Exorbitant cost: war bill in Syria on Russia and Iran

Situations  in the Middle East  have taken  a new trend. The war today is ticking its drums and armies mobilize its capabilities  , All for the battle may be long range and turned the region into a hotbed  for inflamed  conflict.
In the context of this situation which is developing steadily,  the cost of these battles raise  on the countries that have neglected the needs of their people and indulged in foreign wars on the account of the  interests of its citizens  and economies, and here we will review the reflection of any possible war on both Russia and Iran.

– Russia

after years of  diplomatic mobilization and Russian military support  toward the Syrian crisis and sent  fighter jets and other developed ammunition   to Syria to fight the alleged  terrorism,  the first raids of Russian fighter jets were launched on the  30 th  of  September 2015 , bombing  the Syrian opposition sites  and  the Syrian crisis enters  to a new turn.

with the continuing collapse of oil prices, in conjunction with the cost of Russia’s military action in Syria and  the west economic sanctions , it seems that the Russian economy began to decline, which Putin is trying to hide it .

the Russian economy  was negatively affected   , which is heavily dependent on oil,   due to the sharp decline recorded in oil prices, and the sanctions imposed by the United States and the European Union on  Moscow after the Ukrainian crisis .

The Russian Central Bank  introduced through its monthly report, perceptions of the nightmare scenario that Russia will face  in 2016, if oil prices continue at low levels.

the frightening scenario of  Moscow is  in the stability of the average oil price in the next year at a level of $ 35 a barrel, which would mean a continuation of the economic recession for the second  year respectively , with  the shrinking of gross domestic product  by between 2 and 3 percent.

the political decision-maker tries  in Russia to deafen ears and closes  his eyes for the internal situation of the country in which it  lives an economic and financial crisis as a result of factors and the most important   of  it  is the collapse of  oil prices to below the $ 30 a barrel, factors which are a  harsh slap to the Russian economy overburdened  years ago, but why  the collapse of oil prices  is a big problem to this extent  for Russia? Russian Finance Minister has said that the state budget will not register   a balance, but only  when the price of a barrel of oil reaches  to $ 82 a barrel.

Official data for the body of official statistics in Russia revealed a contraction of the economy of Russia by 3.7% over the past year in 2015, which  the Russian economy  was significantly affected by the decline in oil prices and Western sanctions.
Russian President Vladimir Putin has announced that the gross domestic product was shrank in 2015, and called Russia for readiness to all ” scenarios ” due to the  low oil prices.
Alex Ksarov , a senior analyst at the international research Foundation (IHS) “, based in London, said the escalation of Russian attacks in Syria, and the great support provided to the Syrian regime, raising Moscow’s spending bill during the period of 30 September  and the twentieth of the last October  on the military operations  carried out there reached   between 80-115 million dollars, while the cost of air strikes and  Russia’s  mobilized military between 2.4 to 4 million dollars a day, and  it is believed that the daily cost of flight Russian fighter jets at a rate of ninety minutes, and helicopters nearly an hour, rose to 710 thousand dollars, and that Russian warplanes drop  bombs and shells daily , estimated to cost about 750 thousand dollars,  and  the daily expenditures of logistics   to 1,500  Russian military in Syria,  reached  to about 440 thousand dollars.
according to estimates as the daily cost of the units in Tartus base on the Mediterranean in Syria, and the base in the Caspian Sea were amounted  about two hundred thousand dollars, while  believed that the cost of daily expenses for the activities of intelligence, communications and other logistical matters of Russia  in Syria  will rise to 250 thousand dollars.
According to figures released by the group. ” A, Eich ,S Gaines “in October , said that the war effort as a whole – including marine, land and air activities will cost Russia about billion dollars a year, with the exception of potential aircraft losses.
some estimate that the figure is more – double number-  which currently stands at three times to that figure. Also, Moscow has deployed additional units to defend against missiles since the report, “Gaines”, including the S-400 systems that require more vehicles and individuals.
On the other hand,   experts  in economic affairs see that Moscow to cut off economic relations with Turkey, and the freezing of some of the  joint investments   projects, which would exacerbate the deteriorating of  economic situation of Russia, where they will lose the largest markets that cooperate with it , both in terms of exports or imports.
this massive expenditures that will plague the Russian economy, according to what  economic observers see , Russia will not bear all these costs in conjunction with lower oil prices.
economic experts agree that Russia will resort to the withdrawal of the cash reserves of $ 346 billion, and to get  long-term foreign loans due to the economic sanctions, and of course , this reserve  will record new downs, which led to the decrease again of   parity value of the ruble and rising  of inflation. ”
as mentioned earlier, the federal budget balance depends on the sale of a barrel of oil at more than eighty dollars, which is currently almost impossible. But the fiscal deficit is not the only   Russian financial problem which is  suffering from the weakness of industry attention and high military spending, which accounts for the continued and sharp deterioration of the standard of living of citizens and the ruble exchange rate.

With the continuing decline in oil prices to record levels, it seems that the Russian economy began to collapse, in conjunction with the cost of Russia’s military action in Syria, at a time when the world imposes the economic sanctions on Russia, which could have led to its collapse.
We refer here to the very secret study of  the US Department of energy and addressed to the Foreign Ministry on 10.24.1984 stating that “our policy should be directed  towards the drop in oil prices of 30-40% and that for the recovery of  US economy.”
a goal of reducing oil prices in 1984 was not only to stimulate the US economy, but there was another target of exhausting  the Soviet Union, which was fighting in Afghanistan, which analysts see the similarity with the reality of today, where the United States is seeking to wear down the Russian economy and  push for the loss of its  friends, especially with the involvement of Ukraine and the Syrian crisis, and its support for the regime of Bashar al-Assad and the bombardment of sites of Syrian opposition under the pretext of fighting terrorism.
the  poverty rates recorded a significant increase   in the current year with the direction of the economy to the recession by 4 percent in 2015,  that the  official data for the first nine months of this year showed that 20.3 million Russians, the equivalent of 14 percent of the total population, are living below the poverty line, an increase of 2.3 million people compared to the same period of 2014.
the rising  cost of Russian military operations in Syria, days after another, at a time when the Russian economy is shrinking because of international sanctions, and falling oil prices, which will lead to new pressures  it may enter the economy in the tunnel of economic crisis and possibly beyond than it .

– Iran

Iranhas  tried for decades to expand its influence circle in the Arab  area , which led them   to the support of  affiliated groups in a number of Arab countries where adopted primarily to support these gangs financially and with weapons and even soldiers without the direct  intervention .

Iran is preparing today  to engage in military confrontation along the Syrian regime led by Russia, but the most important question here, is the Tehran regime is fully aware the cost of entering into direct war? Is Tehran really has the financial capacity to equip armies and equipments and its consequences?

international sanctions against Iran were lifted  since short time  , where  the Iranian economy was suffered  from years of diplomatic and economic isolation and international sanctions which have worn out and deprived it of the billions of dollars that were frozen in Western banks, and  the major powers narrowed noose on Tehran  until the Iranian regime was subject  to its terms on its nuclear program.

the US newspaper predicted that the current political crisis between Saudi Arabia and Iran, which amounted to a severance of diplomatic relations between the two countries, to take also economic in nature, noting  that the Iranian economy is waiting for bad news and  bleak picture in this context .

according to the pursuit of the rawabetcenter for  research and studies that Iran losses  have reached during the oil boom of about 450 to 500 billion dollars because of the sanctions imposed on it in that period.

Los Angeles Times published an article by writer marc Dopoviz, confirming that the tension in the relations between Tehran and Riyadh leads to “economic war” that its helm tends  in favor of Saudi Arabia, and this is another dimension which is added to a series burdens which  Iran’s economy is plagued  to carry.

the international sanctions imposed on the country since 2007 have left  a difficult situation, and the costs of the war in Syria, which Iran has been involved in  since 2011, in addition to the costs of the war in Yemen and supporting the Houthis in Yemen and Lebanon’s Hizbollah guerrillas and militias in Iraq who also   inflict on  Iran a huge costs.

the Iranian economy is suffering from  a difficult situation, where it was recorded in the last year  a slight contraction  rather than achieving growth, while increasing the scope of poverty in the country to prove that 16 million Iranians live below the poverty line, and that the inflation rate exceeded l10.8% which means  the rise of the prices of the commodity and basic materials needed by the Iranians .

Frozen funds

Earlier, Iran’s deputy oil minister, Rukn al-Din Javadi acknowledged , that Tehran needed to nine months after  the actual lifting of the sanctions imposed on Tehran , so that they can sign the first contracts with foreign oil companies (except for American ones) after exiting from  the  circle of sanctions,  the French newspaper attributed  the matter to the banking restrictions.

The internal problems  and political conflicts among Iranian politicians, which were  intensified with the approach of parliamentary elections  scheduled for later of this month, and the oil conference in London was postponed , which is the fifth time because of the sanctions but at this time It seems that internal disagreements about the structure of the oil and gas investment contracts prevented any announcement of the  trade terms .

the  siege on the Iranian regime is intensified , especially with the suffocating economic conditions experienced by Iraq,  in which  both the Iranian and its followers  have benefited   , led by Hezbollah, which set up companies and factories in Iraq to take advantage of reconstruction efforts over the past decade, of  course, it    was  sponsored by the Iran and  made heavy ​​gains  in this direction.

The Iranian penetration   and exploitation of the Iraqi economy to this moment  has led to make it one of the worst economies in the Arab region, at least, make it a center for the conduct of the Iranian inferior goods, which invaded the Iraqi market, noting that the Foreign trade of Iraq has become mainly focused on Iran because of its near location and   its wide border with Iraq  and to the lack of other commercial alternatives.

Iraq, which was once served as Iran’s outlet in the time of sanctions but  today has  become  exhausted  economy, and unable to run  the country affairs ,  taking in to the consideration  that Iraq is  Rentier  country that oil accounts for 95% of its revenue  , and is today on the brink of the abyss because of oil prices, which have fallen horribly and need of support, therefore Iraq is  no longer  source of support for Iran.
Iranian weak budget does not enable them to provide the necessary funds to investment ,  what limits the growth opportunities  especially the regimes  and political risks are not favorable. For example, the oil minister said the oil  and petrochemical sector  needs $ 200 billion in the next eight years, and  in the  light of the financial and political conditions will not happen.
The entry of Tehran militarily directly will put  a very large consequences for the creaking  economy  originally in spite of allegations that  it is cohesive , and will eliminate any chance to achieve development that officials are talking about  in Tehran .
in conclusion,  we have to say that any  military confrontation in Syria is not in the interests of Russia and Iran. Both countries are full of  heavy economic burdens and internal problems, especially the Iranian regime, which recently came out from under the international sanctions and  any military action will dispel the  dreams of Iran  for  development which it seeks  noting that is  to say  the war in Syria will be open is  a sort of madness because that both  countries can not afford the burden of open war which could cost billions of dollars, especially with the presence of the sanctions suffered by the Russian economy as well as the fragility of the Iranian economy and corruption within the Iranian Revolutionary Guard Foundation.

Rawabet Research and Strategic Studies Center