Iran faces economic collapse, rising protests, military setbacks, and potential regime change amid leadership uncertainty.
LONDON: “The country is like a powder keg, and further economic strain could be the spark that sets it off”, said an official, close to Iran’s government last week. In January alone, Iran’s Statistical Centre disclosed that a third of essential commodities increased in price by more than 40 percent, to leave them more than double that of the previous year. At the same time, state media reported that the price of rice had soared 200 percent over the past year, while housing and utility costs had sparked sharply, climbing more than 60 percent in some Teheran districts in recent months, due largely to soaring material costs and a steep fall in the value of Iran’s currency. Since the re-imposition of sanctions in 2018, the rial has shed more than 90 percent of its value against the US dollar. With inflation officially at 40 percent, although many believe it to be much higher, it’s not surprising that the poverty rate in the country is hovering around 50 percent, so said Iran’s Jomhuri-ye Esiami newspaper last week. “The situation worsens daily. I can’t afford my rent, pay my bills or buy clothes for my children,” said 42-year-old Alireza Yousefi, a teacher from Isfahan, last week.
It’s not only the economy which is causing deep concern among Iran’s population. More than two years after the “Women, Life, Freedom” movement the persecution of Iran’s female population continues. In January, the Iran Human Rights NGO published a report which shed some light on the realities of women’s executions in the country. According to the report, 2024 marked a grim milestone. Last year the Islamic Republic recorded its highest annual number of women executed in 17 years, with 31 women hanged in Iranian prisons. “The execution of women in Iran not only reveals the brutal and inhumane nature of the death penalty but also exposes the deep-rooted gender discrimination and inequality within the judicial system,” wrote Mahmood Amiry Moghaddam, Director of Iran Human Rights. Nine of the women identified were child-brides, three of whom were also child offenders, meaning they were under 18 at the time of their alleged offence. International law prohibits the use of capital punishment in all cases in which the accused is under 18 at the time of their alleged offence. Seventy percent of women executed for murder were accused of killing their husbands or partners, often the result of domestic violence in abusive marriages. Iran’s judicial system, however, rarely considers these circumstances as mitigating factors in sentencing. One woman executed last year was Leila Ghaemi, whom the report said had been found guilty of strangling her husband in anger after she came home one day to find him and his friends raping her young daughter.
Women continue to be persecuted in Iran for not wearing the hijab correctly. It’s now more than two years since the death in custody of Mahsa Amini. Witnesses said the 22-year-old Kurd was badly beaten by the morality police during her arrest for allegedly not having her hijab correctly positioned over her head. An independent enquiry determined that Iran’s theocracy was responsible for the “physical violence” that led to her death, a charge disputed by the authorities who denied that Mahsa was mistreated and absurdly blamed “sudden heart failure” for her death. Mahasa’s killing sparked a massive wave of protests that continues to this day, despite threats of violent arrest and imprisonment. Last week the BBC reported that Iranian security officials have now adopted a strategy of “state-sponsored vigilantism” to encourage people to use specialist phone apps to report women for alleged dress code violations in private vehicles such as taxis and ambulances. There is also an increasing use of drones and security cameras with facial recognition software to monitor hijab compliance around the country.
As well as experiencing intense economic pressure at home, the Islamic Republic of Iran has recently suffered two dramatic military setbacks: Israel’s defeat of Iran’s proxy in Lebanon, Hezbollah, the largest non-state army on Earth; and the fall of Bashar al-Assad in Syria. Following Israel’s demolition of Hassan Nasrallah’s Hezbollah in a series of punishing attacks last September, Iran responded with the launch of ballistic missiles, which Israel’s Arrow missiles easily intercepted. But when Israel’s air force counter-attacked on 26 October, destroying targets in more than 20 locations across Iran, not one of its aircraft was even challenged, illustrating that the regime is weaker than ever. Opponents sense an opportunity, asking if the revolutionary wind that engulfed the Assad dictatorship could blow all the way to Teheran.
Iran’s massive build-up over the decades of its Revolutionary Guards and their militias, with their elaborate bases and showy headquarters, have kept the ordinary citizen in poverty over the years. With their lives blighted by soaring inflation, high unemployment and failing public services, the people of Iran have also watched billions being squandered on the likes of Hezbollah, Hamas in Gaza and Houthis in Yemen. Following Israel’s blistering military activity, Teheran’s foreign policy is now in tatters, its reputation is in the mud and its option limited. With the collapse of its allies and the formidable alliance of America, Israel and the Sunni Arab Gulf States arraigned against it, a sensible Ayatollah regime would eschew its sabre rattling and move in the direction of accommodation. Especially as the people of Iran have never shared the regime’s obsession with Israel, its imperialist expansion or its mediaeval theocracy. The hardliners, however, who still have the ear of Khamenei, will almost certainly wish to restore their pride and up the pace of Iran’s nuclear programme.
It was Iran’s weak economy that pushed Khamenei to give tentative backing to the nuclear agreement struck with major powers back in 2015, leading to the lifting of Western sanctions and an improvement in economic conditions. But then-President Trump’s renewed onslaught against Iran after he pulled out of the nuclear pact in 2018 squeezed living standards once more, leading to the current economic difficulties. Now in his second term Trump is again upping the pressure on Iran with new sanctions and the threat of military action, at the same time opening the door to negotiations by sending a letter last week to Khamenei proposing nuclear talks? Khamenei spurned the offer saying repeatedly that Washington was imposing excessive demands and that Teheran would not be bullied into negotiations.
Although Iran staved off economic collapse in 2018 largely thanks to China, the main buyer of its oil and one of the few nations still trading with Teheran despite sanctions, uncertainty looms over the sustainability of sales. Trump’s maximum pressure policy aims to throttle Iran’s crude sales with multiple rounds of sanctions on tankers and entities involved with the trade. If this succeeds, public anger could boil over. Last month Iranian state media reported that there were at least 216 demonstrations across the country, involving retirees, workers, healthcare professionals, students and merchants, largely focussed on economic hardships, including low wages and months of unpaid salaries. The regime’s ongoing attempts to impose draconian social rules and censorship laws have re-energised the demonstrators, and dissatisfaction is now percolating even among the regime’s hardliner supporters, frustrated that after spending billions in recent years to support him, Iran did so little to save Syria’s Assad from a humiliating flight to Moscow. That investment is now burned.
In the background looms an increasingly large question – who will take power when Khamenei, now 85 and in poor health, dies? This will be the first transfer of “supreme power” in Iran since 1989 and only the second since the Islamic Republic was formed 45-years ago. Some in the US administration argue that Teheran is close enough to the brink that a well-timed push, say by Israel, might drive it into the abyss, resulting in regime change. Others are more cautious, fearing that an embattled leadership with a massive missile and drone arsenal could plunge the region into a major war. But with Khamenei’s prognosis a matter of months, his regime has never been more vulnerable. As the distinguished journalist Andrew Neil wrote in The Mail last week: “The smell of regime change is in the Teheran air”.
*John Dobson is a former British diplomat, who also worked in UK Prime Minister John Major’s office between 1995 and 1998. He is currently a visiting fellow at the University of Plymouth.