Seven Ways Iran Spends its Money in the Syrian War

Fighters run for cover as a tank shell explodes during heavy fighting in Syria. (Reuters)
Fighters run for cover as a tank shell explodes during heavy fighting in Syria. (Reuters)
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Seven Ways Iran Spends its Money in the Syrian War

Fighters run for cover as a tank shell explodes during heavy fighting in Syria. (Reuters)
Fighters run for cover as a tank shell explodes during heavy fighting in Syria. (Reuters)

“Get out of Syria! Think about our plight!” This was one of the slogans canted during last December’s nationwide protests in more than 100 Iranian cities.

Seven years ago when Iran started getting involved in the Syrian conflict the narrative promoted by the authorities was that Iran was going there to protect “the Shi’ite holy shrines” against attacks by “Sunni extremists”, a defensive strategy, and would not become involved in the broader struggle for power between regime leader Bashar al-Assad and his opponents. Falling victim to mission creep, however, Iran was quickly re-cast as the chief guarantor of the survival of the regime, an objective labeled as “vital” for Iran’s own security.

Russia’s involvement two years after the Syrian conflict had started, and President Vladimir Putin’s quick emergence as the key setter of agenda in Syria, punctured the myth of Iran as the key player in Syria. That, in turn, has inspired complaints, at first sotto voce, but more recently openly, about the reasons for what Islamic Majlis member Mahmoud Sadeqi in Tehran has dubbed “our Syrian adventure.”

President Hassan Rouhani has tried to re-tell the Syrian story by claiming that Iran was showing a high degree of altruism by helping “our Syrian brothers in need.”

“Even in harsh circumstances we cut our own needs in order to help our Syrian brothers,” he said last month.

With the high number of human losses sustained by Iran and “allies” including Lebanese, Pakistani and Afghan mercenaries admitted officially, the question that people now ask is focused on the financial cost of “our Syrian adventure.”

Iran’s financial commitments in Syria could be divided into seven categories.

The first consists of the value of arms and other military materiel supplied by Iran to forces supporting Assad. These include Iranian-made surface-to-surface missiles modeled on the Chinese Silkworms originally developed for use at sea. Another major item consists of armored cars of which Iran is reported to have delivered over 400 to replace losses sustained by Assad’s elite 4th Armored Division. According to estimates by researchers in Iran, Iran has also supplied Assad with over 500 pieces of Russian-made heavy artillery for use against urban centers.

Because of many of the arms supplied to Syria come from Iran’s own stocks, often dating back to years, it is hard to put a price on them. It is even possible that Iran has tried to recycle its old arms as part of a broader plan to renew its arsenal of weapons.

However, some analysts, including Reza Saberi, claim that arms supplied by Iran could be valued at around $1.2 billion.

The second item on Iran’s expenses’ list in Syria consists of delivery of oil and petroleum products to Assad forces. This is done in the context of a credit line that Iran has opened for Syria. The most credible figure cited by the Iranian media puts the size of that “line” at between $2-3 billion a year. The total “credit line” allows for up to $6 billion a year and includes food and medical supplies which Iranian Foreign Minister Mohammed Javad Zarif has put at around $2.5 billion a year.

The third item in Iran’s “Syria expenses” list consists of what the central Bank of Iran calls “transfer funds”. This means Iran exporting a certain quantity of its own oil on behalf of Syria with the understanding that Syria will repay in due course in an interest-free arrangement.

According to Jesse Shahin, spokesman for the office of Staffan de Mistura, the United Nations’ Special emissary on Syria, the “transfer funds” amounts to Iran giving the Assad regime an average of $6 billion a year, sums largely spent on paying civil servants and the forces still more or less loyal to the regime.

The fourth item in Iran’s expenses consists of “emergency funds” made in 2012 and 2103. According to Nadim Shehadah, professor at the Tufts University in the US, cited by BBC researcher Ali Qadimi, that amounted to $14-15 billion.

Tehran sources say the “emergency funds” were disbursed with the help of Austrian and Italian private banks over 30 months in tranches of $300 to $1.2 billion.

The fifth item of Iranian expense consist of funds needed to maintain several paramilitary forces made up of “volunteers for martyrdom” from Afghanistan, Pakistan and, in much smaller numbers, Iraq. The umbrella organ for these forces is the so-called Fatemiyoun Division, formerly a brigade, which was built up to 12,000 men in 2016.

At the time, General Qasem Soleimani, Commander of the Quds Corps, the organ that is supposed to coordinate Iranian operations in Syria, claimed that “volunteers for martyrdom” received no more than $100 a month in cash.

However, several Majlis members, speaking on condition of anonymity, claim that the payment is closer to $1,000 a month as Quds Corps also pays “subsistence pay” to families of the “volunteers for martyrdom.” All in all, the Fatemiyoun Division and ancillaries cost Iran around $1 billion a year. That does not include the $800 million paid annually to the Lebanese branch of “Hezbollah” led by Hassan Nasrallah.

A sixth source of income to finance the war on Assad’s side is provided by what Tehran terms bilateral trade. Much of this, of course, is more in the nature of transit trade with Iranian companies selling Syria’s oil and gas and phosphate to third countries. According to General Yahya Rahim Safavi, a military adviser to “Supreme Guide” Ali Khamenei, in addition to that trade Iran has won a major mobile phone contract in Syria with the prospect of creating a major new source of income to finance the war.

A major source of income for Assad consisted of money spent by over 1.2 million Iranian pilgrims, who visited Syria each year prior to 2011. However, the flow of pilgrims has almost completely dried up with Iranians preferring to visit “holy shrines” in Iraq. Meanwhile, some of the infrastructure, including over 100 hotels, built with Iranian money have either been badly damaged or left abandoned in previously peaceful areas turned into battlefields.

According to some studies, Iran’s losses on that score could be put at over $2 billion as much of the infrastructure may no longer be recoverable.

A seventh source item of cost for the Syrian war is represented by what Iran spends on keeping around 13,000 of its own troops, often presented as advisers or technicians, in Syria. No official figures are available. But if Iranian troops in Syria receive the same treatment as comparable military ranks inside Iran itself the annual cost could be around $3 billion in salaries and upkeep, not taking into account the cost of weapons and materiel used. The most conservative estimate would see Iran spending an average of $12.7 billion a year in Syria of which less than $2 billion may be recovered in trade deals using Syrian energy and raw material.

According to Tehran sources, part of the funds needed is raised through a special one per cent tariff imposed on all car imports in Iran with the proceeds credited to a special “Resistance Account” controlled by the office of the “Supreme Guide”.

Another source of funds is provided by “voluntary donations” supposedly for the defense or rebuilding of “shrines ”. Under that scheme 26 of Iran’s 31 provinces are assigned quotas to fulfill by raising funds from local businesses and through donations collected at mosques and bazaars. Provinces with a Sunnis majority are excluded from the scheme. As these “donations” are collected by local Friday prayer leaders, it is hard to know what percentage is actually transferred to the central fund and how much is kept by the involved clerics themselves.

Tehran University Professor Sadeq Ziba-Kalam recently invited the leadership in Tehran to review involvement in Syria. He was rewarded with a prison sentence of 18 months.

Nevertheless, many Iranians are beginning to realize that Syria is a costly war, both in terms of human losses and financial burden. And that, some analysts, believe is already encouraging a re-think of what some Iranians regard as a losing strategy.



25 Years of Unanswered Questions in Iraq

A Saddam Hussein mural is seen in Baghdad in 1991. (Getty Images)
A Saddam Hussein mural is seen in Baghdad in 1991. (Getty Images)
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25 Years of Unanswered Questions in Iraq

A Saddam Hussein mural is seen in Baghdad in 1991. (Getty Images)
A Saddam Hussein mural is seen in Baghdad in 1991. (Getty Images)

People in Iraq often wonder dejectedly: What if Saddam Hussein were alive and ruling the country today? Many will reply with fantastical answers, but Saddam’s era would have responded: Iraq is isolated, either by siege or by a war that he launched or was being waged against him.

Many people cast doubt on whether actual change has been achieved in Iraq since the US invasion in 2003. The invasion ousted the Baath version of Iraq and Saddam was executed in December 2006, leaving questions to pile up over the years with no one having any answers.

After a quarter century, Iraq is accumulating questions. It casts them aside and forges ahead without addressing them. At best, it reviews itself and returns to that moment in April 2003 when the US launched its invasion. Or it asks new questions about the 2005 civil war, the armed alternatives that emerged in 2007, how ISIS swept through the country in 2014, or the wave of protests that erupted in 2019. It also asks new questions about Iran’s influence in the country that has persisted for decades.

The questions are many and none of the Iraqis have answered them.

A US marine wraps the American flag around the head of a Saddam Hussein statue in Baghdad. (Reuters file)

Saddam and the alternative

The September 11, 2001, attacks shook the United States and the entire world. They struck fear in Baghdad. Saddam had that year claimed that he had written a book, “The Fortified Castle”, about an Iraqi soldier who is captured by Iran. He manages to escape and return to Iraq to “fortify the castle”.

The terrifying Saddam and the terrified Iraqis have long spun tales about escaping to and from Iraq. It is a journey between the question and the non-answers. That year, when Baghdad was accused of being complicit in the 9/11 attacks, Saddam’s son Uday was “elected” member of the Baath party’s leadership council. The move sparked debate about possible change in Iraq. Bashar al-Assad had a year earlier inherited the presidency of Syria and its Baath party from his father Hafez.

The US invaded Iraq two years later and a new Iraq was born. Twenty-five years later, the country is still not fully grown up. Twenty-one years ago, on April 9, 2003, a US marine wrapped the head of a Saddam statue in Baghdad with an American flag. The Iraqis asked: why didn’t you leave us this iconic image, but instead of an American flag, used an Iraqi one?

Baghdad’s question and Washington’s answer

As the Iraqis observe the developments unfold in Syris with the ouster of Bashar from power, they can’t help but ask how this rapid “change” could have been possible without US tanks and weapons. Why are the Syrians insisting on celebrating “freedom” every day? They are also astonished at the Syrians who scramble to greet Abu Mohammed al-Golani, who has not yet managed to put this image behind him and fully assume his original identity of Ahmed al-Sharaa. The Iraqis wonder how the Syrians are managing this transition so far without a bloodbath.

They ask these questions because the Iraqis view and judge the world based on their own memories. They keep asking questions and await answers from others instead of themselves.

The Iraqis recall how in August 2003, after four months of US occupation, that the Jordanian embassy and United Nations offices were attacked, leaving several staff dead, including head of the UN mission Sergio de Mello. The Americans arrested Ali Hassan al-Majid, or “chemical Ali”, Saddam’s cousin, and 125 people were killed in a bombing in al-Najaf, including Shiite cleric Mohammed Baqer al-Hakim.

During that bloody month, the Iraqis asked questions about security, forgetting about Saddam’s alternative, democracy and the promised western model. Later, the facts would answer that the question of security was a means to escape questions about transitional justice.

Sergio de Mello (r) and Paul Bremmer (second right) attend the inaugural meeting of the Iraqi Governing Council in Baghdad on July 13, 2003. (Getty Images)

The question of civil war

Paul Bremer, the American ruler of Iraq, once escorted four opposition figures to Saddam’s prison cell. They flooded him with questions. Adnan al-Pachachi, a veteran diplomat, asked: “Why did you invade Kuwait?” Adel Abdul Mahdi, a former prime minister, asked: “Why did you kill the Kurds in the Anfal massacre?” Mowaffak al-Rubaie, a former national security adviser, asked: “Why did you kill your Baath comrades?” Ahmed al-Halabi simply insulted the former president. Saddam recoiled and then just smiled.

Saddam’s opponents left the prison cell with answers that should have helped them in running the transitional justice administration, but they failed.

The following year, Washington appointed Ayad Allawi to head the interim Iraqi Governing Council (IGC) that had limited jurisdiction so that it could be free to wage two fierce battles: one in Najaf against the “Mahdi Army”, headed by Moqtada al-Sadr, and the other against armed groups comprised of “resistance fighters” and “extremists” in Fallujah.

The opposition in the IGC got to work that was already prepared by the Americans. They outlined the distribution of Shiites, Sunnis and Kurds in the country, with historic questions about the majority and minority, and the “oppressed” now assuming rule after the ouster of the “oppressors”.

On the ground, the Ghazaliya neighborhood in western Baghdad with its Shiite and Sunni residents was in store for a bloodbath. On a winter night in 2005, an entire family was massacred and an enfant strangled to death. Soon after, lines drawing the Shiite and Sunni sections of the neighborhood emerged. The popular market became the tense border between the two halves. Two new rival “enemies” traded attacks, claiming several lives.

In Baghdad’s Green Zone, the IGC drew up a draft of the transitional rule. In January 2005, 8 million Iraqis voted for the establishment of a National Assembly.

Meanwhile, different “armies” kept on emerging in Baghdad. The media was filled with the death tolls of bloody relentless sectarian attacks. Checkpoints manned by masked gunmen popped up across the capital.

Those days seemed to answer the question of “who was the alternative to Saddam.” No one needed a concrete answer because the developments spoke for themselves.

Nouri al-Maliki came to power as prime minister in 2006. He famously declared: “I am the state of law” - in both the figurative and literal sense. Iraqis believed he had answers about the “state” and “law”, dismissing the very pointed “I” in his “manifesto”.

Nouri al-Maliki. (Getty Images)

The Maliki question

The American admired Maliki. Then Vice President Dick Cheney had repeatedly declared that he was committed to the establishment of a stable Iraq. Before that however, he had dispatched James Steele - who was once complicit in running dirty wars in El Salvador in the mid-1980s - to Baghdad to confront the “Sunni rebellion”. Steele set up the Shiite “death squads”. Steele was the man in the shadows behind Ahmed Kazim, then interior minister undersecretary, and behind him stood the new warlords.

In 2006, the political process was shaken by the bombing of the Al-Askari Shrine in Samarra. Questions were asked about the “need” to draw up new maps. Shiite high authority Ali al-Sistani said in February 2007 that the Sunnis were not involved in the attack. In July 2013, Maliki denied an American accusation that Tehran was behind it.

In those days, Maliki’s ego was growing ever bigger, and Steele’s death squads were rapidly growing greater in numbers.

The Iran and ISIS questions

Maliki tried to save himself as one city after another fell into the hands of ISIS. On June 9, 2014, as ISIS was waging battles in Mosul, Maliki met with senior Sunni tribal elders based on advice he had not heeded earlier and which could have averted the current disaster.

It was said that he made reluctant pledges to them and a third of Iraq later fell in ISIS’ hands. Sistani later issued a fatwa for “jihad” against the group, which later turned out not be aimed at saving the premier.

Maliki left the scene and Qassem Soleimani, commander of Iran’s Revolutionary Guard Corps’ (IRGC) Quds Force, took over. Successive prime ministers would know from then on what it is like to be shackled by Tehran’s pressure as IRGC officials made regular visits to their offices.

Soleimani reaped what Steele sowed. By 2017, armed factions were the dominant force in Iraq. Running in their orbit were other factions that took turns in “rebelling” against the government or agreeing with its choices.

Today, and after 14 years, Iran has consolidated what can be described as the “resistance playground” in Iraq that is teeming with armed factions and massive budgets.

Protesters in Baghdad’s Tahrir Square in October 2019. (AFP)

The October question

The Iraqis were unable to answer the ISIS question and the armed factions claimed “victory” against the group. Many ignored Sistani’s “answer” about whether the Popular Mobilization Forces (PMF) was there to protect Iraq or just its Shiites.

Exhausted Iraqis asked: “What next?”

Next came Adel Abdul Mahdi’s government in October 2018. It was weighed down by unanswered questions and a year later, thousands of youths took to the streets to protest the state of affairs in Iraq, specifically the dominance of armed groups.

They were met with live bullets. Many were abducted and others were silenced. Abdul Mehdi acquitted the killers, saying instead that a “fifth column” had carried out the bloody crackdown on protesters.

After he left office, some Iraqi politicians were brave enough to tell the truth, dismissing former PM’s acquittal and pinning blame on the factions.

Sistani called for PMF members to quit their partisan affiliations. His demand was left unheeded. Mustafa al-Qadhimi became prime minister in May 2020. He left office months later, also failing in resolving the issue of the PMF and armed factions.

By 2022, everyone had left the scene, but Iran remained, claiming the Iraqi crown for itself, controlling everything from its finances to its weapons.

Question about post-Assad Syria

On December 8, Syria’s Bashar fled the country. Everyone in Iraq is asking what happens next. The whole system in Iraq is at a loss: Do we wait for how Tehran will deal with Ahmed al-Sharaa, or do we ask Abu Mohammed al-Golani about his memories in Iraq?

The Iraqi people’s memories are what’s ruling the country, more so than the constitution, political parties and civil society because they are burdened with questions they don’t want to answer.

And yet they ask: What if we weren’t part of the “Axis of Resistance”? Iraq’s history would reply that it has long been part of axes, or either awaiting a war or taking part in them.