By Edward Carney
On Thursday, a number of reports appeared in international media which pointed to the significant impact US sanctions have already had on the Iranian economy.
The sanctions that were suspended under the 2015 Iran nuclear deal began to return in August, 90 days after President Donald Trump withdrew the United States from the agreement. A second round of these sanctions, including those that target global customers for Iranian oil exports, is due to be imposed in November.
This speaks to the clear potential for those sanctions to have an even greater impact in the near future, while the regime and its citizens are already feeling the pinch.
Reuters was among the outlets that reported on the sanctions’ effect on Thursday, and it quoted White House National Security Advisor John Bolton as saying, “I think the return of the sanctions has had a devastating effect on their economy and I think it’s going to get worse.”
Bolton has played a prominent role in promoting the Trump administration’s Iran strategy, which seeks to use sanctions in order to secure substantial changes in the clerical regime’s behavior.
Bolton also has a long history of supporting the leading Iranian opposition group the People’s Mojahedin Organization of Iran. In that capacity, he has endorsed the PMOI’s vision of regime change at the hands of the Iranian people, enabled in part by US-led pressure.
Although the Reuters report indicates that the sanctions pressure is leading to higher prices and lesser availability of staple goods for much of the Iranian public, it also points to the fact that Iranians do not generally blame the US for those effects.
The report notes that government interventions have sought to “limit economic instability that has fueled public protests and criticism of the government this year,” but these efforts have had little effect.
The Islamic Republic was rocked by a nationwide uprising at the end of 2017 and beginning of 2018 that was initially based on economic grievances but quickly took on a larger anti-government tone. Related protests have recurred in countless Iranian cities and towns ever since.
The Reuters report also highlights the fact that there are good reasons for the Iranian people to blame their own government for their hardships, even in the midst of pressure from foreign entities.
Tehran has ostensibly tried to safeguard popular commodities like tomatoes by banning their export, but persons with connections to the government and upper echelons of Iranian society have continued those exports virtually unimpeded.
This is typical of the financial activity of hardline institutions like the Iranian Revolutionary Guard Corps, which has long dominated the black market and reportedly controls more than half of Iran’s gross domestic product.
While smuggling and government-permitted illicit transactions may soften the impact of sanctions on the regime itself, they also promise to further fuel the anger and discontent of ordinary Iranians, including those who have been participating in the past 10 months of protests.
Many such demonstrations are presently continuing at full scale, and they bring attention to the fact that the Iranian regime’s reaction to economic pressure largely involves denying and suppressing the people’s economic distress, instead of working to alleviate it.
On Wednesday, the Center for Human Rights in Iran reported upon the closure of independent businesses in many Iranian cities, an action that was undertaken “to protest against hyperinflation and economic instability.”
Other outlets described the merchant strike as being an act of solidarity with truck drivers throughout the country, who have been on their own strike for nearly three weeks. But as CHRI points out, Iranian state media has sought to downplay the protests, either denying them outright or portraying them as the product of plots by foreign “enemies” including the United States.
At the same time, both the truck drivers and the bazaar merchants have been threatened with arrest and harsh punishment as part of an effort to break their strikes. CHRI quoted Sadeqh Larijani, the head of the Iranian judiciary, as calling the protests “threats against the country’s economic order” and saying that they “are punishable by execution—if found to be on the level of ‘corruption on earth”—or up to 20 years in prison and the confiscation of all possessions.”
In this sense, Iranian officials may be seen as assigning blame for economic hardships not to their own mismanagement and self-serving policies or to the re-imposed sanctions, but rather to the Iranian people themselves.
Indeed, Supreme Leader Ali Khamenei has repeatedly declared that his country will weather the sanctions and that the “enemy” will be disappointed by the failure to seriously impact the regime, provided that the Iranian nation and the Middle East region maintain “unity”.
This was the message of Khamenei’s remarks that were carried by Fars News Agency on Thursday. The supreme leader also urged Iranian officials to find solutions to the economic hardships, but one might read this as a thinly veiled order to manufacture solutions by suppressing public expressions and spreading disinformation about the extent of the sanctions’ impact.
After all, his statement was preceded this week by considerable efforts to prevent truthful reporting on the financial situation – efforts that seem to have been prompted by the supreme leader as well.
EA Worldview quoted Khamenei as saying last month that economic reporting “intensifies the anxiety of public opinion and causes the pessimism virus to spread. It is not correct to speak in a way that the audience is terrified and thinks that all is lost.”
This week, Mahmoud Vaezi, the chief of staff to President Hassan Rouhani, followed up on this by summoning the editors of Tehran’s newspapers and sharing with them the official government talking points regarding the economy.
The same report indicates that these remarks coincided with a crackdown on independent reporting, in which Iran’s chief of cyber-police acknowledged shutting down 500 news websites and launching investigations of a further 200.
Additionally, Tehran has sought to scapegoat a handful of individuals for the ongoing crisis, even while denying the seriousness of that crisis. On Thursday, it was announced that three currency traders had been sentenced to death for allegedly hoarding and profiteering with foreign currencies, although such actions are not defined as violations of any Iranian law.