. He’s probably wearing a tie..

The sky! That pristine blue dome. Above that blue are 1,700 satellites, used for navigation, military applications, and communications. The Chinese and Russians have developed technologies to shoot them down. President Trump is mulling a new Space Force to deal with it, though the Pentagon isn’t on board yet... 

Good thing this beach isn’t so crowded. Bondi beach in Australia is crowded. Too crowded. That country’s population surge (it’ll reach 25m people three decades earlier than expected) is straining cities, clogging up beach access, and fomenting a backlash against immigration that could really roil politics there… 

Pebble beach or sand beach? The age old question. China’s leaders are at the beach too. Every August, they spend two weeks privately plotting strategy at a beach resort called Beidaihe. It looks nice in the photos. Sand, it looks like. Wonder what they’re talking about today…. A face-saving compromise with Trump? How to keep North Korea on track? It’s hot. Maybe a dip in the water would be nice…

What beautiful water… What the… is that a garbage bag? That could kill a seagull! There’s a four-in-five chance that this bag  is from Asia, you know. That rapidly growing Asian middle class is buying more stuff and throwing out more trash than ever. The logistical and political hurdles to dealing with that problem are … what’s that smell? Is that… those kids are smoking weed! Are they vaping or is it a joint? What was that report about how Lebanon could bring in an extra $500m in export revenues if it legalized cannabis… 

It really is hot out here. I’m thirsty. Water is important. Hope India never tries to use its upstream control of so much of Pakistan’s water supplies for political purposes. Kaboom. Wonder what’s happening in Egypt’s dispute with Sudan and Ethiopia over Nile water resources. Maybe it’s time for lunch. . . 

HARD NUMBERS

1.2: Just 1.2 percent of Pakistan’s 208 million people filed income taxes during the country’s most recent tax year, with many politicians and government officials thought to be among those dodging payment. Add that to the list of economic challenges facing incoming Prime Minister Imran Khan.

10,000: Last September the UN Security Council barred governments from issuing new work permits to North Korean workers, as part of an international effort to increase financial pressure on Pyongyang. Since then, Russia has issued work permits for more than 10,000 North Koreans. 

9: About 9 million people died from pollution-related causes in 2015, according to a recent study in a prominent medical journal – half of them in Asia. India alone accounted for more than 2.5m of the deaths. It’s the downside of strong economic growth in a region that is still largely dependent on burning coal for electricity.  

15: People in Iran bought more than 15 metric tons of gold bars and coins in the second quarter of 2018 – triple the amount they purchased a year ago, as they braced for this week’s return of US sanctions. Iran’s currency, the rial, has lost about 50 percent of its value since the US pulled out of the 2015 Iran nuclear deal in May. 

0: The martial artist /action movie hero Steven Seagal has earned zero Oscar nominations for his work, but thanks to his outspoken admiration of Russian President Vladimir Putin he won Russian citizenship several years ago. Now the Kremlin has appointed him as a special envoy to the US. If Dennis Rodman can build bridges to North Korea, who among us will doubt the man who once uttered the words: “I’m gonna take you to the bank… The blood bank.” 

This edition of Signal was prepared with editorial support from Kevin Allison (@KevinAllison), Willis Sparks, and Edana Ng.