Iran vs. Saudi Arabia

Known as Persia until 1935, Iran became an Islamic republic in 1979 after the ruling monarchy was overthrown and Shah Mohammad Reza PAHLAVI was forced into exile. Conservative clerical forces led by Ayatollah Ruhollah KHOMEINI established a theocratic system of government with ultimate political authority vested in a learned religious scholar referred to commonly as the Supreme Leader who, according to the constitution, is accountable only to the Assembly of Experts (AOE) - a popularly elected 88-member body of clerics. US-Iranian relations became strained when a group of Iranian students seized the US Embassy in Tehran in November 1979 and held embassy personnel hostages until mid-January 1981. The US cut off diplomatic relations with Iran in April 1980. During the period 1980-88, Iran fought a bloody, indecisive war with Iraq that eventually expanded into the Persian Gulf and led to clashes between US Navy and Iranian military forces. Iran has been designated a state sponsor of terrorism and was subject to US, UN, and EU economic sanctions and export controls because of its continued involvement in terrorism and concerns over possible military dimensions of its nuclear program until Joint Comprehensive Plan of Action (JCPOA) Implementation Day in 2016. The US began gradually re-imposing sanctions on Iran after the US withdrawal from JCPOA in May 2018.

Following the election of reformer Hojjat ol-Eslam Mohammad KHATAMI as president in 1997 and a reformist Majles (legislature) in 2000, a campaign to foster political reform in response to popular dissatisfaction was initiated. The movement floundered as conservative politicians, supported by the Supreme Leader, unelected institutions of authority like the Council of Guardians, and the security services reversed and blocked reform measures while increasing security repression. Starting with nationwide municipal elections in 2003 and continuing through Majles elections in 2004, conservatives reestablished control over Iran's elected government institutions, which culminated with the August 2005 inauguration of hardliner Mahmud AHMADI-NEJAD as president. His controversial reelection in June 2009 sparked nationwide protests over allegations of electoral fraud, but the protests were quickly suppressed. Deteriorating economic conditions due primarily to government mismanagement and international sanctions prompted at least two major economically based protests in July and October 2012, but Iran's internal security situation remained stable. President AHMADI-NEJAD's independent streak angered regime establishment figures, including the Supreme Leader, leading to conservative opposition to his agenda for the last year of his presidency, and an alienation of his political supporters. In June 2013 Iranians elected a centrist cleric Dr. Hasan Fereidun ROHANI to the presidency. He is a longtime senior member in the regime, but has made promises of reforming society and Iran's foreign policy. The UN Security Council has passed a number of resolutions calling for Iran to suspend its uranium enrichment and reprocessing activities and comply with its IAEA obligations and responsibilities, and in July 2015 Iran and the five permanent members, plus Germany (P5+1) signed the JCPOA under which Iran agreed to restrictions on its nuclear program in exchange for sanctions relief. Iran held elections in 2016 for the AOE and Majles, resulting in a conservative-controlled AOE and a Majles that many Iranians perceive as more supportive of the ROHANI administration than the previous, conservative-dominated body. ROHANI was reelected president in May 2017. Economic concerns once again led to nationwide protests in December 2017 and January 2018 but they were contained by Iran's security services. Additional widespread economic protests broke out in November 2019 in response to the raised price of subsidized gasoline.

Saudi Arabia is the birthplace of Islam and home to Islam's two holiest shrines in Mecca and Medina. The king's official title is the Custodian of the Two Holy Mosques. The modern Saudi state was founded in 1932 by ABD AL-AZIZ bin Abd al-Rahman Al SAUD (Ibn Saud) after a 30-year campaign to unify most of the Arabian Peninsula. One of his male descendants rules the country today, as required by the country's 1992 Basic Law. Following Iraq's invasion of Kuwait in 1990, Saudi Arabia accepted the Kuwaiti royal family and 400,000 refugees while allowing Western and Arab troops to deploy on its soil for the liberation of Kuwait the following year. The continuing presence of foreign troops on Saudi soil after the liberation of Kuwait became a source of tension between the royal family and the public until all operational US troops left the country in 2003. Major terrorist attacks in May and November 2003 spurred a strong ongoing campaign against domestic terrorism and extremism. US troops returned to the Kingdom in October 2019 after attacks on Saudi oil infrastructure.

From 2005 to 2015, King ABDALLAH bin Abd al-Aziz Al Saud incrementally modernized the Kingdom. Driven by personal ideology and political pragmatism, he introduced a series of social and economic initiatives, including expanding employment and social opportunities for women, attracting foreign investment, increasing the role of the private sector in the economy, and discouraging businesses from hiring foreign workers. These reforms have accelerated under King SALMAN bin Abd al-Aziz, who ascended to the throne in 2015, and has since lifted the Kingdom's ban on women driving and allowed cinemas to operate for the first time in decades. Saudi Arabia saw some protests during the 2011 Arab Spring but not the level of bloodshed seen in protests elsewhere in the region. Shia Muslims in the Eastern Province protested primarily against the detention of political prisoners, endemic discrimination, and Bahraini and Saudi Government actions in Bahrain. Riyadh took a cautious but firm approach by arresting some protesters but releasing most of them quickly and by using its state-sponsored clerics to counter political and Islamist activism.

The government held its first-ever elections in 2005 and 2011, when Saudis went to the polls to elect municipal councilors. In December 2015, women were allowed to vote and stand as candidates for the first time in municipal council elections, with 19 women winning seats. After King SALMAN ascended to the throne in 2015, he placed the first next-generation prince, MUHAMMAD BIN NAYIF bin Abd al-Aziz Al Saud, in the line of succession as Crown Prince. He designated his son, MUHAMMAD BIN SALMAN bin Abd al-Aziz Al Saud, as the Deputy Crown Prince. In March 2015, Saudi Arabia led a coalition of 10 countries in a military campaign to restore the legitimate government of Yemen, which had been ousted by Huthi forces allied with former president ALI ABDULLAH al-Salih. The war in Yemen has drawn international criticism for civilian casualties and its effect on the country's dire humanitarian situation. In December 2015, then Deputy Crown Prince MUHAMMAD BIN SALMAN announced Saudi Arabia would lead a 34-nation Islamic Coalition to fight terrorism (it has since grown to 41 nations). In May 2017, Saudi Arabia inaugurated the Global Center for Combatting Extremist Ideology (also known as "Etidal") as part of its ongoing efforts to counter violent extremism. In June 2017, King SALMAN elevated MUHAMMAD BIN SALMAN to Crown Prince.

The country remains a leading producer of oil and natural gas and holds about 16% of the world's proven oil reserves as of 2015. The government continues to pursue economic reform and diversification, particularly since Saudi Arabia's accession to the WTO in 2005, and promotes foreign investment in the Kingdom. In April 2016, the Saudi Government announced a broad set of socio-economic reforms, known as Vision 2030. Low global oil prices throughout 2015 and 2016 significantly lowered Saudi Arabia's governmental revenue. In response, the government cut subsidies on water, electricity, and gasoline; reduced government employee compensation packages; and announced limited new land taxes. In coordination with OPEC and some key non-OPEC countries, Saudi Arabia agreed cut oil output in early 2017 to regulate supply and help elevate global prices.

frequent sand and dust storms

volcanism: despite many volcanic formations, there has been little activity in the past few centuries; volcanoes include Harrat Rahat, Harrat Khaybar, Harrat Lunayyir, and Jabal Yar

Iran's economy is marked by statist policies, inefficiencies, and reliance on oil and gas exports, but Iran also possesses significant agricultural, industrial, and service sectors. The Iranian government directly owns and operates hundreds of state-owned enterprises and indirectly controls many companies affiliated with the country's security forces. Distortions - including corruption, price controls, subsidies, and a banking system holding billions of dollars of non-performing loans - weigh down the economy, undermining the potential for private-sector-led growth.

Private sector activity includes small-scale workshops, farming, some manufacturing, and services, in addition to medium-scale construction, cement production, mining, and metalworking. Significant informal market activity flourishes and corruption is widespread.

The lifting of most nuclear-related sanctions under the Joint Comprehensive Plan of Action (JCPOA) in January 2016 sparked a restoration of Iran's oil production and revenue that drove rapid GDP growth, but economic growth declined in 2017 as oil production plateaued. The economy continues to suffer from low levels of investment and declines in productivity since before the JCPOA, and from high levels of unemployment, especially among women and college-educated Iranian youth.

In May 2017, the re-election of President Hasan RUHANI generated widespread public expectations that the economic benefits of the JCPOA would expand and reach all levels of society. RUHANI will need to implement structural reforms that strengthen the banking sector and improve Iran's business climate to attract foreign investment and encourage the growth of the private sector. Sanctions that are not related to Iran's nuclear program remain in effect, and these-plus fears over the possible re-imposition of nuclear-related sanctions-will continue to deter foreign investors from engaging with Iran.

Saudi Arabia has an oil-based economy with strong government controls over major economic activities. It possesses about 16% of the world's proven petroleum reserves, ranks as the largest exporter of petroleum, and plays a leading role in OPEC. The petroleum sector accounts for roughly 87% of budget revenues, 42% of GDP, and 90% of export earnings.

Saudi Arabia is encouraging the growth of the private sector in order to diversify its economy and to employ more Saudi nationals. Approximately 6 million foreign workers play an important role in the Saudi economy, particularly in the oil and service sectors; at the same time, however, Riyadh is struggling to reduce unemployment among its own nationals. Saudi officials are particularly focused on employing its large youth population.

In 2017, the Kingdom incurred a budget deficit estimated at 8.3% of GDP, which was financed by bond sales and drawing down reserves. Although the Kingdom can finance high deficits for several years by drawing down its considerable foreign assets or by borrowing, it has cut capital spending and reduced subsidies on electricity, water, and petroleum products and recently introduced a value-added tax of 5%. In January 2016, Crown Prince and Deputy Prime Minister MUHAMMAD BIN SALMAN announced that Saudi Arabia intends to list shares of its state-owned petroleum company, ARAMCO - another move to increase revenue and outside investment. The government has also looked at privatization and diversification of the economy more closely in the wake of a diminished oil market. Historically, Saudi Arabia has focused diversification efforts on power generation, telecommunications, natural gas exploration, and petrochemical sectors. More recently, the government has approached investors about expanding the role of the private sector in the health care, education and tourism industries. While Saudi Arabia has emphasized their goals of diversification for some time, current low oil prices may force the government to make more drastic changes ahead of their long-run timeline.

one of the most progressive telecom markets in the Middle East; mobile penetration high, with a saturated market; mobile operators competitive and meeting the demand for workers, students and citizens working from home; Huawei partners with operator to provide 5G to dozens of cities; broadband is available with DSL, fiber, and wireless; mobile penetration is high; restrictive monarchy places limits on information and services available online; authorities operate extensive censorship and surveillance systems; major importer of broadcasting equipment from UAE and China (2020)

Iran protests Afghanistan's limiting flow of dammed Helmand River tributaries during drought; Iraq's lack of a maritime boundary with Iran prompts jurisdiction disputes beyond the mouth of the Shatt al Arab in the Persian Gulf; Iran and UAE dispute Tunb Islands and Abu Musa Island, which are occupied by Iran; Azerbaijan, Kazakhstan, and Russia ratified Caspian seabed delimitation treaties based on equidistance, while Iran continues to insist on a one-fifth slice of the sea; Afghan and Iranian commissioners have discussed boundary monument densification and resurvey

Saudi Arabia has reinforced its concrete-filled security barrier along sections of the now fully demarcated border with Yemen to stem illegal cross-border activities; Kuwait and Saudi Arabia continue discussions on a maritime boundary with Iran; Saudi Arabia claims Egyptian-administered islands of Tiran and Sanafir

Tier 2 Watch List - Saudi Arabia does not fully meet the minimum standards for the elimination of trafficking, but is making significant efforts to do so and was upgraded to Tier 2 Watch List;