Iraq News Now

Iran is funding militias throughout the Middle East while

turning its own people into paupers, Saudi Arabian Prince Turki al-Faisal told

CNBC Tuesday.

"I've described Iran in the past, and I think the

description still fits, the leadership in Iran has developed into a paper tiger

with steel claws," he told CNBC Tuesday.

"The 'steel claws' are the militias that they have

established throughout the Middle East, whether it's Hezbollah (in Lebanon) or

the Houthis (in Yemen) or the al-Abbas (a Shia militant group in Syria) or the

various militias operating in Iraq and Syria whose main purpose is to further

Iran's influence and its domination of the areas in the Middle East," he

said, speaking to CNBC's Hadley Gamble at the Milken Institute summit in Abu

Dhabi.

Iran and Saudi Arabia are rival religious and political

powers in the Middle East. Relations between the Sunni-majority Saudi Arabia

and Shia-dominated Iran have hit rock-bottom in recent years with civil wars in

Yemen, Syria and Iraq seen as proxy battlegrounds between the two countries.

Iranian support for the militant group Hezbollah in Lebanon and even,

sporadically, to the Taliban in Afghanistan, in the form of weaponry and

military training, has also made Iran a pariah on the global stage.

Economic tailspin

A sluggish economy, made worse by re-imposed US sanctions,

and rising food prices have also fueled civil unrest and demonstrations against

the government. Iranian President Hassan Rouhani said last month that Iran was

facing its toughest economic situation "in 40 years." The

International Monetary Fund has predicted the country's growth contracted by

1.5 percent in 2018 and will slump by 3.6 percent in 2019.

Al-Faisal likened Iran to a "paper tiger" because

he said poverty and protest were rising in the country with a

"dysfunctional" government. He said he didn't know whether there

would be regime change in Iran but hoped U.S. sanctions would change the

leadership's conduct.

"I think it would be premature to try to predict

anything of that sort but ... they're (the Iranian administration) is turning

its people into paupers instead of providing them with health services, with

food and with things people look forward to ... I hope with President (Donald)

Trump's sanctions we're going to see a change in the conduct in the leadership

in Iran. The Iranian people are the first victims of this leadership."

Ahead of the Trump administration's re-imposition of

sanctions last fall, hundreds rallied to demonstrate against hyperinflation

caused by the anticipated restrictions and economic mismanagement on the part

of the regime. Demonstrators in some towns attempted to set fire to buildings,

with scores detained and reports of at least one person killed. Censorship in Iran,

however, makes it hard to verify the actual size of demonstrations.

But while some in the Trump administration have alluded to

regime change as an aim of the punitive sanctions, the domestic fallout is

unlikely to shake the government's hold on power, Iran experts say. Iranian

security forces are powerful and highly loyal to the government.

Amid national celebrations of the 40th anniversary of Iran's

so-called Islamic Revolution, officials in Tehran have issued public statements

insisting that sanctions will not hinder the country's progress. In January,

European countries established a trade mechanism to facilitate non-dollar

transactions with Iran and effectively skirt the US restrictions, though its

success is uncertain.

It has long been feared that animosity between Saudi Arabia

and Iran could lead to open warfare — Iran has carried out numerous ballistic

missile tests and recent reports reveal what weapons experts say is a ballistic

missile manufacturing facility deep in the Saudi desert. And Saudi Crown Prince

Mohammed bin Salman told media last March that "without a doubt if Iran

developed a nuclear bomb, we will follow suit as soon as possible."

Al-Faisal said he couldn't comment on reports that Saudi

Arabia is building ballistic missiles at secret locations in the desert.

"I have not seen any official comment on them so I can't really comment on

whether missiles are being developed or not."