By Selim Celal
- The Turkey-based writer is an expert on Iran's foreign policy and domestic politics.
Seven months after the widest protest in the history of the Islamic Republic (December 2017), the Iranians are once again on the streets. They are protesting against the bad performance of the economy in general and the devaluation of the national currency (rial) in particular. Over the last couple of months, the rial has lost more than 50 percent of its value. It has become one the most hyperinflated currencies in the world. A few weeks ago, the Iranian central bank pegged the rial to the dollar, but in the black market the dollar and other top currencies are still being exchanged two times higher than the official rate.
The current wave of protests can be considered as part of the overall anger against the mismanagement of the country; yet, it is significant in many ways. Although limited in terms of its scope, it is quite challenging for the establishment in terms of weight. This time the driving force behind it is the market or what is popularly known as ‘bazaar'.
The bazaar has been a crucial player in the history of modern Iran. During the 1979 revolution, it was the bazaar which went on strike and brought the Pahlavi regime to its knees. Traditionally, the bazaar has been the powerhouse of the Iranian clergy. Unlike in the Sunni tradition, there has always been a strong connection between the clergy and the wealthy class in Shi’ism.
Generally, all Muslims are required to give at least 2.5 percent of their annual income and the value of their properties as zakat (poor-due; literally; “that which purifies”) for the good service of the Muslim society (if the income and properties have gone above a minimum amount known as nisab and if they have been continuously owned over one lunar year). However, in addition to zakat, the followers of the Shia belief system must pay 20 percent of their annual income and/or the value of their properties to their ‘source of emulation' (maja-e taqlīd). It is a necessity to pay the amount to him, and the follower is not allowed to distribute it directly among the poor or spend it on any other purpose. This amount is called khums, literarily ‘one-fifth'. It means that the Shia clergy class in Iran, by religious sanctions, is in control of the 20 percent of the overall Iranian market income.
In the past, the bazaar was controlled by a few families. These families entered into politics after the 1979 revolution, obtained a lot of prerogatives and became even wealthier. They have also been connected with different Ayatollahs, to whom they pay their khums. In return, the Ayatollahs in question have been functioning as protectors for them.
As the Iranian economy grew, a new liberal market force consisting of medium enterprises and entrepreneurs also emerged. Yet, the new liberal market force and the traditional bazaar would coexist, and favored stability. In the meantime, a third business force started emerging in the Iranian economic horizon, which was the Guardian of the Islamic Revolution (GIR). Holding petrodollars in one hand and the gun in the other, it gradually emerged as a business monster. The overall situation coincided with the toughest international sanctions on Iran.
During former President Ahmadinejad's tenure, the country's wealth started diminishing due to international sanctions, while its expenditures grew due to its international adventurism. It led to further encroachment by the GIR into the Iranian market. As a result, the Iranian market was suffocated by the GIR, and the Iranian economy was suffocated by international economic sanctions.
In 2013, Hassan Rouhani won the presidential elections. His economic plan was based on two pillars. First, to secure a breathing channel for the market through balancing the role of the GIR in the economy. Second, to secure a breathing channel for the Iranian economy through concluding a deal with the international community over the country’s nuclear issue.
Despite initial success, both pillars of President Rouhani's economic plan ultimately collapsed: with the arrest of his brother in July 2017, he was forced to come to terms with the GIR; and with the U.S. withdrawal from the nuclear deal in May 2018, economic sanctions were re-imposed on the Islamic Republic.
Therefore, Rouhani had no preparations for the situation he is facing now. That is why there is a growing pressure on him, making some analysts predict that he may not finish his term. Going along with this thesis, one would need to examine four scenarios for President Rouhani: the first was resignation, but he already made it clear on June 27 that he was not ready for that. Besides, in the Iranian political culture, there is no such tradition. After all, resignation is an implicit way of accepting responsibility. In the case of Iran, the U.S. and Israel have long been the declared culprits for any problem in the country. Second, removal by the Supreme Leader: It is legally possible, but Khamenei just cannot take such a risky decision. Third, removal through a traditional coup by the GIR. That brings forth the issue of legitimacy, and the world public opinion is not ready for it all. The Islamic Republic is already suffering from a lack of legitimacy, and a coup by a notorious military force, which is already viewed by many as a terrorist organization, would further complicate everything. Fourth, impeachment by the parliament. It requires the support of the two-thirds of the parliamentarians, and at the moment it is not easy to mobilize such a number.
While any of the above scenarios may become a reality, it would, sadly, not solve the economic problems of the country. President Rouhani is neither the sole cause of the current economic crisis nor a barrier in the way of its solution. The main barrier is the general and deliberate ignorance among the Iranian ruling elites. They are used to blaming unknown brokers for any economic crisis, giving the impression that the country is run not by the government but a bunch of brokers. Worse than this, they do not want to understand that the economy cannot be fixed by force. That is why, instead of addressing the grievances of the market, they are threatening it. For instance, soon after the start of the current riot, President Rouhani publicly requested the judiciary to crush the protestors, and a few hours later the chief of the Iranian judiciary also threatened the strikers with execution and long prison terms.
As a matter of fact, there is only one solution to the Iranian economic crisis: re-entering into a direct negotiation with the U.S. Contrary to the common perception, President Trump is more open to negotiation than any former U.S. president ever was. But his style is completely different. His style is more similar to that of General MacArthur, who summoned Japanese Emperor Hirohito (who was considered to be God by the Japanese) to the U.S. Embassy in Tokyo on Sept. 27, 1945, took him to an empty room only with a translator, and made a deal with him in less than one hour. As a businessman, to President Trump time is precious, thus should not be wasted. He can only negotiate with the real wielder of power (the Supreme Leader in this case), the way he made, for instance, Kim Jong-un (who is considered as a semi-God in North Korea) come to Singapore and sit with him face to face. President Trump does not care about the religious status of Khamenei. To him, Khamenei is simply the leader of Iran. Therefore, for any deal, he wants to have a direct, face-to-face talk with Khamenei.
At the moment, Khamenei does not seem ready for such an option. Consequently, the most likely scenario for the Islamic Republic is to turn into the Venezuela of the Middle East. So far, the regime's strategy has been to frighten Iranians about the Syrianization of the country; but, the situation of Venezuela is not less frightening for Iranians, given their luxurious lifestyle. In such a situation, the unrest will continue. Even if the regime succeeds in quelling it, it will reemerge more powerfully, and sooner or later it will spiral out of control.
The overall situation of Iran is also alarming for Turkey. In the case of any serious instability in Iran, that would most likely have direct impacts on Turkey. Obviously, anyone running from Iran would not take refuge in Iraq, Afghanistan, or Pakistan. One should also keep in mind that Iran is not Syria; it has a population as large as that of Turkey. With over three million Syrian refugees already settled in Turkey, this country cannot afford a human wave from Iran. In the case of Syrian refugees, the Turkish government and society have both responded positively. In this regard, there is a common past and religious affinity between Syria and Turkey, which has contributed a lot to the overall situation. But as far as Iran is concerned, there is a conflictual past with a sectarian difference. Therefore, it would be a real security challenge for Turkey.
Apparently, it is not in the interest of Turkey to favor instability in Iran. But, as it has been observed in the case of Iraq, Syria, and Bosnia, Turkish values do not allow this country to side with repressive regimes. It will pose a particularly big challenge if the Iranian regime continues cracking down on its own people. Therefore, Turkey will, sooner or later, be caught in a real dilemma in which it will have to choose between stability and principles.
The safest alternative for Turkey is to go preemptively for a third choice, which is to play a positive, mediatory role between the international community and Iran. The U.S. withdrawal from the nuclear deal took place at a threshold of Turkish presidential and parliamentary elections. Therefore, Turkey's positioning was not visible contrary to expectations. Now that the elections are over, Turkey should resume playing its due role. One of the most influential countries in the region with huge soft power in the Muslim world, and also as a member of the NATO, Turkey can emerge as the architect of a new deal between the U.S. and Iran. At the core of this diplomatic effort should be a direct negotiation between the Supreme Leader and President Trump.
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