By Mortezagholi Raissi
Plagued by domestic turmoil and the Trump Administration threatening regime change, not only the government in Iran but the entire theocratic regime too are faced with a far from envious situation, according to political observers.
What started off as protests spurred on by the deteriorating economic conditions in Iran and the inflation in prices of basic necessities beginning of 2017 partly turned into “riots”. These prompted Iran government spokesmen Mohammad-Baqer Nobakht declare that the government recognizes the people’s right to protest within the framework of citizens’ rights and the Constitution. However “rioters and protestors are not the same”.
Protests that were triggered in the capital city, spread to Tehran’s Grand Bazaar – considered the heart of the Iranian economy. Traders shut their stores in June 2018 to protest rising prices and the weakening of Iran’s currency as Iranian officials took action to allay concerns that an economic crisis was looming.
Retailers and gold sellers kept away from the bazaar to gather at main meeting places, Bloomberg reported quoting the semi-official Fars News agency. They said they were afraid they’d lose money if they kept their shops open, according to Fars. Security forces were sent to the bazaar and surrounding areas to maintain order, the semi-official Iranian Labour News Agency reported.
The protests erupted the same day the Central Bank of Iran said it would set up a secondary foreign exchange market the following week to ease the dollar shortage that is likely to worsen as U.S. sanctions resume. The market’s introduction is the latest in a series of steps Iran has taken to cushion the sanctions’ impact.
The London-based Guardian reported that traders from the bazaar included those whose merchants supported Iran’s 1979 Islamic revolution. “We are all angry with the economic situation: we cannot continue our businesses like this. But we are not against the regime,” The Guardian quoted a merchant, who asked not to be identified.
According to Bloomberg, Iran’s fragile economy, long hurt by international sanctions, mismanagement and corruption, has gone into a downward spiral in recent months in anticipation of the U.S. pullout from the 2015 nuclear deal. The rial has plunged against the dollar, inflation was 9.7 percent in May, and the country is in the throes of a credit crisis, provoking sporadic anti-government protests.
Even before the U.S. withdrew from the accord in May 2018, Iran’s central bank imposed tight restrictions on foreign currency transactions in an effort to shut down a flourishing black market and prop up the rial. One month later, in June, Iran banned import of 1,400 foreign non-essential and luxury goods to reduce the amount of foreign currency leaving the country.
According to reports in Iranian media, protests that initially included economic dissatisfaction and price increases now also encompass the country’s political situation. Not the least because of the repression of protests by Revolutionary Guards and other security forces, the slogans are getting louder against the domestic and foreign policy of the country.
It has been observed that protest slogans have been demanding what the U.S. and Israel want, namely that Iran must withdraw from Lebanon, Yemen, Syria and other parts of the region and instead of providing financial aid to Hezbollah and other organizations focus on its own people, which is struggling with an increasingly disquieting economic situation.
Ayatollah Ali Khamenei, the supreme leader and apparently the sole ruler, is blaming the U.S. for protests in the country. Among other things, he told military commanders in early July: “U.S. coalition with other countries in the region is creating economic crisis, civil unrest and insurgency in Iran, they want to separate the people, the government and the system, but we will resist.”
Meanwhile, the situation is reported to have become more critical for President Hassan Rouhani, in the face of the conservative forces trying to hold him responsible for the desolate economic situation, alleging that his government has messed up the country. These forces have indicated that they will soon topple Rouhani by a motion of censure in the parliament.
Besides, several well-informed domestic and foreign commentators have expressed the view that Khamenei is considering firing the elected President, a view that is supported by reports that “the fate of Rouhani is questionable”.
Against this backdrop, President Rouhani visited Europe early July in a bid to rescue Iran’s nuclear deal with global powers. But after his meetings with officials in Switzerland and Austria, which currently holds the EU presidency, the president was not very optimistic about the deal’s future. “The package proposed by the EU does not contain concrete and practical solutions,” Rouhani said on July 5.
According to the official website of the Iranian president, Rouhani told German Chancellor Angela Merkel in a telephonic conversation that Europe’s offer lacked an action plan or a clear roadmap to continue the cooperation.
At a meeting in Vienna, foreign ministers tried to save the nuclear agreement. The goal was to make it clear to Iran that it can still benefit from this agreement, said German Foreign Minister Heiko Maas. “We are now looking for ways to keep payments open for Iran, so Iran does not see any reason to withdraw from this agreement.”
These discussions have been taking place in the context of the U.S. decision has already started adversely impacting some European companies. For example, French automaker Peugeot now has started viewing Iran as too risky a place to do business. For the U.S., the window between May 8 and November 4 deadline is the drawdown period when countries importing oil from Iran should start reducing immediately and bring to zero by November 4 deadline.
The move applies not only to Europe but also to India, China, and Turkey. Following this announcement, oil prices rose sharply, and depressed currencies of many countries (in India, rupee breached 69 a dollar mark), making imports of critical products more expensive. Iran is OPEC’s third largest oil producer, exporting two million barrels a day.
Britain, France, Germany, and the European Union as a whole strongly protested Trump’s withdrawal from the Iran nuclear deal and vowed to protect their companies from “secondary sanctions”, which punish companies from other countries that engage in business with sanctioned sectors of the Iranian economy. The US, however, says that secondary sanctions are in place in Iran since 1996.
The U.S. Ambassador to the UN, Nikki Haley, was recently in India and in her meeting with Prime Minister Narendra Modi urged on cutting oil imports, but was, according to reports, politely told that it would be difficult for India to make any significant cut. India shall be unwilling to bend under the U.S. pressure, as its relations with Iran range from the energy trade to connectivity projects, particularly the development of Chabahar Port, and cutting trade between the two countries could hurt India’s long-term interests.
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