Are U.S. taxpayers funding both sides of the Iranian/Saudi Arabia proxy wars and arms race? Some analysts believe that the U.S. has inadvertently payed for some of Iran's military expenditures due to the $1.7 billion the U.S. Treasury put into to Iran's Central Bank in January. The Obama administration said the $1.7 billion payment money was allocated regarding the dispute about Iran's arms purchases before the revolution of 1979. This budgetary conflict resolution was to be considered a bargain for the taxpayer because the U.S. may have to pay a steeper interest rate had the matter been adjudicated at The Hague. Still many Republicans and some Democrats feel this money was related directly to the recent January hostage situation as a payoff for a prisoner exchange.
Iran’s most recent budget is now public and shows that it “allows $19 billion to go to the military establishment – the Islamic Revolutionary Guard Corps (IRGC), regular military, and Defense Ministry – a 90-percent increase in military spending compared to the previous year.” Money toward defense includes the government giving the military the $1.7 billion from the US settlement. Iran’s financial upswing is primarily due to the lifting of sanctions brought on by the JCPOA and new dealings with China and Russia. The massive increase in its military budget gives Iran resources to further its involvement in proxy wars between Saudi Arabia.
Iran is a non-Arab and non-Sunni country, and these factors are important in Iranian interaction with Saudi Arabia and other Arab states. As a general principle, Tehran also seeks to eliminate U.S. influence in the region. The Stockholm International Peace Research Institute (SIPRI) reported arms purchases by nations in the Middle East had increased during the past decade and accounted for 25 percent of global weapons sales between 2011 and 2015. Dr. Nawaf Obaid, a fellow at the King Faisal Center for Research and Islamic Studies in Riyadh asserted that Saudi Arabia is certain it could have defeated Iran and its outdated military infrastructure in any direct confrontation. To make sure this remains true, the Kingdom should make sure it maintains nuclear parity with Iran, he added. A permanent bloc of like-minded Arab states working together to ensure regional security and stability will be necessary to roll back Iran's dangerous interference in Arab countries. Obaid described the government in Tehran as an enemy of the Arab nations. Whether or not the US contributed $1.7 billion dollars to the Iranian defense budget and why, this should hardly be the main concern in the future of its growing military strength and on-going proxy wars with Saudi Arabia and neighboring Arab countries.