Time for an Iranian Spring?

The sharp depreciation of the rial in the early days of October, the closing of Tehran’s Grand Bazaar and the protest that followed gave some observers a glimmer of hope for the possible birth of an Iranian Spring.

While it may be too early to tell if that is indeed the case, the actions were definite signs of a growing power struggle within the Iranian regime. The currency crisis has provided new ammunition to the conservative power bloc around Supreme Leader Ayatollah Khamenei against President Mahmoud Ahmadinejad and his government.

The conflict between the two groups has been steadily growing since the 2009 presidential election. We are now witnessing signs of a slow-motion coup d’état against Ahmadinejad.

Many observers viewed the closing of the bazaar, just two days after the rial nosedived, as a spontaneous protest against Ahmadinejad’s mismanagement of the foreign exchange crisis.

Images of long rows of shuttered shops brought back powerful memories of the 1979 revolution, when the bazaar and the traditional merchant class played an important role in the overthrow of the shah and the establishment of the Islamic Republic.

Three decades later, the bazaar is intricately connected to the allies of Ayatollah Khamenei, the influential Motalefeh Party (the Islamic Coalition Party), and its affiliate, the Society of Islamic Guild and Bazaar Associations. A spontaneous protest, not to mention a complete shutdown of the bazaar, is highly unlikely without these groups’ endorsement.

The bazaar reopened three days later under the supervision of the security forces. On the same day, the lower house of Iran’s Parliament, the Majlis, passed a single-emergency bill to suspend the implementation of the second phase of the subsidy reform bill.

Initially enacted in October 2010, this was a long-awaited policy aimed at removing all food and energy subsidies in five years in exchange for targeted social assistance to affected parts of the population. The IMF praised the plan and its execution.

The bill to suspend the subsidy reform now awaits final approval by the Guardian Council. Nevertheless, the passing of the measure is an important victory for Ahmadinejad’s opponents.

Two days later, in violation of Iran’s press law, Fars News released a copy of a secret memo by Ahmadinejad to his cabinet and high-ranking city and provincial executive managers vowing to resist intervention by the Parliament in government hiring and firings. A week earlier, Ahmadinejad had accused Fars News of being controlled by the military and security apparatus.

Meanwhile, more than 100 members of Parliament signed a petition demanding Ahmadinejad to appear before Parliament and answer questions about his handling of the currency crisis.

Some members of the Parliament have asked for the creation of an independent economic council to take over the management of the economy from the government. Others have called for Ahmadinejad’s impeachment for his failure to manage the economy.

These and other political maneuvers that followed the rial’s sharp depreciation are the continuation of the power struggle to influence the outcome of the next presidential election, in June 2013.

The last election, in 2009, was a battle between the conservatives and the reformists of the Iranian regime. The next election will be a fight within the conservative bloc, a fierce competition for control of the economy between Ahmadinejad and his supporters on one hand, and Khamenei and the top leadership of Iran’s Revolutionary Guards Corp (IRGC) on the other.

The 2009 election resulted in the removal of the remnants of Iran’s reformists from positions of power.

Economically, the election led to the triumph of the IRGC in the battle against former President Hashemi Rafsanjani and his family’s hold on some of the main arteries of the Iranian economy. The IRGC emerged as a formidable economic and military apparatus with an unchallenged hold on the most important sectors of the economy.

Ahmadinejad enjoyed full support of Ayatollah Khamenei, the IRGC, and the conservative bloc in 2009. Differences emerged soon after, pitting Khamenei and the top IRGC leadership against the president.

Ahmadinejad proved to be more ambitious and independent than his backers had expected him to be. Once used by the IRGC to oust Rafsanjani and the reformist bloc, Ahmadinejad sought to strengthen his own position and remain a powerful force through the election of one of his allies to the presidency in 2013.

But the currency crisis has provided new ammunition to the IIRGC and the conservative bloc to scapegoat Ahmadinejad for the country’s growing isolation and the crippling economic effects of Western sanctions.

Silent bystanders

The sanctions have not stopped or slowed Iran’s nuclear program. They have, however, caused enormous economic pain for Iranians of all walks of life. The recent depreciation of the rial only aggravates a crisis that had been developing for many months.

More than 70% of Iran’s imports are semi-finished goods, machinery, tools and equipment and raw materials. A growing number of factories are facing shortages of materials and parts, the owner of a toy workshop with 60 employees told me, lamenting the nearly six-fold increase in the price of plastic in recent weeks.

With almost three months worth of supplies on hand, he is still able to operate. Others are not so lucky. Unable to import motors, a small factory in a suburb of Tehran that assembles refrigerators for restaurants will shut down next week, laying off all of its workers, its owner said. Similar closures are expected across the country.

Seventy-four million Iranians face daily increases in prices and rising joblessness as a result of the West’s sanctions. A sense of social fatigue lingers among many residents.

“Something should happen. It doesn’t matter what, a coup, anything. Something should change the situation we are in now,” a twenty-two year old told me from Tehran the day of street clashes with the security forces.

Although some participated in the recent protests, Iran’s middle class — including those who took to the streets during the Green Movement in 2009 — are largely keeping their distance from this conflict.

Embattled by the crippling effects of sanctions and the precipitant decline in the value of the rial, they are silent bystanders, warily watching the developments from the outside. This is not their fight.

Even though a coup against Ahmadinejad might promise an end of sanctions and a return to economic stability, they will likely remain on the sidelines. If that remains to be the case, an Iranian Spring — with a prospect for real democracy — is still a long way off.