Iranís currency virtually collapsed the week before last, and the public protests that followed in Tehran stirred memories of the massive anti-regime protests of 2009. This has caused excited speculation in the United States of America and its allies about the imminent fall of President Mahmoud Ahmadinejad, the abandonment of Iranís uranium enrichment programme, or even the end of the whole Islamic regime. Donít hold your breath.
Ahmadinejad blamed the currency crisis on the foreign sanctions that are crippling Iranís trade, of course. His critics at home just blamed him: ďThe smaller part of the problem relates to sanctions while 80 per cent of the problem is rooted in the governmentís mistaken policies,Ē said Ali Larijani, the speaker of the Iranian parliament. But he would say that, wouldnít he?
Itís true that Ahmadinejad has used the countryís large oil revenues to paper over some serious mistakes in running Iranís economy, but the current crisis was caused by a steep fall in those revenues ówhich is directly due to the sanctions.
Four rounds of United Nations-backed trade sanctions, ostensibly meant to stop Iran from developing nuclear weapons, had already cut the countryís oil exports from 2.5 million barrels a day to 1.5 million b/d by early this year. In July came new European Union sanctions banning oil imports from Iran entirely. Since Europe was taking one-fifth of Iranís remaining oil exports, that blow was enough to send the Iranian rial into free-fall. Until 2009, the rate of exchange was fairly stable at about 10,000 rials to the dollar. Then it started to fall slowly, and then faster ó and in a hectic few days in the week before last, it tumbled a further 40 per cent to a low of 35,000 rials to the dollar. That was when the protests began in Tehranís Grand Bazaar, whose merchants were amongst the strongest supporters of the revolution in 1979.
The protests were contained without any death, and the shops in the bazaar are now open again. The rial has recovered slightly. But the effects are being felt in almost every household in the country. Formerly comfortable middle-class families are scrambling to put food on the table, and the poor are really suffering.
So the sanctions are working, in the sense that they are hurting people. But what are they accomplishing in terms of their stated purpose of forcing Iran to abandon its nuclear weapons programme? More importantly, perhaps, what are they achieving in terms of their unstated purpose: triggering an uprising that overthrows the whole Islamic regime?
First of all, Iran doesnít have a nuclear weapons programme. The International Atomic Energy Agency and the US and Israeli intelligence services are all agreed on that, although the public debate on the issue generally assumes the contrary. Iran says it is developing its ability to enrich uranium fuel for use in reactors, which is perfectly legal under the Nuclear Non-Proliferation Treaty. So what are these sanctions really about?
Overthrowing the Iranian regime, of course. American sanctions against Iran long predate any concerns about Iranian nuclear weapons, and would not be ended even if Iran stopped all work on uranium enrichment tomorrow. The US legislation that imposes the sanctions makes that very clear. Since stopping the enrichment programme would not end the sanctions, why would the Iranian government even consider doing so? And will the Iranian people rise up and overthrow the regime because sanctions are making their daily lives difficult? Even anti-regime Iranians are proud and patriotic people, and the likelihood that they will yield to foreign pressures in that way is approximately zero.