It’s not a revolution yet, but what’s happening in Iran signals that the long-running crisis in relations between Iran and the United States may be nearing a turning point. Iran’s currency, the rial, has collapsed, and it’s plunging further each day, as prices skyrocket and Iranians scramble to find hard currency. Having already lost half of its value since 2011, it fell another 40 percent this week. A big reason: Iran’s oil exports — which once topped 4 million barrels per day — fell from just over 2 million barrels per day in 2011 to about 1 million barrels per day today, leaving a gaping hole in Iran’s foreign exchange earnings.
The collapse the rial, poses a fundamental challenge to Ayatollah Khamenei. When I last visited Iran, in 2009, a nearly universal refrain — among ordinary Iranians, business people, and especially among the circle of big-business types associated with Ayatollah Ali Akbar Hashemi Rafsanjani, a former president who backed the Green Movement — was that the pain of economic sanctions was biting harshly. Many asked, “Why endure this hardship and international isolation simply in order to protect a nuclear program that isn’t necessary for Iran’s future?”
Iran is still talking tough, pledging never to halt its nuclear program and blaming a “conspiracy” for the economic crisis.
However, things are unraveling. There have been street protests and strikes by bazaar shop owners in Tehran and Isfahan, and at least some protesters are chanting slogans critical of Iran’s support for Syria’s President Assad. “Leave Syria alone, think about us,” they chant.
That doesn’t mean that sanctions are working as intended. From the beginning, U.S.-led economic sanctions against Iran have had twin purposes: First, in political terms, the sanctions were useful for President Obama to allay right-wing and Israeli criticism that he wasn’t doing anything about Iran, and he could say that hawks needed to give the sanctions time to work. And second, though few advocates for sanctions really believed this, it was hoped that sanctions would compel or persuade Khamenei to end the nuclear enrichment program. The first purpose has been accomplished, mostly. The second, not so much.
Problem is, Iran is not a democracy. Despite the fact that Rafsanjani, the Green Movement, and others — especially in powerful, bazaar-based business class — might be willing to shut down or limit the nuclear program in order to rebuild ties with the United States, these forces, you’ll recall, were mightily suppressed in 2009. In 2012, they may be agitated over economic collapse and mismanagement by President Ahmadinejad’s feckless government, but their power to force a shift in policy is very limited. And it’s way too early in the current crisis to say that the fall of the rial will provoke massive political unrest across Iran.
So, the scenarios are:
One, that the crisis grows into a true political upheaval that forces Khamenei to change course, or even collapses the Islamic Republic’s regime.
Two, that the current, low-level manifestation spreads, but is contained by the regime, which resorts to increasingly tough (and, if necessary, even Syria-like) repression.
And three, that the regime in Tehran becomes increasingly unstable and, feeling cornered, launches some sort of military adventure or, in the worst case, opts to speed up its nuclear program with a crash effort to build a bomb.
In my view, scenario one is unlikely, if not impossible. Scenario three, the doomsday version, is also not likely, since Iran’s leadership is neither suicidal not deranged. That leaves some variant of scenario two, in which moderates and those advocating a compromise with the West are sidelined even further, especially in the run-up to the 2013 presidential elections in Iran next June.
Hardliners in Iran have unleashed a torrent of criticism aimed at Rafsanjani, the powerful former president, and in recent weeks both his son Mehdi and his daughter Faezeh — both politically active — have been arrested. Recently, Rafsanjani has called for a “unity government,” and he and his allies have quietly floated the idea of better ties with the United States, according to Iranian sources. And, according to Payvand:
Surprisingly, while pressures mount domestically and abroad, Rafsanjani has become politically active and appears comfortable and confident. He frequently discusses solutions to the current, critical situation that threatens the Islamic system’s stability. On September 26, 2012, after Mehdi’s arrest and Faezeh’s incarceration, he offered a multi-faceted solution to the crisis. Restoring national unity, opening the political atmosphere and pursuing policies of detente with the international community were among his six-part plan.
But, the conservatives and hardliners tied to Khamenei don’t want any part of it. At the same time that they are trying to blame Ahmadinejad for all of his Iran’s troubles — and, indeed, Ahmadinejad mismanagement of the economy has made a mess of things — they are also having none of Rafsanjani’s message. As the Financial Times reported last month:
Hamid Rasaei, a radical fundamentalist cleric, was explicit in warning against “rolling out the red carpet for the national unity government model of Mr Rafsanjani” and said any such move had to overcome the opposition by hardliners as “the most important hurdle”.
Meanwhile, there are rumblings that Iran might be interested in kick-starting talks with the P5+1 again, even though it’s extremely unlikely — i.e. impossible — that President Obama will make even a gesture of conciliation toward a deal with Iran before the election. The next weeks will be critical.
First published in The NAtion.
Robert Dreyfuss, a contributing editor for The Nation magazine, is an investigative journalist in Alexandria, Virginia, specializing in politics and national security. He is the author of Devil’s Game: How the United States Helped Unleash Fundamentalist Islam, and is a frequent contributor to Rolling Stone, The American Prospect, and Mother Jones.
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