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Chapter 1: Methodology and data limitations

ResearchMethodology and data limitations

In order to answer the research questions, a number of activities have been carried out. Information on Iran’s financial support to the five conflict areas in the specified periods was sought in government publications, publications by political research institutes and think tanks, scientific research papers, reputable international financial and political media as well as national, regional and international media.

In identifying relevant data to be considered, special attention was given to the competence, objectivity and accuracy of the selected sources. It is essential to note upfront though that there is very little precise data on the amount of support provided by the Iranian government or other Iranian institutions allegedly involved in providing funding to militant groups considered in this assignment. Due to the general scarceness of substantiated data on financial links and volumes, it was decided to also consider anecdotal evidence or sources which may be influenced by political views.

1.1 Financial support to paramilitary groups

1.1.1 Quantifying support

There is broad consensus among experts that Iran is providing critical support to different paramilitary groups and repressive regimes in the Middle East. In some cases, this is also confirmed by the leaders of these groups or representatives of the Iranian regime. However, estimates on the value of these provisions vary considerably. Annual funding figures provided by different sources generally fall within the realm of speculation due to the lack of verifiable evidence.

The research thus had to rely predominantly on estimates provided by diverse sources and anecdotal evidence quoted in various publications. These can be political or intelligence experts on the ground in conflict-stricken countries or close to other governments. The US government and various US think-tanks in particular publish regular briefings and papers on various conflicts in the Middle East, including the role of Iran in them.

Estimates carry an inherent risk of under- or over-estimation. The political agendas of the institutions publishing such reports may also influence their conclusions.

When it comes to quantifying the actual financial volume of the support provided by Iran, institutions such as the Congressional Research Service or the US Department of State often refer to sources quoted in media reports. These can be persons close to the command of one of the militant groups or military or security experts in the concerned country. These sources are mostly anonymous. Often only the nationality or area of expertise is provided. US analysts, often connected to the US government or US think tanks of different political orientations, are regularly quoted.

The estimates provided by different sources are sometimes close or similar. At other times, however, the figures vary considerably. In addition, the available information suggests that, in various conflicts, the level of support fluctuates over time, influenced by political, strategic and economic developments. This research quotes several sources in order to identify ranges of overall support provided to the different groups, giving low and high estimates.

Iran provides the paramilitary groups in question not only with varying levels, but also with different types of support. Besides direct financial support, this can be in the form of training, strategic advice, military equipment and fuel supply. Additional types of assistance, which also contribute to a further spurring of conflicts while impacting negatively on the Iranian economy, are mentioned in the paper where specific information is available. The financial value of this support can in most cases not be separately quantified.

Another factor complicating the attempt to quantify financial support in specific conflicts is the fact that there is often an overlap between the different paramilitary groups in question and their geographic area of activity. This applies, for example, to Hezbollah, which is not only active in Lebanon, but also sizably involved in the conflict in Syria, fighting alongside the troops of Syrian President Bashar al-Assad and the Iranian-supported Shia militias from Iraq. This inter-connection means that financial flows cannot necessarily be assigned to one group or one conflict.

1.1.2 Sources of financial support

Not only is it difficult to identify the level of support provided, it is also difficult to specify the actual source of funding. The budgets published by the Iranian government are not transparent enough to allow drawing conclusions on, for example, a specific ministry providing funds to one of the researched groups. Many analysts and experts doubt that the transparency and completeness of the published fiscal breakdowns realistically reflect the actual flow of funds. As with the level of funding provided to paramilitary groups, the research into the sources of funding has to rely predominantly on anecdotal evidence and generic research on funds available to key representatives of the Iranian regime.

The paper examines the information available on possible financial links to the Iranian military budget, and more specifically the Iranian Revolutionary Guards Corps (IRGC), and its special elite Qods Force. This is partly based on published fiscal breakdowns, complemented with findings of investigations of other sources of income of these groups.

At the same time, various experts suspect that there are large shadow budgets directly available to the Iranian Supreme Leader, Ayatollah Ali Khamenei, through a conglomerate of foundations and companies. The background of these networks is briefly described. While it is alleged that these revenues are also being used to support various paramilitary groups, it is impossible to identify or follow a money trail.

1.2 Sanctions

An overview of the economic, financial and political sanctions against Iran has been researched based on information from governments, international institutions and relevant research institutes. The large number of sanctions in place can be broken down into terrorism-related sanctions, which are likely to remain in place even after a nuclear deal has been implemented, and nuclear-related sanctions, which are expected to be lifted once such as deal is implemented. The overview focuses on sanctions imposed by the US, the United Nations and the European Union.

1.3 Costs of Iran’s nuclear programme

As with the previous questions, hard data on the economic impact of Iran’s nuclear programme and the related sanctions are not available.

A realistic estimate should consider the direct and indirect costs of the nuclear programme, thus, not only the costs of building and operating the actual civilian nuclear reactor in Bushehr and facilities related to the nuclear programme, but also the economic impact of nuclear-related sanctions. Besides some smaller budget items in the official budgets, the research had to rely on best estimates made by various experts and organisations in order to come up with a likely range for the total economic costs of Iran’s long-term investment in nuclear energy facilities. It is not possible to discern the costs for civil use from a possible military programme.

1.4 Impact on Iranian economy

While it is not possible to discern the different levels of impact on public finances, estimates on the economic losses caused by international sanctions and the value attached to a relief of the nuclear-related sanctions as part of a nuclear deal are available.

1.5 Economic costs of a renewable energy pathway

Leaving aside the discussion on a possible nuclear weapons programme and focusing instead on the energy needs of the Iranian economy, arguments for a switch to renewable energy sources are summarised in this paper. Information published by national and international authorities and research institutes, scientists and civil society organisations forms the basis of this section.