Tehran Protests

Now this is interesting: http://www.bbc.co.uk/news/world-middle-east-19812482

Reports say many shops in the central Grand Bazaar have brought down their shutters in sympathy with the demonstrators.Traders are angry at the lack of direction from the government in the crisis, which they say has led to more instability in prices, making trading almost impossible, says BBC Persian's Kasra Naji.There is speculation in Tehran that the widespread demonstrations may have been encouraged by conservative traders affiliated to opponents of President Ahmadinejad, in a push to remove him from power, our correspondent says.ArrestsThe head of Tehran's bazaar unions, Ahmad Karimi-Esfahani, said shopkeepers had not opened their businesses as they were "worried about security" but he expected them to reopen on Thursday.A protest outside the bazaar started with a small group and then grew, he told the Iranian Labour News Agency (Ilna).A senior Iranian police commander confirmed to Ilna that "a limited number of people protested in front of the bazaar," but he said the bazaar was not closed.
First law of Persian statecraft: do NOT piss off the bazaari class.

Edit: video: https://www.youtube.com/watch?feature=player_embedded&v=MDFjyg1KXpw
Is this not what the sanctions are all about? Does anyone expect it to last or expand? Don't see Iran going the way of Libya just yet personally, Khamenei's much brighter than Muammar isn't he? Been wrong before though.
I honestly don't know, and would love to read alib's 2 rials. The best thing for Khamenei right now would be more Israeli sabre-rattling.

The BBC article reports speculation that Khamenei could be behind this- creating a sort of Astroturf protest to dislodge Ahmedinejad, but that's surely too risky a game to be playing in the current Middle East. The protestors were also chanting against Iran's meddling in Syria, apparently (or rather, focus on Syria over the plummeting rial).

See the chart here for how the rial-dollar exchange rate has gone bonkers over the past 70 days: http://www.businessinsider.com/chart-of-iranian-rial-2012-10

1391 might be an interesting year...


Book Reviewer
Interesting highlight in The Times yesterday on the growing ‘rift’ at the top of the Iranian regime. Sorry, Times, so not possible to link it:

Times | Tehran split over billions spent by spy chief to prop up Assad regime

Iran is spending billions of dollars in support of President Assad of Syria, creating a rift at the top of the regime in Tehran as the war remains deadlocked. Failure to decide the Syrian conflict in favour of President Assad, despite huge military and financial support for the regime in Damascus, has caused a split between Ayatollah Ali Khamenei, the Supreme Leader, and Iran’s spymaster,Qassem Suleimani. According to Western intelligence reports, details of which have been passed to the Times and confirmed by other sources, the two men, who have been close for years, are now at loggerheads over the failure to crush the 18-month uprising.

Iran is thought to have spent no more than $10 billion (£6 billion). Defectors from Assad’s forces have told coordinators for the rebel Free Syrian Army in the Gulf that Iran has been paying the salaries of Syrian government troops for months, as well as providing weapons and logistical support. This huge outlay has increased friction in Tehran as the Iranian economy labours under international sanctions imposed by the West to curb Iran’s disputed nuclear programme.

Mr Suleimani, the commander of the Quds Force, a unit of Iran’s Revolutionary Guard, masterminds Iranian strategy with its proxies across the region, including Hezbollah and Hamas. Late last year he assured Ayatollah Khamenei that he could turn the tide in Syria and crush the rebels. Instead, the conflict has become a bloody stalemate, with Iran pumping weapons, troops and cash into Syria to counter support for the rebels from Saudi Arabia, Turkey and Qatar, overseen by the US.

The Syrian regime’s deployment of its air force in recent months has increased the civilian death toll without yielding a breakthrough, while the rebels still lack decisive firepower. With the war at a stalemate, Iran is left paying an ever more costly bill. “Suleimani promised Khamenei that he would turn the situation in Syria around and has failed to deliver,” said one Western defence source.

The Iranian Government knows that this is money it cannot afford to squander with its economy on the brink of collapse. Inflation and unemployment are soaring and there is widespread unhappiness among ordinary Iranians at the regime’s fixation with the war in Syria while sanctions continue to bite. Senior regime figures are also questioning Iranian strategy in Syria, fearful of unrest at home if the conflict drags on and the scale of Iran’s spending becomes public.

Tehran reiterated its support for President Assad at the weekend. Ali Akbar Velayati, Ayatollah Khamenei’s foreign policy adviser, insisted that victory for the Assad regime was “certain” and would represent a victory for Iran. But behind the scenes, Iran is exploring other options, reopening talks with various opposition groups, including the Syrian Muslim Brotherhood, in an effort to retain a stake in the country should the Assad regime be toppled. “They need time to build the necessary alliances to make sure that Iran is not expelled from Syria for ever,” said one defence source in the Gulf. Failure to crush the Syrian uprising puts the first real dent in the reputation of Mr Suleimani. Head of the Quds Force since 2002, he marshalled the Shia insurgency against US-led forces in Iraq, entering Baghdad at will under the noses of the Americans and becoming a darling of the ultra-conservative elite in Tehran. He is so close to Ayatollah Khamenei that he has been touted as a contender for the presidency when Mahmoud Amhadinejad steps down next year, but most observers consider him unlikely to run for office just now. It is doubtful whether he would increase his power by becoming president. With the Syrian conflict unresolved, the wider Middle East in flux and the mounting threat of an Israeli attack on Iran’s nuclear facilities, Ayatollah Khamenei will probably conclude that Mr Suleimani would better serve Tehran in his present role.

Iran’s involvement in Syria has been known for months, but Tehran denied having troops in Damascus until a week ago, when General Mohammad Ali Jafari, the head of the Revolutionary Guard, confirmed that members of the Quds Force were there. Iran’s claim that its involvement is recent is belied by the emergence of a photograph of a headstone in Beheshte Zahra cemetery in Tehran. It bears the name Moharam Tork, 33, the Revolutionary Guard badge, the inscription “Martyred in Damascus” and the date January 19 this year. The photograph was put on Facebook and went viral two weeks ago. The Iranian blog Vahid Online said that Mr Tork was killed in training when a grenade exploded in his hand.

My view? Well, the Soviets were pretty much bankrupted, and destroyed as a functioning entity due to economic pressures - and the same could happen here.
Actually given the regional stirrings of the Arab Spring and the pain inflicted by sanctions what is surprising is there's been so little trouble on the streets of Iran, there's been more in Iraq. All I've noticed is a fall in popular support for their nuke program which once was high even amongst the now faded Green movement. It's an entirely rational desire given the neighborhood but this isn't looking like a people that will eat grass if necessary in order to have a deterrent. It's not Pakistan facing India, the threat from unpredictable Israel or the obviously chastened US is really much lower and the cranky Saudis have yet to go nuclear.

I'm surprised Ahmadinejad is even still clinging to office despite getting flak from the Iranian hard right. You'd have thought that Khamenei would have managed to cut him loose by now. That last speech of his at the UN sounded almost conciliatory, which will have gone down like a lead balloon with the hawks.

Iran has considerable influence but really should not be mistaken for a rich or powerful country. It's a third world state with a creaking military that has some specialism in asymmetric war because it can not afford the symmetric kind. It thinks its Imperial Persia but it's power is mostly soft. It's still fairly parsimonious commitment of the IRGC in Syria must be a strain. Constant Israeli sabre rattling must be a great comfort to the Ayatollahs, Bibi and his red lines. They are really much more at risk under dull vice like containment than having IAF bunker busters cracking open their reactor cores and poisoning an angry population.
Possibly linked- The State subsidises a lot of basics in Iran, so it looks like the economics are coming unravelled at high speed, but the proposed cuts are politically unacceptable.
BBC News - Iran's parliament to reconsider subsidy reform

Iran's parliament has voted to consider suspending plans for further reform of the country's food and fuel subsidies.

The move follows street protests by traders over the steep slide in the value of Iran's currency, the rial, against the US dollar.

Many Iranians blame the problem on President Mahmoud Ahmadinejad's policies, increasing public pressure on him to step down, analysts say.

Iranian officials blame speculators and international sanctions for the crisis.

US officials say the slide reflects the success of US economic sanctions targeted at Iran's controversial nuclear programme.
'Orchestrated campaign'
There was no date given for when parliament would make a decision on whether or not to stop the second phase of subsidy reforms.

The first phase, which was introduced in late 2010, was hailed by President Ahmadinejad at the time as the biggest economic reform in decades, so parliament's vote is being seen as a political blow to the president at a time when he is facing growing public discontent over the rial's slide.

On Wednesday, merchants in Tehran's Grand Bazaar took to the streets. Traders are angry at the lack of direction from the government in the crisis, which they say has led to more instability in prices and made trading almost impossible, analysts say.

Riot police used tear gas to disperse the demonstrators, who had gathered outside the central bank, calling for the governor to stand down, and chanting anti-government slogans.

BBC Persian's Kasra Naji says opponents of the president are coming out against him in what looks like an orchestrated campaign, and members of parliament are also stepping up the pressure.

They have called in the governor of the central bank for questioning. One MP has said Mr Ahmadinejad must not stay in power a day longer.

During Friday prayers, imams throughout Iran spoke as if reading from the same script, saying the president could not blame others for the impotence of his government, and that the people would not be fooled any more, our correspondent says.

Iran's Supreme Leader Ayatollah Ali Khamenei, once a staunch supporter of President Ahmadinejad, has kept quiet so far, our correspondent adds.
On Sober Look Iran on the brink
Iran's internal instability continues to pose significant risks to the region. As discussed earlier (see post), the currency collapse has triggered hyperinflation.
Bloomberg/BW: - The run on the rial has exacerbated inflation that had already been pushed up by the removal of subsidies on energy and food. The official rate rose to 23.5 percent in August. The real rate, which adjusts for the currency depreciation, is three times that, according to Steve Hanke, a professor of applied economics at Johns Hopkins University in Baltimore.

“We’re getting into what is technically hyper-inflation,” with an “implied inflation rate” of about 70 percent a month, Hanke said.​
As a result Iranians with money are trying to preserve their wealth by buying gold. Gold sales to Iran have spiked.
Bloomberg/BW: - Turkish sales of precious metals to Iran jumped to $6.2 billion through July from $21.9 million in the same period last year. Wealthy Iranians in Turkey are collecting gold and exporting it to Iran, the Istanbul-based Zaman newspaper said July 11. Iranians in Dubai and India are also collecting gold and sending it to the central bank, Zaman said, citing a Turkish economy administration official it didn’t name.​
These developments may be a precursor to a sharp increase in social unrest. As the well-off Iranians have the ability to preserve their wealth (at least in part), the gap between the rich and the poor widens. In the late 70s similar conditions (including high inflation and gold buying by the wealthy) preceded militant anti-Shah demonstrations and ultimately the 1979 Islamic revolution.

Once again, the mass media doesn't seem to be focused on these developments - in part due to lack of understanding of history. One doesn't need to focus on the history of Iran to appreciate how dangerous the situation has become. Currency debasement and inflation were responsible for hostilities through the ages. Here are a couple of well known examples (h/t Josh):

1. In ancient Rome the dilution of the currency (reducing the silver content of the coins) led to widespread anti-Christian (and other types of) violence in the early 300s AD.

[TABLE="class: tr-caption-container, align: center"]
[TD="class: tr-caption"]Source: SocGen (click to enlarge)[/TD]

2. A hyperinflationary environment in Britan in the late 1500s to mid 1600s sparked increasing incidence of witch trials. Note that in the chart below "1" on the left-hand axis stands for 100%
[TABLE="class: tr-caption-container, align: center"]
[TD="class: tr-caption"]Source: SocGen (click to enlarge)[/TD]

Whether it was Christians in the Roman era or women in the middle ages, someone was blamed and terrorized in times of collapsing currencies and hyperinflation. This pattern repeated itself numerous times throughout history. 1000% inflation (in the summer of 1917) ignited the Russian revolution and the hyperinflation in Germany after WW-I had well known disastrous consequences.

Iran is no exception. In the 70s the Shah and his regime was to blame. The only question now is who will be the target of people's rage and desperation this time.
It's the governments response to hyperinflation that's crucial, what did for Weimar was a panicked attempt to return to the gold standard while other ditched it that finally destroyed the state's legitimacy and led to the rise of the Nazis. Still at back of the Arab Spring was the simple economics of a high grain price, people who can see hunger coming sometimes get brave.
On Sober Look Iran on the brink
It's the governments response to hyperinflation that's crucial, what did for Weimar was a panicked attempt to return to the gold standard while other ditched it that finally destroyed the state's legitimacy and led to the rise of the Nazis. Still at back of the Arab Spring was the simple economics of a high grain price, people who can see hunger coming sometimes get brave.
A slightly different perspective from Raymond Barret for Haaretz:



Kit Reviewer
What broke the Soviet Union was not purely the Arms race, but the Arms race combined with a sluggish economy and the fact that the Soviets were subsidising their friends. The Iranians are doing all three as well. The question is whether they will be****ed before or after they get their Nukes.
What broke the Soviet Union was not purely the Arms race, but the Arms race combined with a sluggish economy and the fact that the Soviets were subsidising their friends. The Iranians are doing all three as well. The question is whether they will be****ed before or after they get their Nukes.
If there's one cause of the fall of the USSR it's overreach backed by high oil prices and the an oil price collapse.

I'd be very careful about what we wish for with Iran, we may not like it but the Ayatollah's state has been a rational calculator. The other power center in the country is the IRGC. People could not imagine much worse than the awful Kaiser Wilhelm got a rather nasty surprise a short decade after the Nazis came to power.
Iran needs to stop acting like the bigger Muslim and start screwing some Arabs up...Its time the Persians take revenge on the Arabs.............Plus Assad is a great man...you won't find a better person to send the Jihadis to their 72 houris.

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