Iran and Syria: a bleak outlook. Iran's economic rating has been downgraded by London's Fitch agency from BB- to B+: 'The agency said that while economic sanctions against Iran were still some way off, the risks were increasing, leaving the economy vulnerable, especially in case of an oil price fall as structural reforms in the country have also faltered. '"The downgrade reflects the escalating confrontation between Iran and the international community over Iran's nuclear programme," Richard Fox, Head of Middle East and Africa sovereign ratings at Fitch (UK) said in a statement.' Syria's economic picture isn't looking so good either, according to The Intelligence Summit: 'The consequences of the assassination in February of the former Lebanese prime minister, Rafiq al-Hariri, continue to overshadow Syria’s political outlook. A report mandated by the UN Security Council has appeared to confirm widespread international suspicion that Syria was responsible for the killing. If Syria refuses to co-operate with the continuing investigation it will almost certainly face international sanctions. Co-operating, however, may be even more hazardous, particularly as the inquiry is likely to lead to charges being levelled against very senior figures within the regime. Economic policymaking will gain little attention within this environment, and economic growth will be weak, slowed by declining oil output. The buoyant outlook for oil prices over the coming year will ensure that the government finances remain comfortable and the trade and current accounts stay in surplus next year. The position will weaken in 2007, however, as falling production compounds the impact of lower oil prices. ... The increasingly threatening political environment that Syria faces has led us to adjust our forecast for economic growth downward since our previous report.' (This unattributed report appears to come from The Economist.) Reuters via Iran Focus reports: ' Iran will cancel the 960 million euro ($1.19 billion) "Olefins 11" contract signed last year with German industrial gases firm Linde and South Korea's Hyundai, Iran's Oil Ministry Web site reported on Monday. Under the Olefins 11 contract, the two companies were to build two ethane crackers in the Gulf port of Assaluyeh. Conservative parliamentarians had argued that Iranian firms could carry out the project more cheaply.' (various)
JINSA: Iran's bid for hegemony. Jonathan Howland at JINSA: 'W While the international community focuses on Iran’s nuclear ambitions officials f the Islamic Republic have been busy exercising their rapidly increasing influence - fuel d by more than a decade of a lucrative petroleum sales and accelerated by the removal f Iraq as a regional counterweight - in the Persian Gulf and on the international stag . Complicating matters is Iran’s control of the terrorist group Hezbollah in Lebanon a d increasing sway over the now ruling terrorist Hamas organization in the West Bank a d Gaza. The ability to frustrate Israeli-Palestinian peace making coupled with increasi g its political, economic and military influence, means that Iran is well on its way towa d dominating the wider region. ... Following the alarming mid-April announcement by Iranian President Ahmadinejad that Iran had mastered the enrichment process and entered the nuclear club, the Pentagon has announced a number of initiatives designed to defeat underground facilities like those increasingly in use around the world, including Iran. The Department of Defense has also been arming munitions with earth-penetrating warheads designed to burrow well beneath the surface of the earth before exploding, in order to collapse underground bunkers. On June 2, 2006, the Department of Defense’s Defense Threat Reduction Agency will conduct an experiment, Divine Strake, at the U.S. Department of Energy’s Nevada Test Site. It will consist of the detonation of 700 tons (TNT equivalent to 593 tons) of the explosive ammonium nitrate-fuel oil (ANFO) on the ground above an existing tunnel at the site constructed for other research efforts. ANFO is commonly used in mining and blasting operations, and the amount of explosive being used in the experiment was selected to cause various levels of damage to the tunnel. The experiment supports DoD’s Tunnel Target Defeat Advanced Concept Technology Demonstration, which is intended to improve the military’s confidence in its ability to plan to defeat hardened and deeply buried targets.' Full article at the link. (JINSA)
In from the Cold: Weekend roundup. Spook 86:
First, there was the announcement that Russia is selling the advanced S-300P air defense system to its neighbor, Belarus. On the surface, that doesn't seem surprising. Among its former republics, Belarus has maintained the closest military ties to Moscow. Last October, Russian officials announced that the two nations would essentially merge their air defense networks, giving Moscow more defensive depth along its western borders. Under that arrangement, using common missile systems, radars and C2 networks certainly makes sense. The sale of the S-300 was hardly unexpected; there had been talk of such a deal for more than six months.
But there may be more to this transaction than meets the eye. According to some reports, Belarus plans to acquire at least a full brigade of S-300s (NATO designator: SA-20). That's more than sufficient to cover the country's airspace, considering that Russian batterys cover portions of Belorussian territory as well. Then, there's the cost factor. A single S-300 battery costs upwards of $300 million, and the Belarus economy is essentially stagnant. In other words, buying a full brigade would seemingly be beyond Minsk's financial reach, unless the Russians have arranged highly favorable terms (such as an arms-for-debt swap), or someone else is helping to finance the purchase.
And who might that someone be? ...
Morning Report knows the suspense is killing you. Read the rest at the link. (IFTC)
Cross-posted at Dreams Into Lightning - TypePad.
