The teargas that wafted over parts of Tehran on Wednesday might have been taken as the smell of victory for gung-ho advocates of the U.S. sanctions strategy against Iran — had any been there to catch a whiff. The gas was fired by riot police to disperse crowds gathered for a rare demonstration against the regime, driven to act by the precipitous collapse in the value of their currency, the rial, and against the authorities’ efforts to prevent them from converting savings into foreign currencies in order to preserve their value. The rial has fallen 40% against the dollar in the past week alone, after three years of steady decline, accelerated by the rush to convert savings. For many in the West, the turmoil was interpreted as a sign that sanctions are having their desired effect. “From our perspective, this speaks to the unrelenting and increasingly successful international pressure that we are all bringing to bear on the Iranian economy,” State Department spokesperson Victoria Nuland said on Monday, referring to the chaos in Iran’s currency markets. Sanctions, she said, are “cutting deeper and deeper into the Iranian economy and this is an important factor in trying to change the [nuclear] calculus of the Iranian leadership.”
For Iran’s citizens, who have seen the prices of many basic foodstuffs more than double since last year, and who are struggling to access even life-saving medicines, the effect of the sanctions is more than mere “collateral damage.” The sanctions are, as U.S. officials like to point out, designed to put Iran’s economy in a “chokehold”, in the hope that one of the effects will be that the resultant economic pain rouses them to defy and challenge the regime, forcing it to rethink its nuclear program in order to win Iran’s release from the stranglehold of sanctions that are fomenting rebellion. While official statements might insist that innocent Iranians are not the target of that “chokehold,” an unnamed senior U.S. intelligence officer showed no such squeamishness when explaining the sanctions strategy to the Washington Post earlier this year. “In addition to the direct pressure sanctions exert on the regime’s ability to finance its priorities,” the official said, “another option here is that they will create hate and discontent at the street level so that the Iranian leaders realize that they need to change their ways.”
Advocates of that line of thinking may have seen Wednesday’s protests as vindication — but it may not be that simple. While President Mahmoud Ahmadinejad eagerly concurs that it is Western sanctions that are behind the economic chaos in Iran, his political opponents — loyalists of Iran’s Supreme Leader, Ayatullah Ali Khamenei — actually blame Ahmadinejad’s mismanagement of the economy for the precipitous currency collapse. That sentiment appears to have been shared by many on the streets in the series of small demonstrations around Tehran on Wednesday: Most of the protesters’ rage appears to have been directed at Ahmadinejad, who was accused of failing to take measures necessary to protect Iranian living standards. After all, the Iranian economy isn’t exactly on the verge of collapse, and the regime is believed to have a foreign currency reserve of some $100 billion. Indeed, the fact that it is still sending billions in aid to prop up the Syrian regime of President Bashar al-Assad — another sore point with protesters on Wednesday — underscores the fact that is not exactly bankrupt, yet.
So, even if sanctions are fueling the economic pain that is prompting Iranians to return to streets in protest, the expectation that such demonstrations will prompt Iran’s leaders to surrender a nuclear program that has been among their long-term priorities requires a considerable leap of faith. “It would be optimistic at best to hope that the deteriorating economic circumstances will spur Iran’s leaders to shift their nuclear stance,” said Patrick Clawson of the Washington Institute for Near East Policy last month. “They do not seem to know or care much about the country’s economic situation — their own income has been hurt only a little, if at all, and they appear unconcerned about the prospect of popular unrest given their past success at repressing opposition. For now, they are likely to stay the course on both domestic economic policy and the nuclear issue.”
Indeed, backing down is barely an option, says University of Hawaii Iran specialist and National Iranian American Council board member Dr. Farideh Farhi. “It’s politically impossible for the leadership in Tehran to back down from their insistence that Iran can’t accept being treated differently from any other country on the nuclear issue.” (That’s a reference to Iran’s insistence that the Non-Proliferation Treaty gives it the right to enrich uranium for peaceful purposes.) More flexibility in Western offers, if it was forthcoming, could create space for Iran’s leadership to make compromise in order to win sanctions relief, says Farhi. “But those thinking that today’s demonstrations are the start of a wave of protest that would change Tehran’s nuclear position have forgotten that Iran’s leadership has repeatedly shown a willingness to unleash repression to prevent such a scenario.”
The fact that the protesters are targeting Ahmadinejad may actually suit the regime in Tehran, which is effectively headed by Ayatullah Ali Khamenei. Ahmadinejad is reviled by the conservative clerical establishment, and has repeatedly had his wings clipped by the executive branch. The president, moreover, is a lame duck, with his second and final term of office due to end next summer. Ahmadinejad, whose faction was trounced in recent parliamentary elections by supporters of Khamenei, will in his twilight months in office make the perfect whipping boy for a regime facing popular protest as a result of economic pain. After all, it’s widely believed in Iran that economic mismanagement by Ahmadinejad’s government has actually significantly exacerbated the impact of sanctions.
Khamenei believes the goal the U.S. and its allies is regime change, not nuclear deterrence. Sanctions that threaten the living standard of ordinary people in many way play into a regime-backed narrative of Iran being under economic attack by hostile foreign forces. Does this make it more or less likely to heed Western demands? The history of sanction suggests that regimes very rarely buckle under external economic pressure, even as their citizens pay a terrible price.
In Western capitals, sanctions have been sold as the only alternative to the war Israel has been threatening to start. But, warns, Farhi, “if the Iranians don’t give in — and they’ve put themselves in a position where they can’t give in — sanctions in fact become a pathway to war.” U.S. intelligence has long maintained that Iran is not currently building a nuclear weapon, although it is accumulating the means to do so. If Tehran concludes that the impact of sanctions threatens the regime’s survival, that could just as easily make the case for nuclear retreat as it could burnish the appeal of a nuclear deterrent.