Iranians Furious at Regime as Economy Teeters on Verge of Collapse
Pictured Above: Demonstrations in the Tehran bazaar by merchants and shopkeepers over rising inflation in the country in June. Credit: National Council of Resistance of Iran.
By Israel Kasnett
(JNS) Thousands of Iranian citizens have been protesting across the country, including in major cities such as Tehran, Karaj, Shiraz, Mashhad, Isfahan and Qom over what appears to be the imminent collapse of the economy, the first of two stages of the re-imposition of full U.S. sanctions went into effect following U.S. President Donald Trump’s decision in May to withdraw from the 2015 nuclear deal.
Iran’s regime is facing a general population furious with its mishandling of funds—money that should have gone towards making Iran a better place to live, but instead goes to supporting terror around the world. Iran’s currency, the rial, has dropped nearly 80 percent from a year ago.
As reported on London-based Saudi news outlet Asharq al-Awsat, videos posted on social media showed rallies in a number of cities, with many of the protesters shouting “Death to Hezbollah” (the Lebanese terror proxy of Iran), as well as “death to the dictator.”
Iranians also remain up in arms over severe water shortages as a result of an ongoing draught, in addition to high unemployment.
As U.S. sanctions snap back on Aug. 6, Iranians are even more fearful that their economy will collapse. However, The European Union, which its three signatories of the Iran nuclear deal—the United Kingdom, France and Germany still remain committed to it, has expressed its disappointment with Trump’s decision and has vowed to find ways to protect European businesses working with Iran.
Israeli Prime Minister Benjamin Netanyahu, however, praised the decision, as he did the American withdrawal from a deal he said not in Israel’s security interests—or the rest of the world’s, for that matter.
“I congratulate President Trump and the U.S. administration for making the important decision to impose sanctions on Iran. This is an important moment for Israel, the U.S., the region and the entire world,” said Netanyahu on Monday. “It represents the determination to curb Iran’s aggression in the region and its ongoing intention to arm itself with nuclear weapons.
“I call upon the countries of Europe, which talk about stopping Iran, to join this measure. The time has come to stop talking and to take action, and that is exactly what the U.S. has done and what Europe should do.”
‘Can’t cut themselves off’ from the U.S. market
Barak Seener, CEO of Strategic Intelligentsia based in England, and who has just published a book in conjunction with the Jerusalem Center for Public Affairs titled Commercial Risks Entering the Iranian Market, told JNS that the E.U. will likely follow along with U.S. sanctions since “the U.S. market is too large,” and “they can’t cut themselves off from it.”
However, Seener pointed out a hole in the sanctions since there are Chinese energy companies that do not need to engage the American market. They can enter Iran and will not face any consequences. “The U.S. does not have any leverage with them, so these are the kind of gaps that still exist,” said Seener.
According to Seener, “the regime will not change due to sanctions or from being isolated from the international community. What will prompt change will be implosion within the country due to stresses such as a water shortage or the plummeting rial. There may be internal opposition to the regime, but the regime will be more coercive and clamp down on any dissension within the country.”
This is exactly what has taken place. The Iran Revolutionary Guard Command has an enormous amount of money with which to fund its suppression activities, some of it thanks to the last U.S. administration’s transfer of $1.7 billion towards the end of President Barack Obama’s term.
Speaking at a JCPA conference recently, Israel’s Minister of Energy Yuval Steinitz noted that there are a number of concerns involving Iran. The first is the economy.
“We already see the results,” he said. “Their economy is on the verge of collapsing. Maximum one year from now, the situation in Iran will be extremely grave, and they will have to consider what to do. Probably they will have to come back to the negotiating table, and make significant concessions on the nuclear front and possibly on other fronts as well. … Hopefully, there will be positive consequences, but there may also be negative consequences,” he warned. “Iran could just quit the agreement and move closer to producing nuclear weapons.”
Steinitz said another consideration that “no one seems to be discussing,” is the U.S. military threat against Iran. “The understanding among the Iranian leadership must be that if they suddenly start moving toward the nuclear option by enriching uranium, then the U.S. will go to its military option. Iran needs to understand this in advance. It should be crystal-clear to the Iranians that if they move suddenly to the other end, their nuclear infrastructure will be destroyed.”
A grim picture of the situation
Chelsi Mueller, a researcher in the Moshe Dayan Center for Middle Eastern and African Studies and the Alliance Center for Iranian Studies at Tel Aviv University, agrees that protesters blame the regime for “spending money and valuable resources in far-off places such as Gaza, Lebanon and Syria, while Iran’s citizens are suffering from economic hardship. … They are chanting anti-government slogans.”
As she explained, “Iranians are very worried about the future of the country. … The decision taken by U.S. President Donald Trump to quit the nuclear deal and reimpose sanctions has both inserted a shock into the system and created a lot of panic. … Iran’s currency, the rial, plunged in value, hitting a record low against the dollar. … Protests and labor strikes are breaking out in Tehran and in other cities.”
Mueller explained that the protesters come from all walks of life, “including businessmen, shopkeepers, university students, factory workers, national rail employees and truck drivers.”
As the rial fell, the Iranian government appointed a new head to its central bank, “but this measure was viewed by many as insufficient, or ‘too little, too late,’ ” said Mueller.
She believes that the regime is fearful that the protests could widen in the coming days, saying “this is a very realistic scenario.”
Mueller paints a grim picture of the situation in Iran. “Prices are skyrocketing, as is inflation. Wages are low, and some public-sector employees are still waiting for paychecks. The Iranian regime is increasingly accused of mismanaging the country. With new sanctions [coming] into effect this week, the situation will get worse and not better.”
Could U.S. support of Iranian public dissent make a difference? The Obama administration never gave Iran’s 2009 Green Revolution any support, but Seener believes that if Trump backs the Iranian public, it could make a difference.
“I think he has every reason to do so,” he said.