Iran’s hard-liners are on a relentless path to gain unrivaled political control. Their victory during the February 2020 parliamentary elections was a crucial step along this road. If, as is widely expected, they win the presidency in May 2021, their already strong partnership with Supreme Leader Ali Khamenei will put them in a good position to influence the crucial struggle to choose his successor. In short, it might be said that the hard-liners are currently enjoying a most advantageous position.
Yet their escalating power grab is also fraught with dire risks. Their efforts could, in fact, enfeeble the very institutional mechanisms that the regime needs to gain—or regain—support in key constituencies. On the regional front, Iran may have thus far avoided getting dragged into a regional war with the United States and/or Israel. But their policy of “controlled escalation” has not immunized Tehran from suffering retaliation from its enemies. Indeed, the July 2nd fire in the Natanz Fuel Enrichment Plant illuminates these perils after Iranian leaders admitted that the incident was not an accident. If it gives them pause, the Natanz affair will probably steel their resolve not only to consolidate their power but to transform the very nature of Iran’s political system. Their challenge is to ensure that the costs will not exceed the benefits the hard-liners hope to reap as they advance this ambitious project to reconfigure Iranian politics.
The trap of securitization
In many respects, this power grab goes against the grain of the multidimensional control system that Iran’s leaders have astutely used to prevent any opposition from posing a major threat to the regime. That system was buttressed by a massive security apparatus headed up by the Islamic Revolutionary Guard Corps (IRGC) and its offshoots. Iran’s rulers preferred to rely on myriad institutions including the parliament, president, and Office of the Supreme Leader in order to channel and arbitrate political and social conflicts. Recourse to massive repression was usually a last resort, one that was deployed when these institutions proved incapable of containing or deflecting dissent. Brute force like that used against demonstrators last year was not a sign of the regime’s success but rather of its weakness.
A transition to a “securitized” regime would deprive the IRGC (and the supreme leader) of the political shield it gains from a system that has allowed some measure of real debate and controlled competition.
It was for this very reason that every bout of opposition at home—or security challenge abroad—has been followed by an expansion of the powers and clout of the IRGC. If the latter has exploited crises to its benefit, however, Iran never made the transition from an Islamic republic to a military-led regime similar to that ruling in Egypt, or the military-managed regimes that dominated Turkey and Pakistan for decades. A transition to a “securitized” regime would deprive the IRGC (and the supreme leader) of the political shield it gains from a system that has allowed some measure of real debate and controlled competition but has given the state-controlled parliament or press the means to undermine the regime itself.
The trap of securitization was amply illustrated in the lead-up to the 2009 Green Movement and in the ensuing expansion of the IRGC’s powers. President Hassan Rouhani’s election in 2013 seemed to herald a return to a more balanced—if unfair—system that included a parliament in which reformists sought to push for economic and social reforms. But Rouhani’s authority was undermined by the Trump Administration’s repudiation of the 2015 nuclear accord, growing economic woes partly spurred by the re-imposition of sanctions, a series of popular protests (the last of which the regime brutally repressed in December 2019), and the rapid spread of the coronavirus in spring 2020. This perfect storm of events provided a stage for re-expanding the IRGC’s reach into key political institutions, including parliament. The danger extends far beyond that body because the IRGC has been enlarging various other institutions in ways that could be pushing Iran closer to full-fledged securitization.
Mohammad Javad Zarif and Hassan Rouhani face isolation
The election of a new parliament in February 2020 gave the hard-liners a huge boost. Their control over the assembly was confirmed by the election of Mohammad Bagher Ghalibaf as speaker. The former mayor of Tehran—as well as IRGC brigadier general who also served as chief of police from 1999 to 2005—secured 230 votes for his bid to become speaker, thus confirming that the new 290-member parliament was not only dominated by IRGC officials but also led by a stalwart of the security apparatus.
Foreign Minister Mohammad Javad Zarif’s unhappy July 5th visit to the parliament underscored the new realities facing him, President Rouhani, and all the reformists who had once looked to the president and his allies as a beacon of change and reform. Heckled by hard-liners who chanted “death to a liar,” Zarif insisted that his foreign policies—not least of which was the negotiation of the Joint Comprehensive Plan of Action (JCPOA)—always had the abiding support of the supreme leader. Although this claim is surely debatable, it is worth emphasizing that the grilling that Zarif endured was less about his failing efforts to rescue the JCPOA and much more about the government’s unfolding efforts to advance a strategic partnership with China. Ordered by Rouhani, that partnership is based on a 25-year contract that was negotiated in secret. Although the democratic credentials of the IRGC members who assailed Zarif are surely questionable, this did not prevent them from accusing the foreign minister of going “behind the nation’s back.” Smelling an opportunity, some 200 MPs tabled a motion to impeach Rouhani.
It is very unlikely that Khamanei will allow this process to move forward; it is one thing to give his hard-line allies room to embarrass Rouhani, but quite another to weather the draconian step of removing an elected president. Such a move might boomerang by rallying popular and elite support for Rouhani and his various reformist allies, thus dramatically altering the political field in ways that might undermine the hard-liners’ drive to win the presidency in May 2021. Their very ascendancy requires that they not overplay their hand.
The IRGC’s dual strategy: benefits and risks
The above episode also underscores the hard-liners’ two-pronged strategy. The first involves an extraordinary expansion of the IRGC’s institutional and ideological reach into some of the very social sectors on which the regime has long depended for its popular legitimacy. Iran’s growing economic crisis—underscored by the seemingly unstoppable fall in the value of its currency, the rial—has made it hard for the regime to use a long-standing strategy through which it has tried to contain the growing political weight of the urban middle class by channeling economic support to farmers, government officials, and industrial workers in Iran’s rural towns and villages. But to its clear chagrin, despite (or because of) its December 2019 crackdown, the regime still faces strikes and protests that, however sporadic, reinforce the prospects for a new bout of wider resistance.
In a bid to deter or contain further protests, the regime has vastly expanded the role of the IRGC’s Provincial Guard. This campaign extends beyond its vast effort to grow the grassroots support networks in the rural provinces.
In a bid to deter or contain further protests, the regime has vastly expanded the role of the IRGC’s Provincial Guard. This campaign extends beyond its vast effort to grow the grassroots support networks in the rural provinces. To stem what hard-liners fear—with ample reason—is a decline of popular support in all sectors for the basic theological foundations of the Islamic Republic, the IRGC has expanded its reach into the educational system starting from kindergarten all the way up to the universities. These efforts include the creation of higher education institutions that students can enter without sitting for the competitive entrance exams other Iranian youth must take to enter state universities. Thus, the IRGC has created a tantalizing alternative: a parallel education system, one that is designed to enhance ideological commitment along with the possibility for career advancement in economic sectors controlled by or linked to the IRGC itself.
To buttress such measures, the IRGC has struggled to extend its control over cyberspace. These efforts include not only the repression of online dissent but the use of cyberspace to recruit online supporters. Thus securitization carries with it the potential for greater control over one of the very arenas that have been crucial to sustaining independent thought and criticism.
The second prong of the hard-liners’ dual strategy is to enhance and expand their ability to exercise power and influence in the system’s formal political institutions. This presents a seeming paradox because the hard-liners’ efforts to exclude alternative political forces might very well end up denuding institutions, such as the parliament, of any real or popular authority. Therefore, they face the tricky task of trying to use political institutions without hollowing them out to the point of practical irrelevance.
Trying to strike this balance, hard-liners have sought to mobilize around issues that cut across many of the usual ideological and social divides that define Iran’s political arena. Here, the issue of corruption has proven especially useful. Corruption has been a widespread phenomenon for decades. But tolerance for its costs has rapidly declined with the precipitous fall of oil revenues and the ensuing hardships that Iranians have suffered. Seizing on this opportunity, hard-liners have accused their rivals of financial malfeasance. Zarif’s recent grilling before the parliament was one such occasion. Beyond implying that the foreign minister had been implicated in the signing of dubious contracts with the Chinese, hard-liners accused cabinet officials, such as Oil Minister Bijan Zanganeh, of corruption. Having already survived a previous threat of impeachment in November 2019, Zanganeh was an easy target in a wider campaign spearheaded by Judiciary Head Ebrahim Raisi. A close ally of Khamenei who will probably be a serious contender for the position of supreme leader, Raisi pushed efforts that have resulted in the firing of some 60 judges and the imposition of 44 long-term prison sentences and nine death sentences.
The anti-corruption campaign has also facilitated the efforts of various hard-line leaders to position themselves for the May 2021 presidential elections. Many are in their forties and thus represent a relatively young cadre of rising political activists.
This anti-corruption campaign has also facilitated the efforts of various hard-line leaders to position themselves for the May 2021 presidential elections. Many are in their forties and thus represent a relatively young cadre of rising political activists. Their timing could not be better: with growing dissatisfaction with the political status quo—and against the backdrop of Khamenei’s call for “a young and religiously committed administration”—these activists have an opportunity to play the political game and many have close ties to the security apparatus. While it is still early to predict the identity of the contenders for the presidency, those with links to the hard-liners could have an additional edge, especially if they stick to themes—such as corruption—that have appeal to young Iranians from diverse sectors of society.
Beyond positioning themselves for the presidential race, hard-liners in the security apparatus appear to be making moves to influence the eventual struggle to determine Khamenei’s successor. Thus, for example, Mohammad Baqeri, chairman of the Joint Staff of the Iranian armed forces, and IRGC Commander-in-Chief Hossein Salami have both issued letters of support backing Raisi. If the judiciary head makes a bid for the position of supreme leader, Raisi’s efforts to brandish his populist credentials by leading the anti-corruption campaign will have the additional benefit of getting a not-so-subtle endorsement from powerful players in the security apparatus.
While this dual strategy has advanced the hard-liners’ cause, it has real risks. Their bid to exploit the parliament without undermining themselves may not pan out. If (as is very possible) turnout in the upcoming presidential election reaches an all-time low, they would have achieved a pyrrhic victory. Moreover, their plan to exploit popular rage by bringing up charges of corruption could backfire by being turned against the hard-liners. Ghalibaf was implicated along with his family in corruption schemes when he was the mayor of Tehran. To be sure, with many skeletons in the closet, hard-liners cannot just don the cloak of populism and expect that this maneuver will succeed. On the contrary, it could divide their ranks. The ongoing effort by former President Mahmoud Ahmadinejad to reposition himself in the political system is a case in point. Although as president he had aligned himself with the IRGC, he has tried to strike a more independent line by becoming a leading voice in the anti-corruption campaign. He was not allowed to run in the 2017 election; nevertheless, he might make another attempt at the presidency by positioning himself as the people’s candidate. The odds may be long, but recent history suggests that the aspirations of an ambitious “anti-system” candidate who wants to be part of the political system he has maligned should not be underestimated.
With many skeletons in the closet, hard-liners cannot just don the cloak of populism and expect that this maneuver will succeed. On the contrary, it could divide their ranks.
Finally, it is worth noting that the effort to control the internet also carries a cost. If, for example, the hard-liners succeed in closing down Instagram, as they are threatening, their own leaders will be deprived of a key arena for communicating their project to their followers. Indeed, what goes around comes around.
Playing it (relatively) safe?
Given the risks that could ensue from the hard-liners’ efforts to extend their power, they might very well avoid making moves that could draw them into costly confrontations. Their response to the January 2, 2020 American assassination of Qassem Soleimani shows how tricky it will be for the IRGC to maintain its credentials as Iran’s ultimate protector and not get drawn into a prolonged battle with the United States. After all, had it not been for US President Donald Trump’s decision to downplay the significant physical injury inflicted on US servicemen by Iran’s retaliatory attack on a US base in Iraq, a far wider conflict might have occurred. Whether Iran’s hard-liners will repay the favor by showing similar restraint following the Natanz fire remains to be seen. The fact that no country or party has thus far claimed credit for the blaze will help both the United States and Iran to retain the fragile benefits of controlled escalation. Having received a major boost from a US administration that seems unwilling to wage war but has no idea how to wage peace, the hard-liners will continue to play the long game.
Daniel Brumberg is a Non-resident Senior Fellow at Arab Center Washington DC, Director of Democracy and Governance Studies at Georgetown University, and a Senior Non-Resident Fellow at the Project on Middle East Democracy (POMED). From 2008 through 2015 he also served as a Special Adviser at the United States Institute of Peace.
Two years ago on Feb. 24, 2022, the world watched as Russian tanks rolled into the outskirts of Kyiv and missiles struck the capital city.
Contrary to initial predictions, Kyiv never fell, but the country today remains embroiled in conflict. The front line holds in the southeastern region of the country, with contested areas largely focused on the Russian-speaking Donbas and port cities around the Black Sea.
Russian President Vladimir Putin, having recognized the Russian-occupied territories of Donetsk and Luhansk as independent days before the invasion, has from the beginning declared the war a “special military operation” to “demilitarize and denazify” Ukraine. His goals have alternated, however, between existential — bringing all of Ukraine into the influence of Russia — and strategic — laying claim to only those Russian-speaking areas in the east and south of the country.
It is in the latter that Russia has been much more successful. Yet after two winters of brutal fighting and hundreds of thousands of casualties on both sides, as of the end of 2023 Russia only laid claim to 18% of Ukraine’s territory, as compared to 7% on the eve of the war and 27% in the weeks after the invasion.
Meanwhile, the West’s coffers have been opened — and, as some say, drained — to help Ukraine’s government, led by President Volodymyr Zelensky, defend itself against Moscow.
Regardless, Ukraine’s military forces have been wholly depleted as they compete with a much more resourced and populous Russia. While Ukraine’s military campaign was able to take advantage of Russian tactical mistakes in the first year, its much-heralded counteroffensive in 2023 failed to provide the boost needed not only to rid the country of the Russian occupation, but also to put Kyiv in the best position to call for terms.
If anything, as Quincy Institute experts Anatol Lieven and George Beebe point out in their new brief, “there is now little realistic prospect of further Ukrainian territorial gains on the battlefield, and there is a significant risk that Ukraine might exhaust its manpower and munitions and lay itself open to a devastating Russian counterattack.”
The only and best solution, they say, is to drive all sides to the negotiating table before Ukraine is destroyed.
The narrative of the war — how it began, where it is today — is well documented. On the second anniversary of Russia’s full-scale invasion, RS thought it might be instructive to look at the numbers — weapons, aid, polling, population, and more — that illustrate the cost and the contours of the conflict over 24 months, and counting.
The U.S. Congress has allocated a total of $113 billion in funding related to the war. The vast majority of this money went directly to defending Ukraine ($45.2 billion in military aid) and keeping its government and society functioning ($46 billion in economic and humanitarian aid). Other funds went to rearming allies ($4.7 billion) and expanding U.S. military operations in Europe ($15.2 billion).
After two years of war, that funding has dried up. The Biden administration, which once shipped two or three new weapons packages each month, has not sent Ukraine a major arms shipment since Dec. 27, 2023. As Congress struggles to pass an additional $60 billion in Ukraine-related funding, observers increasingly believe that aid package may have been the last.
The Pentagon has sent at least 3,097,000 rounds of artillery to Ukraine since Russia’s invasion. Most of those (2,000,000) have been 155 mm shells, the standard size used by the U.S. and its NATO allies. For perspective, that’s about 95,000 tons of 155 mm ammunition alone.
Despite ramping up military manufacturing, the U.S. still only produces about 340,000 155 mm shells per year, meaning that Ukraine has been firing rounds at three times the rate of American production.
Washington has also given Kyiv 76 tanks, including 31 Abrams tanks and 45 Soviet-era T-72Bs. Ukraine has received 3,631 American armored vehicles of various types, from infantry fighting vehicles to personnel carriers and medical trucks.
Meanwhile, Ukraine has made use of 39 American-made HIMARS, a mobile rocket launcher that has become famous for its utility in the war. As for smaller arms, the U.S. has sent at least 400,000,000 grenades and bullets in the past 24 months.
The war has killed at least 10,378 civilians and injured an additional 19,632, according to the UN. More than three in four non-combatant casualties occurred in areas held by the Ukrainian government, indicating that Moscow is responsible for the lion’s share of civilian harm.
When it comes to military casualties, good data still remains hard to come by and estimates are sometimes wildly different. Neither Russia nor Ukraine have offered detailed, public indications of the war’s impact on their soldiers.
The U.S. estimated in August that 70,000 Ukrainian soldiers had died and an additional 100,000 to 120,000 had been injured, putting the number of total casualties at over 170,000. Russia, for its part, claimed in November that 383,000 Ukrainian soldiers had been killed or wounded.
On the other side, the United Kingdom estimates that Russia has suffered at least 320,000 casualties, with 50,000 deaths among Russian soldiers and 20,000 deaths among Wagner Group mercenaries. Washington said in December that Moscow had suffered 315,000 casualties, though American officials did not provide a breakdown of deaths and injuries.
The United Nations estimates that the Ukrainian population (the entire country within internationally recognized borders), which totaled 43.5 million people in 2021, dropped to 39.7 million in 2022 as war swept through the country’s east. This trend continued into 2023, as the population dropped to 36.7 million — the lowest level since Ukraine became independent in 1990.
As of January, 6.3 million Ukrainians have become refugees abroad, with another 3.7 million displaced internally. As the frontlines have settled, Ukraine’s population has slowly started to grow again, reaching 37.9 million in early 2024. Meanwhile, demographer Elena Libanova estimates that only 28 million of those people live within areas currently under Ukrainian government control (outside of Crimea and the Donbas).
Two new polls that came out within the last week illustrate the complexities of Americans’ feelings toward the war in Ukraine and the U.S. role in it.
First, a Pew poll published February 16 found that a large majority of Americans (74%) see the war between Russia and Ukraine as somewhat (30%) or very important (43%) to U.S. interests. And another survey, from the Harris Poll and the Quincy Institute, which publishes Responsible Statecraft, found that Americans broadly support a U.S.-led negotiated end to the conflict.
But the past few months in Washington have been largely focused on U.S. aid to Ukraine, specifically whether Congress will pass President Biden’s request for roughly $60 billion for Kyiv’s fight against Russia.
According to Pew, in March 2022, 74% of Americans said U.S. aid to Ukraine was “just right” or “not enough.” In December 2023, that same survey found that just 47% said the same. The biggest change came from Republicans: 49% said in March, 2022 that U.S. aid was “not enough,” while just 13% said the same in December.
Meanwhile, Gallup found in August 2022 that 74% of Americans said U.S. aid to Ukraine was “about right” (36%) or “not enough” (38%). Those numbers came down slightly in Gallup’s latest track on this question in October, 2023, with 58% saying U.S. aid was about right (33%) or not enough (25%).
There have been several attempts to bring nations together to outline talks to end the war. Russia and Ukraine engaged in five rounds of talks in Belarus and Turkey shortly after the invasion, but the talks collapsed amid allegations of Russian war crimes and Western pressure on Kyiv to keep fighting.
Since then, the belligerents have spoken directly about secondary issues, like Black Sea shipping and prisoner swaps. Ukraine, meanwhile, laid out a “10-point peace plan” that has formed the basis for five international summits, none of which included Russia. These took place in Copenhagen, Denmark, in June 2023; in Jeddah, Saudi Arabia, in August 2023; in Malta in October, 2023; in Riyadh, Saudi Arabia, in December 2023; and Davos, Switzerland, in January of this year.
Since the start of the war, Congress has passed four aid packages for Ukraine, totaling $113 billion. While none of the four packages were identical and aid for Ukraine was sometimes bundled with other spending, the trends for support for Kyiv in Congress are similar to those we see in polling, particularly among congressional Republicans.
The 2022 supplemental, which became law in May 2022 and provided Ukraine with $39.34 billion in aid passed the House 368-57 and the Senate by a vote of 86-11. By September 2023, when the House voted on the Ukraine Security Assistance and Oversight Supplemental Appropriations Act, which provided Kyiv with $300 million in security assistance, it passed by a vote of 311-117, with a majority of Republican members opposing the legislation.
On February 12 of this year, the Senate voted 70-29 to pass a national security supplemental, which would provide approximately $60 billion in aid for Kyiv alongside money for Israel and partners in the Indo-Pacific. The bill has not yet been voted on in the House.
Ben Armbruster, Blaise Malley, Connor Echols and Kelley Vlahos contributed reporting. Graphics by Khody Akhavi.
keep readingShow less
A woman lays flowers at the monument to the victims of political repressions following the death of Russian opposition leader Alexei Navalny, in Moscow, Russia February 16, 2024. REUTERS/Stringer
President Biden was entirely correct in the first part of his judgment on the death of Alexei Navalny: “Putin is responsible, whether he ordered it, or he is responsible for the circumstances he put that man in.” Even if Navalny eventually died of “natural causes,” his previous poisoning, and the circumstances of his imprisonment, must obviously be considered as critical factors in his death.
For his tremendous courage in returning to Russia after his medical treatment in the West — knowing well the dangers that he faced — the memory of Navalny should be held in great honor. He joins the immense list of Russians who have died for their beliefs at the hands of the state. Public expressions of anger and disgust at the manner of his death are justified and correct.
The problem comes with the other part of Biden’s statement, that “[Navalny’s death] is a reflection of who [Putin] is. And it just cannot be tolerated.” If he had said “approved,” “justified,” or “defended,” that would have been absolutely right. But “tolerated”? What can Biden do in response, that he has not done already?
The U.S. president has promised major new sanctions intended to “cut Russia off from the world economy” — but that requires Washington to control the world economy. Economic sanctions against Russia in response to the invasion of Ukraine have failed, and even strengthened the Russian economy and the state’s grip on it. They cannot be significantly extended, because this would damage and infuriate countries that are dependent on Russian energy exports, including India, a key U.S. partner. As to sanctions against Russian individuals part of or linked to the Russian regime, there are already thousands of them, and they have had no effect whatsoever.
Statements like Biden’s are both pointless and dangerous. For the spoken or unspoken implication is that it is impossible to deal with Putin. But like it or not, Putin is the president of Russia. To all appearances, he will remain so for a considerable time to come, and will hand over to a successor of his own choosing. The Biden administration has said that it wants Ukrainian victory (whatever that now means), but it has also said that it believes that the war will end in negotiations, and following the failure of last year’s Ukrainian offensive, is now reported to be moving in this direction.
Who does Biden think that he will negotiate with, if not Putin? Seeking talks on an end to the Ukraine war does not imply approval of Putin’s crimes or his invasion of Ukraine, any more than the Eisenhower administration’s negotiation of an end to the Korean War implied approval of the North Korean regime and its invasion of South Korea.
By its own account, the Biden administration has supposedly made the promotion of democracy around the world a central part of its diplomacy, with the clear implication that only democratic governments that respect human rights are truly legitimate. Actual U.S. diplomacy does not work like this and never has; not because of American imperialist or capitalist wickedness, but because the world does not work like this.
Nobody should be required to like or admire the governments of Abdel Fattah Al-Sisi, Mohammed Bin Salman or Narendra Modi (though we might well wish that U.S. officials had been less effusive in their praise of them). Like Putin, they are however the heads of their countries’ governments, and likely to remain so. You deal with Saudi Arabia and India — and you have to deal with Saudi Arabia and India — you deal with MBS and Modi.
The other thing to be wary of in the outpouring of outrage at the death of Navalny, is that this is already being used to build a strategy of greatly increased Western official support for the Russian opposition. Many (not all) people and groups in the Russian liberal opposition are personally and politically admirable. Some, like Navalny, have shown tremendous courage. To say this is quite different from believing that they are ever likely to form the government of Russia, and that the U.S. should base its policy towards Russia on the hope that this will be so.
The sad truth is that the Ukraine war has placed the Russian liberal opposition in a politically impossible position. Having been largely chased into exile by Putin, they are dependent on Western support. This means however that their principled opposition to the Russian invasion can be portrayed by the Russian government — and is seen by many ordinary Russians — as treason in time of war. As with the Iranian, Chinese, and other oppositions, official support from Washington only allows the ruling regimes to paint the name “traitor” in brighter colors.
A combination (differing from individual to individual) of idealism, dependence on the West and hatred of Putin means that instead of advocating a compromise peace in Ukraine, many Russian oppositionists have — willingly or unwillingly — identified themselves with Ukrainian and Western positions that explicitly demand complete Russian defeat.
And while not many Russians wanted the war, not many Russians want to see Russia defeated. As I have remarked before, even many Americans who strongly opposed the war in Vietnam were outraged when Jane Fonda went to Hanoi. If she stood a chance of being elected to any office in the U.S. before that trip, she certainly didn’t afterwards.
Any hope of rebuilding liberalism in Russia (and indeed Ukraine, albeit to a much lesser extent) therefore requires an end to the war. For some degree of authoritarianism is a natural accompaniment to every war, and regimes all over the world have exploited this to increase their own power. Equally importantly, mass support for Putin is critically dependent on the general belief that the West intends not just to defeat Russia but to cripple it as a state, and that to prevent this it is essential to support the government.
For the moment at least, this has eclipsed previously widespread resentments —which Navalny channeled — at regime corruption. No amount of Western or Russian opposition propaganda can change this Russian picture. Peace might, if it is given a chance.
For the third year in a row, globally, the number of investors in nuclear weapons producers has fallen but the overall amount invested in these companies has increased, largely thanks to some of the biggest investment banks and funds in the U.S.
“As for the U.S., while there is, like past years, indeed a dominance, and total financing from U.S.-based institutions has increased, the total number of U.S. investors has dropped for the third year in a row (similar to our global findings), and we hope to see this number will continue to fall in the coming years,” Alejandar Munoz, the report’s primary author, told Responsible Statecraft.
In 2023, the top 10 share and bondholders of nuclear weapons producing companies are all American firms. The firms — Vanguard, Capital Group, State Street, BlackRock, Wellington Management, Fidelity Investments, Newport Group, Geode Capital Holdings, Bank of America and Morgan Stanley — held $327 billion in investments in nuclear weapons producing companies in 2023, an $18 billion increase from 2022.
These companies are also profiting from the enormous government contracts they receive for developing and modernizing nuclear weapons.
“All nuclear-armed states are currently modernizing their nuclear weapon systems,” says the annual “Don’t Bank on the Bomb” report from PAX and ICAN. “In 2022, the nine nuclear-armed states together spent $82.9 billion on their nuclear weapons arsenals, an increase of $2.5 billion compared to the previous year, and with the United States spending more than all other nuclear powers combined.”
American weapons companies are some of the biggest recipients of contracts for nuclear weapons. Northrop Grumman and General Dynamics are “the biggest nuclear weapons profiteers,” according to the report. Combined, the two American weapons manufacturers have outstanding nuclear weapons related contracts with a combined potential value of at least $44.9 billion.
Those enormous government contracts for nuclear weapons, alongside contracts for conventional weapons, have helped make nuclear weapons producers an attractive investment for American investment banks and funds.
“Altogether, 287 financial institutions were identified for having substantial financing or investment relations with 24 companies involved in nuclear weapon production,” says the report. “$477 billion was held in bonds and shares, and $343 billion was provided in loans and underwriting.”
The report notes that while the total amount invested in nuclear weapons has increased, the number of investors has fallen and trends toward firms in countries with nuclear weapons.
ICAN and PAX suggest that concentration may be a result of prohibitions on nuclear weapons development for signatories to the Treaty on the Prohibition of Nuclear Weapons (TPNW), a 93 signatory treaty committing to the ultimate goal of the total elimination of nuclear weapons. The report says:
The TPNW comprehensively prohibits the development, manufacturing, testing, possession, use and threat of use of nuclear weapons, as well as assistance with those acts. For companies that build the key components needed to maintain and expand countries’ nuclear arsenals, access to private funding is crucial. As such, the banks, pension funds, asset managers and other financiers that continue to invest in or grant credit to these companies allow for the production of inhumane and indiscriminate weapons to proceed. By divesting from their business relationships with these companies, financial institutions can reduce available capital for nuclear weapon related activities and thereby be instrumental in supporting the fulfilment of the TPNW’s objectives.
Susi Snyder, managing director of the Don’t Bank on the Bomb Project, told Responsible Statecraft that even U.S. banks, like Pittsburgh based PNC Bank, are facing shareholder pressure to divest from nuclear weapons and that the tide may be shifting as shareholders in U.S. companies grow increasingly sensitive to investments in nuclear weapons.
“For three years shareholder resolutions have been put forward at PNC bank raising concerns that their investments in nuclear weapon producers are a violation of the Treaty on the Prohibition of Nuclear Weapons (TPNW), and that they are not in line with the bank's overall human rights policy guidelines,” she said.