Protests spell trouble for Iranian government and JCPOA

Protests spell trouble for Iranian government and JCPOA

Over the past four days, Iran has been wracked by a series of anti-government protests in cities across the country. In the weeks ahead, Iran’s official response to these demonstrations will ultimately determine the durability of protestors’ claims of economic stagnation and failure of leadership. An unstable domestic political environment in Iran does not bode well for the continued success of the JCPOA.

Iran racked by anti-government protests

Sunday marked the fourth day of large-scale protests in cities throughout Iran. The protests started on Thursday (28 December) in the city of Mashad, Iran’s second-largest city where hundreds of demonstrators shouted anti-government slogans including “death to [President Hassan] Rouhani” and “death to the dictator”.

On Saturday, the government confirmed that two anti-government protesters were killed by unidentified gunfire in the town of Dorud in western Iran’s Lorestan province. The government suggested that “foreign agents” were responsible and that “no shots were fired by the police and security forces.” As of Sunday, hundreds of protesters had been arrested in cities across Iran, including Tehran, Iran’s largest city and the country’s political locus.

What’s behind the protests?

Despite the lifting of economic sanctions (including billions of dollars of Iranian assets previously locked up in foreign banks) under the 2015 nuclear deal, Iran’s economy has remained stagnant. Inflation is running above 10 percent while more than 3.0 million people are jobless and 35 percent of Iranians live below the official poverty line. Youth unemployment is particularly high.

The prices of basic goods, including eggs (poultry is a dietary staple in Iran), have increased recently by upwards of 40 percent.

At the same time, Iranians are growing increasingly frustrated by what they view as a government riddled with corruption and economic mismanagement. Earthquakes in November and December 2017 killed hundreds of Iranians in the western city of Kermanshah and injured dozens more in Tehran, respectively. In the November earthquake, hundreds of government-built buildings (some built within the past five years) collapsed or were severely damaged. The earthquake exposed a harsh reality: Rampant corruption inside Iran’s state-run bureaucracy has significantly undermined Iran’s infrastructure.

What has been the Iranian government’s response?

On Sunday evening (31 December), Iran’s President Hassan Rouhani made a rare public appearance on state-run television. Addressing the country-wide protests, Rouhani said Iranians maintain the right to protest and criticize but that such actions should align with the public’s safety and well-being.

Rouhani suggested that the government and the people should “work hand-in-hand” and “as partners”. Rouhani’s comments come on the heels of Supreme Leader Ayatollah Ali Khamenei’s comments in which he seemed to empathize with protesters’ concerns over “high prices, inflation and recession”.

Some of the protesters were recorded shouting “Reza Shah, bless your soul.” Tehran prosecutor Abbas Jafari Dolatabadi was quoted as saying that “after giving thousands of martyrs for the Revolution [which took place in 1979 and led to the founding of the current Islamic Republic of Iran], the nation will not return to dark era of Pahlavi rule” referring to the period of rule from 1925 until 1979 which ended with the deposing of Mohammad Reza Shah Pahlavi, the last Shah of Iran.

Where do other countries currently stand on the protests?

US President Donald Trump was quick to chime in over Twitter. Trump, who has been particularly vocal about Iran’s aggressive behavior in the Middle East, suggested that “peaceful protests” be allowed to continue and that the “world is watching”:

Trump, never one for mincing his words, later suggested that the Iranian people were finally “wising up” to their government’s increasingly controversial role in the Middle East. Iran has provided military and logistical support to Syrian President Bashar Al-Assad in addition to funneling arms and equipment to its various pro-Shiite militias throughout Iraq and Afghanistan. Trump indicated that the US was closely monitoring the situation for human rights violations:

On Saturday, a demonstration of solidarity took place in Toronto, Canada. Canada is home to more than 95,000 Iranian immigrants. In an official statement, Canada’s governmental office of Global Affairs expressed its initial optimism over the protests taking place in Iran and it too expressed its support for peaceful assembly:

“Canada is encouraged by the Iranian people who are exercising their basic right to protest peacefully. We call on the Iranian authorities to uphold and respect democratic and human rights. Canada will continue to support the fundamental rights of Iranians, including the right to freedom of expression.”

Rapid Response: Analysis

History doesn’t repeat itself, but it rhymes

Never far from the back of any astute political observer’s mind is the wave of protests which wracked the Arab world beginning in 2011 popularly known as the “Arab Spring”. Many of the conditions which Iranians are currently protesting – high food prices, lack of jobs, corruption and mismanagement, etc. – were the principal causes of the revolutions which swept Tunisia, Egypt and Libya in 2011. Surely, Iran’s leaders are carefully considering just such events.

Iran’s dual system of clerical and republican rule, in which each faction vies for control, may be particularly tested in the months ahead. Supreme Leader Khamenei, commander-in-chief of the armed forces, wields significant power over the Iranian bureaucracy, especially over matters concerning foreign and economic policy. Although his initial reaction to the protests have been somewhat subdued, we should expect a stronger response from Khamenei especially if the demonstrations continue to increase in size.

If the protests are to continue into the New Year as they appear likely to do, this will present several challenges for the current government in Iran in addition to creating new uncertainty in the Middle East. President Rouhani’s election in 2013 was viewed as a win for moderates and more secular Iranians in general.

Rouhani’s election followed the deeply controversial 2009 presidential election when thousands of Iranians took to the streets under the banner of the “Green Movement” to protest the disputed election of hard-liner President Mahmoud Ahmadinejad. In those protests, demonstrators were violently beat back by security forces and pro-government militias. Hundreds of protesters were arrested, many of which were detained under spurious charges and later found to be tortured. More than 30 people were killed, some of which were ostensibly shot dead by the Basij, a paramilitary volunteer militia.

US policymakers: A nuclear Iran is far more concerning than an unstable Libya

The nuclear deal signed in 2015 (the Joint Comprehensive Plan of Action or “JCPOA”) was touted by its leaders as a game-changer for Iran’s flailing economy. In exchange for allowing the international community access and continued monitoring of their nuclear testing and enrichment facilities, the P5 +1 (China, France, Russia, UK, US and Germany) agreed to lift long-standing economic and trade-based sanctions on Iran’s economy.

However, promised economic gains have been slow to flow down to ordinary Iranians. Much of the economy remains under the tight-fisted control of the Islamic Revolutionary Guards Corps (“IRG”). Foreign direct investment remains at depressed levels, even despite big-ticket deals like the much publicized Boeing and AirBus agreements.

Despite it being controversial, the JCPOA was viewed by the international community as a source of stability in an otherwise unstable part of the world. US President Trump continues to threaten to de-certify the nuclear deal, as he is required by law every 90 days. However, ultimate authority to withdraw from the agreement rests with the US Congress. If the currently sporadic demonstrations metastasize into something larger or especially if the protests turn more violent and when considerable human rights violations are apparent, this could put additional pressure on the US Congress to weigh possible alternatives.

For US politicians, the most worrying prospect is of regime collapse in Iran, whereby an otherwise stable power-sharing agreement between Rouhani and Khamenei descends into a protracted street-level civil war (see: Syria) or de-legitimized government. This scenario has a low likelihood, but could be triggered if the protests are followed by harsh crackdowns rather than symbolic concessions, and if economic benefits continue to be elusive.

About Author

Steven Spinello

​Steven A. Spinello is based in New York City. He currently works as a Senior Analyst for EY. Steven holds a B.A. in economics from the University of Maryland. His primary writing interests include global finance, ​trade, ​maritime security​, ​and interstate relations especially at it relates ​to the US, ​Latin America and Asia.​