A wave of protests is spreading across Iran as the country grapples with a major economic crisis, made worse by a historic collapse of the rial and soaring inflation. The speed with which demonstrations have escalated into open calls for regime change shows that most Iranians are convinced that the country’s leadership is both incompetent and illegitimate.
The current unrest began a few weeks ago after the rial plunged to a record low of around 1.42 million to the US dollar. The collapse triggered strikes by shopkeepers in Tehran’s Grand Bazaar and mobile phone markets, where traders shut their businesses in protest against spiralling food prices and the growing impossibility of conducting trade. Unlike earlier episodes of narrowly focused economic dissent, however, these protests spread rapidly and took on a far broader political character almost from the outset.
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The protests soon spread from the capital to cities across the country, such as Isfahan, Shiraz, Yazd and Kermanshah. The nature and composition of the protests changed soon as university students joined the shopkeepers, clearly shifting the tone of the protests from economic concerns to political rebellion. The slogans reported are telling: protesters are chanting "Death to the dictator" and explicitly rejecting the regime's regional strategy with cries of "No to Gaza, no to Lebanon, I'll sacrifice my life for Iran". This indicates that the Iranian public no longer separates their economic destitution from the state’s ideological foreign policy.
The present crisis is not just the result of economic mismanagement. Another major reason is the "12-day war" with Israel and the United States last June, which led to more than 1,000 casualties and the partial destruction of the country’s nuclear facilities and regular infrastructure.
Following this conflict, the United Nations reinstated international sanctions previously lifted a decade ago, compounding the economic stranglehold on the nation. The defeat and the threat of further attacks and economic sanctions have led to a climate of fear and hopelessness. Analysts note that the economic ruin is now inextricably linked in the public mind to the regime’s nuclear and missile policies, which have invited these devastating sanctions and military strikes.
The regime’s response to the economic crisis has confounded most Iranians. On one hand, President Masoud Pezeshkian has attempted a conciliatory approach, acknowledging "legitimate demands" and holding dialogues with unions. He has publicly admitted the difficulty of the situation, asking lawmakers where he is supposed to find funds when faced with a budget requiring a 62 per cent tax hike while inflation runs at 50 per cent.
However, this "soft" approach is contradicted by the security apparatus. The prosecutor general has threatened a "decisive response" to any insecurity. Riot police have already deployed tear gas and used violence against demonstrators. In a move interpreted by analysts as an attempt to stifle assembly, the government ordered the closure of offices and universities in 18 provinces, ostensibly for energy conservation.
Experts argue that the president’s attempts at dialogue are likely "too little, too late". The public lacks faith in the government's ability to fix these problems, largely because the president himself has admitted he is powerless to solve them. The protesters also seem to search for a sense of nostalgia and longing for the past, evident from how they raised slogans supporting the exiled son of the last Shah, Reza Pahlavi. Videos of protesters physically defying police—described by some observers as "Tiananmen moments"—suggest that the barrier of fear has eroded significantly, despite the brutal crackdown on the 2022 protests that killed hundreds.
The government is unable to fix the economy without lifting sanctions, which requires foreign policy changes it is unwilling to make. Meanwhile, it cannot address domestic anger without fixing the economy. The three root causes—sanctions, corruption and bad policy—remain unaddressed.
