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Analysis: To really gauge Iran, look inside it

    On the eve of the Islamic Revolution, the Shah had an army that could project power across the region - its planes could fly to Egypt, its warships could sail to Madagascar. But despite the military might and the considerable oil wealth amassed to finance his imperial ambitions, the Shah's might was a paper tiger. His rule crumbled under the weight of the uprising that eventually swept him from power and swept Ayatollah Khomeini and his Islamic Revolution to Iran's helm.

    It is not inappropriate to draw a comparison between then and now - after all, Iran's rhetoric of global ambitions, its considerable military strength, its mastery of asymmetric warfare and its shrewd use of proxies and funding to advance its foreign policy goals suggest that it could soon fulfil its dream of directly challenging US dominance and Israel's might in the region.

    Facilitating, and then exploiting, Iraq's possible descent into chaos, post-US withdrawal, would help expand Iran's influence. And achieving nuclear weapons capability would be the crowning glory of Iran's quest for influence, regional and beyond.

    But this could turn out to be a case of overstretch - one where Iran's muscle flexing abroad is not matched by a regime capable of ensuring its own survival at home. Iran's problems with its internal opposition and the alienation of its restive populace did not begin with the rigged 2009 presidential elections - although the elections and the events that followed probably made the chasm all the more insurmountable. Despite Iran's success in quelling the revolt, the burning embers of revolt still glow.

    Iran's regime is being challenged - as it was in the early days of the revolution - by restive ethnic minorities and a multifaceted opposition. Its domestic economic failures have highlighted the degree of incompetence of its rulers and the unfairness of a system where oil money is wasted on foreign causes while basic infrastructure is lacking, unemployment is soaring and inflation is galloping.

    Now, on top of these problems, comes the new round of sanctions that are just beginning to hurt.

    Iran's demise may be too early to call - after all, the state is still in firm control of all the tools of repression. But its predicament suggests that Iran may turn out to be a house of cards.

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