Iran's Hot Winter Month of Dey

The month of Dey is supposed to mark the onset of winter in the Iranian calendar, but this year it has been too hot for the season. In the city of Mashhad, which is sacred to the Shiites, crowds took to the streets in protest; within a couple of days similar demonstrations were reported in around 100 population centres across the country. Shortly afterwards, U.S. President Donald Trump announced that his country would withdraw from the nuclear deal with Iran unless the document was amended to eliminate what he referred to as substantial flaws. These developments certainly came as a serious challenge to Iranian President Hassan Rouhani and his government. The question is whether Trump has anything to do with the Iranian protests.

This year's Dey month (the first day of winter in the Iranian calendar, beginning in December and ending in January) proved to be a hot one for Iran.

On Dey 7, 1396 (December 28, 2017), crowds took to the streets of the Shiites' sacred city of Mashhad in protest against growing prices and taxes, unemployment, and corruption. The demonstrations quickly became political and spread to around 100 population centres across the country within a couple of days.

On Dey 22 (January 12, 2018), U.S. President Donald Trump said his country would withdraw from the Joint Comprehensive Plan of Action (JCPOA) with Iran unless the document were revised to eliminate what he believed to be substantial shortcomings.

These developments certainly pose a challenge to Iranian President Hassan Rouhani and his government. The question arises as to whether the Iranian protests have anything to do with Trump's statements.

The difficult and controversial talks on Iran's nuclear programme have been going on for around 15 years, ever since the country's illegal nuclear research was brought to light.

In 2012, the EU and the U.S. (which were later supported by a number of other countries) introduced unilateral sanctions against Iran. These included total and partial restrictions on oil purchases from Iran, a ban on insurance services for Iranian oil tankers, and also banking restrictions, which proved the most effective as they put Iran outside the SWIFT system and stripped the country of its international banking transaction capability. As a result, Iran found itself on the brink of a grave economic crisis fraught with serious social upheavals.

Yulia Sveshnikova:
Ousting the JCPOA

Inflation in Iran hit 30.5% (some sources say 41%) between April 2012 and 2013 versus 21.5% in March 2012. In the same period, the Tehran Chamber of Commerce, Industries, Mines and Agriculture reports over 6,000 manufacturing enterprises (some 67% of the total number of such companies in the country) found themselves on the brink of bankruptcy. The situation was aggravated by the sharp decrease in oil extraction and exports in the country.

In January 2015, Mohsen Rezaee, secretary of the Iranian Expediency Discernment Council, said that the country's oil industry had suffered a loss of $100 billion as a result of the economic sanctions in the preceding three years. Iran also experienced constraints in accessing foreign investment, technology, and the international maritime transportation system. This confirmed the effectiveness of the financial and economic sanctions against Iran.

Up to 60% of Iran's population was below the poverty line in 2013, and significant social stratification was reported. The most affluent 30% of the population were enjoying incomes that were 15 to 16 times higher than those of the poorest 30%. The Central Bank of Iran estimated unemployment in the country at 12.2% (up to 20% according to unofficial sources and up to 40% among young people).

The Iranian leadership, including Supreme Leader Ali Khamenei, was well aware of the situation. The latter was forced during the 2013 election campaign to authorize the presidential candidacy of Rouhani, who is considered to be a relatively liberal politician and a reformist in Iran. Rouhani won the first round by a landslide, but he would not have even made it to the shortlist of candidates without Khamenei's approval. The supreme leader understood that Iran needed a politician that would be known in the west and would be acquainted with Western policymaking methods, including the West's approaches to the Iranian nuclear problem. Rouhani's primary objective as Iran's president, therefore, is to get the international sanctions lifted.

On 24 November 2013, just three months after Rouhani's inauguration, Iran and the P5+1 (the five permanent representatives of the EU Security Council plus Germany) convened in Geneva and signed a joint action plan that paved the way to the signing of the JCPOA in July 2015.

Most Iranians hailed this historic milestone. Crowds cheering the accord spilled into the streets of Iranian cities. This was Rouhani's finest hour. However, he and his supporters instilled too much hope in the Iranian population as to the lifting of the sanctions. The Iranians came to believe that the signing of the JCPOA meant immediate changes for the better.

In reality, the sanctions proved much more difficult to get rid of. The process turned out to be protracted and controversial.

Foreign companies had their own plans for Iran as a potential market, but the country's negative history of doing business stood in the way. Despite a number of positive changes related to the lifting of the sanctions, the Iranian leadership proved unable to solve all of the economic problems it was facing.

Some of Rouhani's plans were never implemented, for both objective and subjective reasons. Ever since assuming office he has been forced to fight his political opponents, first and foremost the ultraconservatives who are opposed to reforms and favour various risky schemes outside the country. Even though Rouhani has managed to stabilise Iran's economy, there are still plenty of problems, including rampant unemployment, which officially stands at 12.4% overall and at 28.8% among young people.

In addition, Iran's intensified political and military activity in Iraq, Syria, and Yemen has taken a heavy toll on the country's budget. In 2012–2013, Tehran allocated around $15 billion in loans to Syria alone. This money helped Syrian President Bashar al-Assad deliver on his social obligations across the territories controlled by the regime while simultaneously funding military expenditures. Iran bankrolled Syria to the tune of $8–9 billion in 2015, and roughly similar sums ended up in Al-Assad's hands in the subsequent years. The maintenance of Iranian troops abroad has also been extremely expensive.

Irina Fedorova:
Hypertension between Iran and the USA

In light of the aforementioned circumstances, and for the purpose of ensuring the Iranian economy's sustainability, Rouhani was forced to resort to unpopular measures, including when drafting the budget covering the period between 21 March 2018 and 20 March 2019. In particular, the president proposes cancelling a number of subsidies for the population and subventions to cover the cost of certain commodities as well as hiking taxes (including the departure tax, which is to be raised threefold). To make things worse, Iran has been hit by a bird flu epidemic, which claimed the lives of 15 million chickens; in December, this resulted in a sharp increase in the prices of eggs and poultry, which are among the Iranians' favourite and most affordable foods.

In other words, Iranians had enough grounds for discontent, and this discontent peaked last December. A vent was needed, and it was in Mashhad that one was found. Mashhad is the native town of Khamenei as well as a stronghold for the ultraconservative leader Ebrahim Raisi, Rouhani's chief rival in the 2017 election, and his father-in-law Ahmad Alamolhoda, a Shia Islamic cleric opposed the Iranian president's policy. Some sources suggest it was Alamolhoda who called on the city's residents to take to the streets in his hope to deal a blow to Rouhani. The opposition has been joined by Mahmoud Ahmadinejad, former president and a prominent ultraconservative opposition figure who is vocally opposed to Rouhani. Unconfirmed rumours have it that Ahmadinejad was detained in Bushehr after a rally during which he sternly criticized Rouhani.

It should be noted that no external forces influenced the recent Iranian events. Most of the protesters represented the poorest strata of society and the ultraconservative opposition to the Rouhani government; the latter are the least likely to fall for “Western propaganda”. It was not until later that Iranian students joined the protests in the universal spirit of youth rebellion.

The Iranian middle class, the most educated stratum of Iranian society on which Rouhani relies, chose not to support the protests and even spoke out against them. In this connection, Khamenei's statements to the effect that the protests were instigated by the U.S., Israel and, Saudi Arabia are nothing more than an attempt to manipulate society into believing that Iran is being besieged by external enemies for the purpose of uniting Iranians against the West.

It should be noted that the anti-government protests in Iran are exclusively about yet another manifestation of the on-going fight between reformists and radical conservatives. It was only in the context of the “Iranian mutiny” that Western media and the leaders of the U.S., Israel, and Saudi Arabia backed the protesters.

Trump's decision to attack the JCPOA has no links to the Iranian protests, either. The U.S. president's attitude towards the Iranian nuclear deal and to Iran in general has been well known ever since the 2016 presidential campaign, when he criticized everything even remotely related to Iran. After his inauguration, Trump continued with his anti-Iranian rhetoric, and reinforced it with actual steps.

ELN Group Statement:
Sustaining the Iran Nuclear Deal

Back in October 2017, Trump announced that Washington would revise the former U.S. strategy as applied to Iran, including by going back on the nuclear deal with that country. Trump gave Congress 60 days to decide whether the economic sanctions against Iran that had been suspended after the signing of the JCPOA in exchange for Tehran's promise to close its nuclear programme should be reinstated. This reinstatement would actually mean Washington's disengagement from the JCPOA.

The 60 days ran out in late December, but Trump chose not to officially withdraw from the nuclear deal in the absence of approval from the EU, above all from Germany, France, and the UK, which had participated in drafting and signing the JCPOA. In effect, Trump delivered an ultimatum to Europe: “This is a last chance. [...] Either fix the deal's disastrous flaws, or the United States will withdraw. […] No one should doubt my word. […] I hereby call on key European countries to join with the United States in fixing significant flaws in the deal, countering Iranian aggression, and supporting the Iranian people. If other nations fail to act during this time [120 days], I will terminate our deal with Iran”.

This is why the difficult fate of the JCPOA will largely depend on the decisions to be taken in Brussels, Paris, Berlin, and London. One should keep in mind that Russia, China, and Iran have ruled out the possibility of revising the deal in any way. The EU is also (for now at least) supporting the current wording of the action plan.

The U.S. certainly possesses enormous potential and a broad variety of instruments for applying economic and political pressure on the EU. Many European companies have found themselves facing the choice of doing business with Iran or America. However, the EU has Regulation (EC) 2271/96, which protects against the effects of the extra-territorial application of legislation adopted by a third country (of 22 November 1996). The document, which was drafted in the 1990s to counter U.S. extra-territorial sanctions against Cuba and Iran, bans the observance of extra-territorial sanctions, including those introduced by the U.S., which infringe upon the interests of EU business. Brussels may yet fall back on this regulation. At any rate, the fate of the JCPOA currently remains unclear.

On the other hand, Trump's actions against Iran and the JCPOA are clearly playing into the hands of the Iranian radical conservatives who oppose Rouhani's policy. These forces are historically against Iran's involvement in any nuclear talks with the “American imperialists” and have been vocally opposing the achievements of the JCPOA, accusing Rouhani of betraying national interests.

We may therefore say that the only U.S. link to the Iranian protests is that both Trump and the Iranian ultraconservatives are opposed to the JCPOA. It is entirely possible that Rouhani's opponents have been guided in their current round against the JCPOA not just by the general popular dissatisfaction but also by Trump's political activity. The nuclear deal was made thanks to Rouhani's diplomatic efforts, and its failure would deliver a massive blow to the Iranian president's image, which would certainly benefit his adversaries. In any eventuality, the U.S. House of Representatives did not pass a resolution in support of the Iranian protesters until 9 January, when the protest movement was all but over.

It should be noted that the current status of the JCPOA is very complicated: any amendments to the document are out of the question and, which is particularly important, Tehran is categorically against revising the action plan. This means that the only way out that Trump has left is to pull out of the JCPOA. This would result in unpredictable consequences at all levels and within all formats of global and regional politics, and might lead to severe repercussions for the situation in Iran.

President Rouhani and his team are facing a very complex problem. First, they need to analyse the causes of the protests and take measures to prevent their political opponents from availing of the situation in their fight against the government. Second, measures need to be taken to prevent the existing nuclear accord, which is fundamental to the reformers' current policy, from falling apart.