There can be little doubt that the nationwide street protests that took place in late December 2017 and early January 2018 were a response to Iran’s economic climate, and that international sanctions played an important role in helping to create those conditions. Following those protests, and especially over the course of the summer, people staged further demonstrations in different cities, with people going to the streets to voice their demands for improvements and greater opportunities.
With that in mind, it is not a surprise that following the re-imposition of US sanctions on November 5, many analysts have been discussing the possibility of fresh protests across Iran.
During the events of December and January, Iranian authorities managed to get the unprecedented round of protests under control in less than two weeks. The police and paramilitary (the Basij) forces were responsible for suppressing protests, and there was no need for the Revolutionary Guards to be deployed.
However, according to official reports from the Ministry of the Interior, protests took place in more than 100 Iranian cities and towns. This was an indication that there was a significant potential for public protest throughout the country and that, should the economic hardship worsen following the new round of US-imposed sanctions, this tension could rise to the surface again.
How the Sanctions Make Suppression Less “Affordable”
The Iranian political and administrative system has always been subject to considerable corruption, inefficiency and incompetence. But a sharp decline in oil revenues will reduce the ability of the government to fund the already-limited amount of development projects, thereby intensifying economic problems across different sectors.
Such circumstances might lay new groundwork for social unrest. The recent protests were most likely fueled by economic factors including increasing inflation or unemployment, shortage in goods and services, environmental crises, or increased public sensitivity to government corruption cases. All of this economic dissatisfaction has the real potential to be converted into political demands and slogans — because even if the public’s dissatisfaction is totally based on livelihood issues, many protesters will blame the Islamic Republic authorities for this situation, and therefore, their protests will target the Iranian regime.
Such public protests, in addition to their political and security consequences, may also increase the economic costs the establishment will have to bear. Some of these costs will be required in order to resolve the urgent problems of people working in various sectors or living in various regions who have decided to voice their grievances through protesting. The allocation of extra funds in these cases is not the usual practice in Iran, but in very specific situations where a public protest turns into a security crisis, this can be the case. These funds can be used for various purposes – ranging from the partial payment of delayed salaries to supplying water to regions where water crises have triggered public protests. Increased economic pressure on the Iranian government reduces its ability to allocate such funds, which can bring about the intensification of street protests.
Another type of economic cost the regime will have to absorb is the direct expense of cracking down on protesters. For instance, during the events of December and January, people in dozens of cities took to the streets, and the government had to mobilize thousands of law enforcement and intelligence and security forces to deal with the situation. Such measures require significant boosts to budgets, which, of course, the regime will provide even under the worst financial conditions. But if the economic crisis intensifies, securing such emergency security funds will be much harder than in normal times.
The Regime’s Scenarios for New Sanctions
Conditions in the Islamic Republic after the sanctions were re-imposed on November 5 will depend on the extent to which Tehran might be able to sell oil and how accessible that income will be. If the EU, China, Russia and others can guarantee enough oil exports and financial transactions for Tehran, the Iranian regime will portray it as a victory, reduce its expenditure and wait for the next US presidential election and a possible change in the American administration.
But if the European and Asian powers are unable to mitigate the effects of the new oil and financial sanctions, the Islamic Republic will try to resolve its problems in ways other than dealing with the West, focusing on different measures such as bypassing the sanctions. If the new situation finally results in Iran’s withdrawing or being expelled from the nuclear agreement (the JCPOA), US pressure on Tehran will be intensified with the help of the EU and possibly other world powers.
EU powers including France, Germany and the UK will try to maintain the JCPOA, emphasizing that an international agreement that has been supported by several world powers cannot be annulled by a new administration in Washington. But if confronting the US over Iran brings about serious financial consequences for European countries, they will not continue this confrontation forever and at any cost. Under such circumstances, the best scenario for EU powers to get rid of the nuclear agreement will be Iran’s withdrawal from the agreement or Tehran’s violation of the JCPOA terms so that the EU’s commitment to this agreement can be terminated in a face-saving manner.
In the short term, this scenario will, of course, benefit the opponents of the nuclear agreement in Iran. In particular, this situation will be profitable for those state agencies that are in charge of bypassing the sanctions, such as the Revolutionary Guards, thus strengthening — even more than now— their position within the Iranian political system. In the long run, however, the attempts of state agencies to circumvent the sanctions have little chance of succeeding, as was the case in the last two years of the government of Mahmoud Ahmadinejad.
Nevertheless, even if the Iranian regime is unable to meet its minimum financial needs in the post-sanctions era, the leaders of the Islamic Republic will possibly not make any changes to their domestic policies. On May 21, American Secretary of State Mike Pompeo outlined a list of 12 conditions Iran must comply with to avoid being hit with the “strongest sanctions in history”, but none of the conditions had anything to do with the Islamic Republic’s domestic policies. In addition, Donald Trump himself offered on July 30 to meet Iran's leaders with "no preconditions" and "any time they want." Based on such indications, the Iranian highest-ranking authorities are apparently convinced that the priority for the Trump administration is not these leaders’ behavior within their own country and toward their own people, and that, at worst, they will need to give concessions over their regional policies only.
But this perception might by itself create new potential risks for the Islamic Republic. In fact, if Iranian leaders believe that, even under the most difficult circumstances, they do not need to change their domestic behavior, their suppressive policies will continue without hesitation. Adopting such an attitude at the domestic level in the post-November 5 era could intensify the public discontent vis-a-vis the Iranian regime.
In fact, the combination of such internal discontent with the intensification of the economic crisis due to new sanctions could refuel the society’s anger toward the Iranian regime, which may directly increase the possibility of new rounds of public protests.