Economy, Geopolitics

Iranian Government’s Response to Protests Plunges Country into Chaos

On 15 November, the Iranian government announced a 50% hike in petrol prices, and angry Iranians took to the streets to air their grievances.  Protestors blocked roads, disrupted traffic and businesses, and marched against the current government.

 

The Islamic Revolutionary Guard responded with brutal force and killed an estimated 180 protestors, with some estimates going all the way up 450 civilian deaths.  The government also responded by shutting off the internet for the majority of the country, resulting in a disruption of the Iranian economy and many people’s daily lives.

 

The unrest comes at the end of a particularly difficult 2019 for the Iranian government, a year marked by increasing international and regional tensions that have damaged the economy and the well-being of its citizens.

 

Iran continues to face challenges from Saudi Arabia and its regional allies, and the shift in American policy has thrown the Iranian economy into uncertainty.  These factors have collided with the stagnating price of oil and the difficulty Iran has had in diversifying its economy away from oil dependence.

 

Protests

 

One of the biggest questions for those observing the region will be: are the protests a bigger sign of change within the country?

 

Hawkish Western foreign policy analysts have long been hoping and praying for and often predicting that Iran is ripe for regime change, but the immense power behind the Islamic Revolutionary Guard has been able to stamp out any unrest over the years.

 

The recent protests were characterised by the New York Times as the deadliest political unrest in the country since the Islamic Revolution 40 years ago.  Also, worth noting about the recent unrest is that much of it is targeted at the supreme leader, Ayatollah Ali Khamenei.

 

However, with the concentration of power in the state and military, it is hard to imagine an organic people’s revolution rising up without massive bloodshed.  Iran has time and again shown it is willing to forcefully suppress political dissent and the step to shut down the internet indicates the government is prepared to withstand considerable economic collateral damage to consolidate power.

 

But Iran’s economy will continue to limp under American sanctions, and an inflation rate of above 40% is preventing many Iranians from saving or conducting any meaningful economic activity.

 

Europe’s Response

 

The European Union has taken quite a different line to that of the Americans in their foreign policy approach to Iran.  After President Trump unilaterally left the Iran nuclear deal, the European Union has become the staunchest supporter of the multilateral agreement that seeks to prevent Iran from making a nuclear weapon.

 

Despite misgivings about Iran’s activities with its nuclear developments, the European Union has remained committed to the deal.  Of course, this entails facilitating economic trade within the country, the greatest incentive Iran has to abide by the deal.

 

The United States’ decision to abandon the deal deeply hurt Iran’s economic forecasts and the slack has had to be picked up by the EU.  In turn, the EU has had to be more lenient in the eyes of some.

 

Embattled Israeli Prime Minister Benjamin Netanyahu took umbrage with the Union’s unwavering support of the Iran deal in the face of the recent crackdown of Iranian protestors.  Israel and the United States have been the biggest detractors of Iran, along with the Saudis.

 

It does place the Europeans in a difficult spot, one in which their relative lack of military force is made up for by their promise of economic improvement.  However, the European market may only be able to prop up Iran’s economy for so long, and Iranian citizens will be likely to take to the streets again if conditions don’t improve.

 

Furthermore, despite the European Union being one of the most important proponents of the nuclear deal, Iran is still not always thrilled about their actions.  In fact, Iran has threatened to abandon the deal if the Union triggers deeper economic sanctions.

 

Some European leaders have also expressed misgivings with the deal largely due to domestic political pressure due to what many argue has been an overreach by the Iranian government in terms of the safety of Iranian expatriates.

 

Iraq

 

Iran’s neighbour Iraq has also been plunged into civil unrest in recent weeks, with some protesters specifically targeting what they see as an outsized Iranian presence in their country. 

 

While the Iraqi government has drawn much of the attention, many protestors have been calling for not only an ousting of the current political ruling elite but also of what they view as Iranian interference.

 

Anti-Iranian protestors went so far as to storm the Iranian consulate in Baghdad and replace the Iranian flag with an Iraqi one.

 

Iran has long been a supporter of the Iraqi regime, and in its recent downfall, protestors have pointed to Iran as part of the larger political problem within Iraq.

 

The Iraqi Parliament officially accepted Prime Minister Adel Abdul-Mahdi’s resignation on 1 December, but protestors have pledged to continue their fight until all of their demands are met.

 

Iraqi unrest does not bode well for Iran in its hopes to quell unrest within Iranian borders, and while the Iranian state has more resources at its disposal to use violence against protestors, outside factors could limit the stomach the supreme leader has for killing his own civilians.

 

With the EU potentially reconsidering its nearly unconditional commitment to the Iran deal due to internal politics, Iran may have to think twice about how much violence it deploys.  On the other hand, with the United States out of the picture diplomatically, Iran could make the calculation that any negative attention it gets from the unrest outweighs losing power since American economic support or diplomacy is an impossibility.

 

Whatever choice it makes, it is fairly safe to assess the situation in Iran as deeply unstable, and as a result the government will be desperate to get the economy