Supreme Leader Admits Sanctions have Been Effective, But Insists His Regime Will Survive

Supreme Leader Ayatollah Khamenei has given his most expansive and detailed Friday prayers address since March, when the coronavirus outbreak officially began in the Islamic Republic. The speech, which was delivered online, addressed wide-ranging social and political issues directly, with the key message revolving around United States sanctions and his interpretation of what they were trying to achieve. The Leader's remarks reveal that he has a full understanding of the impact of the sanctions, and is at the same time determined to show he maintains full control of the situation.  

During his speech, he distinguished between sanctions that targeted "short-term" goals and those that would have a longer or "lateral" impact. In the short term, the Leader said, the sanctions were designed "to agitate the Iranian people, to confuse them into standing against to the system and the government." It was the first time Khamenei has explicitly mentioned the influence sanctions have had on popular uprisings.

In his view, however, the protests have been fueled by a damaged economy and have nothing to do with any other political or social issues. This fits in with the Supreme Leader’s habit of ignoring the full and true motives behind the public’s dissatisfaction — whether during the protests of December 2017 and early 2018 or those of November 2019 — and allow him to debunk what he regards as empty predictions about how the people will respond in future. These include predictions made by officials from Hassan Rouhani's administration about economic upheavals and unrest. In general, Khamenei’s way of dealing with such malaise is usually different from Rouhani’s.

Reminding the Public of the Battle Lines

Rouhani’s officials hope to restart negotiations with the United States, and they are waiting for the green light to do so. This is further intensified by the fact that Rouhani would like those negotiations to be on a sure footing by the time he leaves office in 2021 so that he leaves with a legacy of which he can be at least somewhat proud. Khamenei, however, does not want to give this privilege to Rouhani or President Trump, even though he clearly understands the economic damage at stake, as well as the possibility of widespread unrest.

In his address Khamenei referred to the US president in humiliating terms, branding him an old man (despite Khamenei being seven years Trump’s senior) who needed the negotiations to bolster his chances at re-election. For his part, Trump has told Iranian officials they should not wait for the outcome of the upcoming presidential election to negotiate with the United States.

The Supreme Leader also spoke of the work of Hassan Rouhani's government having come to an end, urging the public to look forward to the next government, a fresh,“revolutionary” administration with formidable energy and power. As has been his habit, the Leader slammed the nuclear deal, officially known as the Joint Comprehensive Plan of Action (JCPOA) and the government's efforts to preserve it, and specifically singled out the Instrument in Support of Trade Exchanges mechanism (INSTEX) as a useless “toy” with no purpose. At the same time, of course, despite repeated and sustained attacks on it, he has still not insisted outright that Iran abandon the deal. 

Khamenei’s solution for how Iran's economy will keep afloat hasn’t changed: he has consistently called for Iran to reduce its dependence on oil, a tactic that has so far failed. He also ominously referred to the country’s currency crisis as a "security and political" issue, so it’s likely that crackdowns and arrests are on the way.

Sanctions and Proxy Wars

If Khamenei was uncharacteristically more up front about protests, he also appeared to acknowledge that sanctions have had an impact on Iran’s regional influence and its proxy wars. These translate to financial, military and ideological support for militia groups including pro-Bashar al-Assad groups in Syria and Hezbollah in Syria, which he called “resistance groups in the region.” The dismantling of these operations was what the Supreme Leader meant by the "lateral" goals of the sanctions. Iran’s enemies in the region have raised this issue in the past, and accused the Islamic Republic of using funds gained from deals generated from the JCPOA to fund these militia activities. 

Reuters and other media outlets had also reported that the pressure of sanctions had reduced Iran’s support for Iraqi Shia militias and the government of Bashar al-Assad. But Hezbollah's secretary general Hassan Nasrallah said previously, "Iran can supply fuel and electricity to Lebanon without the need for dollars and in the national currency,” suggesting that the impact of the sanctions was limited. 

But the Leader has now explicitly and semi-publicly acknowledged that one of the sanctions’ goals is to strike a blow to Iran’s influence with these groups, groups that remain, from the perspective of the officials of the Islamic Republic, one of the most important tools of pressure they can apply on the United States. In addition to the strength they give to Iran in its conflict with Saudi Arabia, they also jeopardize and threaten American interests. And from Iran’s point of view, any weakening of their power could strengthen the US and lead it closer to taking military action against Iran.

However, it’s a fine balance, and these militias are limited in their use. If US attacks intensify, Iran could suffer a debilitating blow, as happened in the killing of Quds Force leader Ghasem Soleimani in January. Iran is unable to adequately retaliate for such actions, so, in order to prevent the Islamic Republic from having to be in this position, it’s vital that it manages the activities of its proxy militias with care.

“America's problem is that it can neither eliminate us nor surrender,” the Supreme Leader told his audience on July 31. This may well be the crux of the Leader’s new straight-talking. Islamic Republic officials may have ruled out a US military strike and don’t see any serious threat of an attempt to overthrow the regime at this time. Against this backdrop, the leader of the Islamic Republic imagines that the no-war/no-peace scenario with the United States will continue, without much change for now. 

The Supreme Leader knows that the danger is in Iran itself. Faced with empty public coffers and an angry population, he will do what he always does to tackle these problems: use force and suppression to keep them at bay.