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Reconstruction in Syria

Giancarlo Elia Valori

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From the beginning, for Turkey the war in Syria has been a “domestic” problem- albeit not entirely so.

 For the West, it has been an opportunity to hurt a Russian ally, but it has failed, thus also making Syria become one of the areas for the strategic expansion of Shiite Iran. Giving ground to the enemy is a fundamental strategic mistake.

 Incidentally it seems that the Global Strategy is lost memory for the West – more or less like political economy is completely forgotten, faced with market fluctuations and Stock Exchange algorithms.

 On the one hand, however, at the beginning of the Syrian crisis, Erdogan aroused the pride of his nationalist voters while, on the other, he justified the increase in domestic prices and inflation with the vast Turkish operation in Syria.

 Two propaganda solutions for the same problem, i.e. the Turkish hegemony in Central Asia.

 Obviously, the primary goal of the Turkey led by the AKP – a party born of an old Muslim Brotherhood network – was to enter Syria to eliminate Assad’s Baathist power, with a view to replacing it with a clearly pro-Turkish regime.

 To this end, Turkey accepted the presence of “terrorists” and the Turkish military support for the Syrian jihad, and even the hidden support for the so-called “Caliphate”, with a view to stopping the expansion of Syrian-Iraqi Kurds and their connection – also at territorial level – to the Anatolian Kurds.

 That was the aim of the Operation “Olive Branch” that the Turkish Armed Forces carried out in early 2018.

 In that case, it was a matter of blocking the Kurdish administration of Afrin to prevent the Kurdish YPG from creating its own strategic and territorial continuity in Northern Syria, up to coming into contact with the Anatolian Kurds.

  The Turkish forces also moved many Turks to the area.

 Currently Turkey has three goals: the agreement with Russia for the future of Syria; the maintenance of Iran’s neutrality in Syria and in the rest of the region and even the internal stability of Bashar al-Assad’s regime.

 Erdogan would also like to have good relations with the United States, which is acting in Syria with ideas that are still very vague.

 Unfortunately, this currently holds true for many strategic players in Syria.

 After eight years of war, the World Bank has calculated that only material damage to houses and infrastructure is worth no less than 197 billion US dollars.

 A quarter of all Syrian houses has been destroyed, but it is estimated that the cost for returning to the status quo ante ranges between 300-400 billion dollars. The most pessimistic ones estimate it at 450 billion US dollars.

 We believe that currently the real cost is equal to 400 billion dollars. Assad’ Syrian forces and Syria’s inhabitants keep on discovering unknown disasters.

 Considering the amount of money needed, however, the only two external supporters of Assad’s regime, namely Russia and Iran, are not in a position to contribute to the Syrian reconstruction.

 Furthermore, the USA and the EU are not interested in funding Syria’s return to pre-conflict economic conditions, unless there is a “political transition”, i.e. unless Bashar al- Assad leaves power.

 The problem is that he has won with the help of Russia and Iran, while the West – with its infinite coalition – has lost. Who can send away who?

 Indeed, the US and European economic sanctions against Syria have become stricter in early 2019, and the country has a population of 13 million inhabitants, who urgently need support, aid, medicines and food.

 Hence the greatest humanitarian crisis since the Second World War, but both the USA and Germany, in particular, are only interested in ousting the “tyrant” Assad – possibly for recreating the jihadist void that Syria has just overcome and that the West would not know how to manage, regardless its being for or against.

 Currently the US sanctions impose a block on all exports to Syria or on any financial transactions involving Syrian entities.

 80% of those who need serious hospital care cannot be treated. There is a lack of doctors, drugs and hospitals.

 The sanctions also concern drugs and medical technologies, as well as all electrical, electronic, industrial and oil components.

 Even the simplest electrical devices and their spare parts are affected by sanctions.

 Given the new EU political configuration, however, Syria may receive some abstract political support, but certainly not tangible aid.

Here we can think of the Assembly of Hungarian nobles, to whom Marie Therese of Austria asked to support her war against Frederick II of Prussia who had invaded Silesia.

 “We will give our lives for the Queen, but not the oats for horses”.

China could certainly be a solution.

 To date, China has not shown particular interest in the matter, but it anyway participated in the meeting between 70 countries and international institutions, held in April 2017 for the reconstruction of Syria.

 However, China has not provided direct support to the  “tyrant” Assad, who anyway rescued his people and the West itself from the “sword jihad” which, from Syria, would spread everywhere in the Middle East and probably also to Eastern Europe.

 Meanwhile, between 2018 and 2019 China has already granted 2 billion to be invested in the Syrian industry.

  For 2019 and beyond, there are additional 23 billion granted by China through the Cooperation Forum between China and the Arab States.

 Obviously China does not want to be involved in the Middle East chaos. It has no interest in it.

 Syria, however, plays a significant role in the Belt and Road Initiative (BRI).

 Tripoli in the Lebanon has already been planned to be a BRI Special Economic Zone, considering that the Lebanese Tripoli port will be the basis for BRI transport to the whole East-Mediterranean region.

 In order to revitalize this port, China plans to build the Tripoli-Homs railway, while in October 2018 China already donated as many as 800 electricity generators to the city of Latakia.

 Another fundamental Syrian port.

 Back in 2017, China hosted the “First Trade Fair on Syrian Reconstruction Projects”, with the two aforementioned billion for Syrian companies and, above all, the tangible aid  for the reconstruction of over 150 Syrian companies.

 China is interested in the local Syrian companies that deal with steel and energy. Moreover, the China National Petroleum Corporation is already present in the shareholding structure of two of the largest Syrian oil companies, namely the Syrian Petroleum Company and Al Furat Petroleum.

 There is also a Chinese project for technological and training support to the Syrian Armed Forces.

  Furthermore, there is the Chinese automotive sector – a market that China shares with Iran.

 With a shrewd exchange between arable land and technology, Iran has already provided Syria with its mobile telephone network, as well as the management of some phosphate mines.

 All Iranian economic operations are made by leaders of the Revolutionary Guard and probably the Iranian military will call upon Chinese companies at the right time.

  One option for Assad could be the support – not yet politically mature, but certainly not impossible – of the United Arab Emirates and Saudi Arabia.

 The two powers of the Arabian peninsula are above all interested in limiting the power projection of Turkey and Qatar – the two main supporters of the opposition (and the jihad) against Bashar al-Assad – while they consider Iran’s control over Syria scarcely relevant from the economic viewpoint. At least for the time being.

 In late 2018, however, embassies were reopened in Syria, Bahrain and the Emirates.

 Furthermore, as can be easily imagined, manpower is lacking throughout Syria.

 Many people have migrated to the Lebanon, Jordan or Europe.

 Nevertheless, there is still a shortage of capital, which also leads to manpower shortage.

 From this viewpoint, Bashar al-Assad’s regime has developed a model of public-private partnership (PPP), which is almost the sole legal criterion for reconstruction.

 Decree No. 19,issued by President Assad in May 2015, lays down that the various administrative units, including governorates and municipalities, can establish their autonomous investment companies.

 In January 2016, Assad’s government enacted the Law on Public-Private Partnerships, which allows private companies to manage and develop all the public assets they hold or control.

 For example, the Governor of Damascus is the President of the company that is investing in the real estate sector of Basateem al-Razi, a district of the Syrian capital city.

Obviously the recourse to private individuals is not enough. The PPP systems are based mainly on bank loans. Nevertheless, certainly also the banks have not all the capital available for reconstruction at their disposal.

 According to the latest calculations, all Syrian banks have a reserve of 1.7 trillion Syrian pounds, equivalent to 3.5 billion US dollars. Hence the primary role will inevitably be played by donors, particularly the foreign ones.

 Obviously Russia, China and Iran, but there are also North Korea, Brazil and India – and we will soon see them at work.

 What about Iran, in particular? Iran has recently signed a Memorandum of Understanding for the construction of as many as 200,000 houses for civilian use in Damascus.

 Considering the US and EU policies, many transactions will be made outside the SWIFT system.

 The aforementioned system has two processors – one in the Netherlands and the other one in the USA – that work independently. Often the transactions will not take place in US dollars.

 Iran also wants to build a power plant in Latakia, while the Ayatollah regime still supports Bashar al-Assad with as many as 6 billion US dollars a year.

 If economic and military support are considered together, some analysts maintain that Iran’s transfers to Syria range between 15 to 20 billion US dollars a year.

  Furthermore, if there are credible links between Iran’s investments and Syria’s political attitudes, Iranian money will continue to flow.

 The Russian Federation has also carried out a strong lobbying activity for Syrian reconstruction, with a direct intervention by Chief of Staff Gerasimov vis-à-vis the United States.

 The response has been almost immediate: the political “transition”, i.e. Assad’s quick leaving the scene, is the prerequisite for funding.

 Assad, although having won against the jihad- often organized by Western allies – is now only guilty of having remained in power, instead of leaving Syria in the hands of Islamic terrorists, whom the West claimed it wanted to fight.

 It is strange that some worshipers of democracy stoop to this type of blackmail.

 After being contacted by Vladimir Putin in August 2018, Chancellor Merkel said she wanted to avoid a “humanitarian disaster” that has already been in place for some time. She also said, however, she didn’t want to participate in a reconstruction process in Syria led – like it or not – by the Syrian winner, namely Bashar al-Assad.

 The same was said by the French leaders. Good old days when, in a heavily-indebted Germany, Hjalmar Schacht, known as “Hitler’s banker” – a Jew and a Freemason, but anyway still free – created an investment bank in Munich to help the Middle East and Africa.

 Again in August 2018, Russia also put new pressure on Saudi Arabia, although the latter has certainly never been friendly to the Alawite and pro-Iranian regime in Syria.

 Certainly, even now Saudi Arabia does not want to bear the cost for Syria’s reconstruction.

 Obviously, the Saudi regime may see investments in Syria as an antidote to the Iranian presence, although nothing has been decided yet.

 Nevertheless, the forces within Mohammed bin Salman’s inner circle are not entirely opposed to a serious and heavy financial operation in Syria to definitively drive Iran away.

 A balance of threats and signals could make – possibly with the military protection of Russia, which certainly does not want a Shiite hegemony over Syria – part of Saudi funds reach Syria – not exclusive, but also alien to the West, which sees nothing else that the naive escape of the “tyrant”.

 The Libyan disaster was not enough for Westerners, who now want the escape of the Alawite and Baathist Syrian leader, although he has won.

What will happen later? Either the jihadist chaos, of which they believe they can take advantage to the detriment of Iran, or the Chinese penetration, which will certainly not be friendly to Western business.

 As already seen, the other financial option for Syria is China.

  China, however, will really take no action until the US troops move permanently from the Syrian region to the Far East.

 In January 2018 Russia signed a contract enabling its companies in the sector to exclusively exploit oil and gas fields under the direct control of Assad’s forces.

 The Syrian oil and gas reserves are, above all, in the North-Eastern regions, in areas controlled by the Syrian Democratic Forces in the hands of the YPG Kurds.

 Other Russian projects are the following: electricity generation in the Homs district; a new railway line connecting Damascus International Airport to the city centre and a series of manufacturing industries.

 The Russian entrepreneurial zeal has not even failed to upset Iran: Russia has “snatched” from Iran a fifty-year contract for the use of phosphates.

 Hence, for the time being, the Russian Federation has won the struggle for Syrian reconstruction, but then there will inevitably be also China. Later, if the West remains deaf – and maybe even silly – there will be nothing left for Syria, which will recreate the conditions for a new regional war that the West will certainly lose again.

Advisory Board Co-chair Honoris Causa Professor Giancarlo Elia Valori is an eminent Italian economist and businessman. He holds prestigious academic distinctions and national orders. Mr. Valori has lectured on international affairs and economics at the world’s leading universities such as Peking University, the Hebrew University of Jerusalem and the Yeshiva University in New York. He currently chairs “International World Group”, he is also the honorary president of Huawei Italy, economic adviser to the Chinese giant HNA Group. In 1992 he was appointed Officier de la Légion d’Honneur de la République Francaise, with this motivation: “A man who can see across borders to understand the world” and in 2002 he received the title “Honorable” of the Académie des Sciences de l’Institut de France. “

Middle East

The secret behind Trump’s moves in eastern Deir ez-Zur

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Trump’s desire for Syrian oil has led observers to consider it as the beginning of occupying oil wells in other countries, including Libya, Iraq, Saudi Arabia and other Persian Gulf Arab states.

The obsession of the U.S. president with money and oil is obvious for everyone and that is why U.S. military commanders have used this temptation by Trump to persuade him to keep some troops in Syria.

On October 28, Trump said, “We are keeping the oil — remember that. Forty-five million dollars a month?  We have secured the oil”.

Last week, news sources reported that the U.S. president has agreed to develop military missions to protect oilfields in eastern Syria.

The Turkish Anadolu Agency reported that the U.S. has established a new military base in the oil-rich parts of Deir ez-Zur in Syria.

In this regard, Trump announced the settlement of some U.S. companies in Syria’s east to invest in and exploit oilfields. It was a move that drew Russian backlash.

Russian opposition to Trump’s oil ambitions

Russian Foreign Minister Sergey Lavrov said in a statement in late October that the Syrian oil is the focus of U.S. attention. In a phone call with U.S. Secretary of State Mike Pompeo, Lavrov said it was important to refrain from “steps undermining the sovereignty and territorial integrity” of Syria.

Russian Defense Ministry spokesman Major General Igor Konashenkov also said, “This, what Washington is doing now — capturing and maintaining control through the use of arms over oil fields in eastern Syria — that is, to put it simply, international, state-sponsored banditry,” DW reported on October 26.

Konashenkov said tank trucks guarded by U.S. military servicemen and private military companies smuggle oil from fields in eastern Syria to other countries.

Russian Deputy Foreign Minister Sergei Vershinin also pointed to U.S. efforts to reinforce its presence in Syrian oil-rich lands, calling it an illegal act by Washington. Vershinin also said that Moscow will never accept the policy that the U.S. is pursuing in Syria.

The Russian Defense Ministry in recent weeks has also released satellite images of some areas in Syria showing that U.S. troops have created security guard to smuggle Syria’s oil. Earlier, images of eastern Syria were released documenting oil trucks were traveling across Syria-Turkey borders, an action which reveals the goals of those countries which support terrorism in Syria.

 Syria’s oil reserves

In terms of oil reserves, Syria is in 32nd place after Malaysia and ahead of Argentina, with 2,500,000,000 barrels. Syria’s known oil reserves are mainly in the eastern part of the country in Deir ez-Zor, the second largest Syrian province after Homs. The rest of reserves are in other provinces such as Hama, Ar Raqqah and Homs.

Before the beginning of civil war in 2011, Syria was extracting 385,000 barrels of light crude oil with an approximate value of €3 billion, which were being transferred to Homs via pipeline. 89,000 barrels of the extracted oil were being refined and used for domestic uses. The rest was being exported through port of Baniyas.

Lebanon has uncovered some oil and gas reserves in the Mediterranean. Syria can also explore some of these reserves as it has long coasts along the Mediterranean if it invests in its territorial waters.  

U.S. actions in eastern Euphrates

Now that the defeat of terrorists is clear to everyone, the U.S. is seeking to create an economic crisis in Syria by using oil as a tool against Damascus. This is the reason why it is seizing the country’s oil reserves and also pressures Damascus to accept Washington’s conditions.

From our partner Tehran Times

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Middle East

Middle Eastern protests: A tug of war over who has the longer breath

Dr. James M. Dorsey

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Mass anti-government protests in several Arab countries are turning into competitions to determine who has the longer breath, the protesters or the government.

In Algeria, Lebanon and Iraq, countries in which the leader was either forced to resign or has agreed to step down, authorities appear to be dragging their feet on handovers of power or agreed transitional power sharing arrangements in the hope that protesters, determined to hold on to their street power until a political transition process is firmly in place, either lose their momentum or are racked by internal differences.

So far, protesters are holding their ground, having learnt the lesson that their achievements are likely to be rolled back if they vacate the street before having cemented an agreement on the rules of the transitional game and process.

Algerians remain on the streets, seven months after President Abdelaziz Bouteflika was forced to step down, in demand of a complete change of the political system.

Scores of recent arrests on charges that include “harming national unity” and “undermining the morale of the army” have failed to deter Algerians who refuse to accept the military’s proposed December 12 date for elections.

Lebanon enters its second months of protests with the government going through the motions but ultimately failing to respond to demands for a technocratic government, a new non-sectarian electoral law and early elections.

An effort to replace prime minister Saad Hariri with another member of the elite, Mohammad Safadi, a billionaire businessman and former finance minister, was rejected by the protesters.

We are staying here. We don’t know how long – maybe one or two months or one or two years. Maybe it will take 10 years to get the state we are dreaming of, but everything starts with a first step.” said filmmaker Perla Joe Maalouli.

Weeks after agreeing to resign in response to popular pressure, Iraqi prime minister Adil Abdul Mehdi appears to be increasingly firm in his saddle.

Much like what prompted US President George H.W.. Bush to first call in 1991 for a popular revolt against Saddam Hussein and then give the Iraqi strongman the tools to crush the uprising, Mr. Mehdi is holding on to power in the absence of a credible candidate acceptable to the political elite to replace him.

Mr. Mehdi’s position is strengthened by the fact that neither the United States nor Iran wants a power vacuum to emerge in Baghdad.

Backtracking on Mr. Mehdi’s resignation and refraining from appointing a prime minister who credibly holds out the promise of real change is likely to harden the battle lines between the protesters and the government.

The tugs of war highlight the pitfalls protesters and governments need to manoeuvre in what amounts to a complex game with governments seeking to pacify demonstrators by seemingly entertaining their demands yet plotting to maintain fundamental political structures that anti-government activists want to uproot.

The risk of a tug of war is that protests turn violent as happened in Hong Kong or in Lebanon where cars of parliamentarians were attacked as they drove this week towards the assembly.

Meeting protesters’ demands and aspirations that drive the demonstrations and figure across the Middle East and North Africa, irrespective of whether grievances have spilled into streets, is what makes economic and social reform tricky business for the region’s autocrats.

Its where what is needed for sustainable reforms bounces up against ever more repressive security states intent on exercising increasingly tight control.

Sustainable reform requires capable and effective institutions rather than bloated, bureaucratic job banks and decentralisation with greater authorities granted to municipalities and regions.

Altering social contracts by introducing or increasing taxes, reducing subsidies for basic goods and narrowing opportunities for government employment will have to be buffered by greater transparency that provides the public insight into how the government ensures that it benefits from the still evolving new social contract.

To many protesters, Sudan has validated protesters’ resolve to retain street power until transitional arrangements are put in place.

It took five months after the toppling of president Omar al-Bashir and a short-lived security force crackdown in which some 100 people were killed before the military, the protesters and political groups agreed and put in place a transitional power-sharing process.

The process involved the creation of a sovereign council made up of civilians and military officers that is governing the country and managing its democratic transition.

Even so, transitional experiences have yet to prove their mettle. Protesters may have learnt lessons from the 2011 popular Arab revolts that toppled the leaders of Tunisia, Egypt, Libya and Yemen.

Yet, this time round, protesters lack the broad-based international empathy that 2011 uprisings enjoyed and are up against more than domestic forces backed by conservative Gulf states.

Powers like Russia and China make no bones about their rejection of protest as an expression of popular political will.

So has Iran that has much at stake in Iraq and Lebanon, countries where anti-sectarian sentiment is strong among protesters, even if the Islamic republic was born in one of the 20th century’s epic popular revolts and is confronting protests of its own against fuel price hikes.

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Middle East

Iran’s next parliamentary election hinges on economic problems, US sanctions effective

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It seems any faction focuses on solving the economic problems, has more chance for victory in the parliamentary elections.

The eleventh elections of the Islamic Parliament in Iran will be on Feb 21, 2020 across the country. Seyed Salaman Samani spokesman of Interior Ministry said in an interview that has published on the official website of the ministry.

About 4 months have remained to the elections, but the politicians and parties have started to organize their campaigns and planning for victory.

The current parliament was formed from 41 percent Reformers and Moderates, 29 percent Principlists, 28 percent Independents and 2 percent Minorities, according to the ISNA News Agency.

In Tehran, capital of the country, all seats were gained by the Reformers, but some important cities such as Mashhad as the second city in the country, the Principlists were decisive winners.

But the majority of people and political activists are serious dissatisfactions concerning the function of the parliament, even some experts have emphasized on the famous slogan that says: “Reformer, Principlist, the story is over.”

This situation has formed, while Iran`s Parliament has been under control between two parties in the past years. So, some experts seek up the third faction for improving the country’s position, but so far the third faction has had not a leader and specific structure.

Due to the Reformers supporting of President Hassan Rouhani in the last presidential elections and lack of his rhetoric realization, the position of the Reformers has weakened increasingly. For example, Rouhani said during the contests of the presidential elections about 2 years ago in Iran television that If Iranians reelect me, all sanctions even non-nuclear sanctions will be lifted. But now, the sanctions against Iran have increased and the economic situation of the people has hurt extremely.

But recently, many celebrities of Iran have regretted concerning supporting Rouhani like Ali Karimi the former football player and Reza Sadeghi the famous singer, they demonstrated their regret on social media. So, some suggested that the victory of Principlists in the elections is certain.

“The Principlists need not do anything; they are comfortably the winner of the next parliamentary elections.” Sadegh Zibakalam, an Iranian academic reformist said in an interview with Shargh Newspaper.

“We have no chance for parliamentary elections and next presidential elections unless a miracle happens,” he added.

The Iranian Principlists are closer to Iran`s supreme leader and guard corps than the Reformers. A political face in the right-wing like, Mohammad Bagher Ghalibaf with the slogans “New Parliament ” and “Neo-Principlism ” has recalled young people to receive their ability to provide the elections list. Ghalibaf launched his third presidential campaign for the Iranian presidency on April 15, 2017, but on May 15, 2017, Ghalibaf withdrew, but he supported Ebrahim Raisi who is the current chief of Iran`s judiciary.

Another face is the former president Mahmoud Ahmadinezhad. Some experts say Ahmadinezhad has a great plan for the next elections but so far he has not spoken about it. Recently he criticized toughly from the government of Rouhani and Iran’s Judiciary. Recently, some of his close activists arrested by Iran’s Judiciary, and they are in Evin Prison now. Some analyzers say Ahmadinezhad has high popularity, just as the people have welcomed warmly lately on his travels across the country.

JAMNA or “Popular Front of Islamic Revolution Forces” is another chance for Principlists in the next elections. JAMNA founded in late 2016 by ten figures from different spectrum of conservative factions, in the end, the party elected Ebrahim Raisi as a candidate for the presidential election but Raeisi defeated.

But Reformers are not hopeless, Mohammad Khatami as the leader of the Reformers, who served as the fifth President of Iran from 1997 to 2005 has said statements recently. He has wanted from the government to qualify the Reformers candidates for participation in the political event.

One of the Reformer’s big problems in the history of Iran `s elections has been the disqualification by the Guardian Council. According to Iran constitution, all candidates of parliamentary or presidential elections, as well as candidates for the Assembly of Experts, have to be qualified by the Guardian Council to run in the elections.

Some Reformers in reformist newspapers state that they will take part in the parliament elections on this condition the majority of Reformers’ candidates will be qualified by the Guardian Council.

Some analysts said the Iran parliament has not enough power in order to improve the country’s situation. Just as the parliament has approved the bill of “United Nations Convention against Transnational Organized Crime” by a 126 vote in last year, but the Guardian Council has disagreed with it and its fate shall determine by Expediency Discernment Council, while the government has frequently emphasized on the bill. The government believes the approving the bill will cause to reducing the bans about the economic transaction with the world.

Generally, Iran`s economic position is very critical currently, tough sanctions by Trump administration and the defeat of the nuclear deal (JCPOA) has caused that Iranians to be under serious problems. The stuff prices and inflation are at the highest level since Iran`s revolution in 1979. So, it seems any faction that focuses on solving the economic problems, has more chance for victory in the parliamentary elections. Also, the more important issue is the participation rate of people. If dissatisfactions about economic problems will be continued, hope and joy between people would reduce the rate of Participation in the next elections. Some experts say based on experiences in Iran, when the rate of participation in the elections is reduced, the Principlists has a more chance for the victory, because the gray spectrum that is not black or white, usually has a willing to the Reformers. the spectrum includes younger people even teenagers in the urban society.

Some political observers say the gray spectrum has not very willing to participate in the next elections. Some suggested that the future situation, especially in the economic field is very important to make the willingness about the gray spectrum to participate.

Analysts said the winner of the presidential elections 2 years later is the winner of the parliamentary elections on Feb 21, 2020. The majority of the next parliament will affect the political space across the country. This procedure in Iran has precedent. Like the victory of the Reformers in the last parliamentary elections that it caused the Rouhani victory about 2 years ago.

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