Iran economic protests enter second day amid rial’s collapse

Rouhani dismisses protests as foreign propaganda as demonstrations show growing anger at regime’s support for regional terror groups at expense of country’s troubled economy

Iranian protesters in central Tehran on June 25, 2018. (AFP Photo/Atta Kenare)
Iranian protesters in central Tehran on June 25, 2018. (AFP Photo/Atta Kenare)

Protests continued in Iran for a second day Tuesday amid an economic crisis that many Iranians are blaming on their government’s foreign policies, even as Tehran dismissed the protests as “foreign media propaganda.”

At Tehran’s Grand Bazaar, protesters, including many local shopkeepers, urged owners to close their shops in an expanding strike following the collapse of the country’s currency amid the renewal of US sanctions over the regime’s nuclear program.

Videos posted on social media showed hundreds of people taking part at the bazaar on Tuesday and hundreds more marching down streets of Tehran.

Iranian President Hassan Rouhani on Tuesday sought to calm growing discontent at the tanking economy, assuring the public the country would be able to withstand the new sanctions imposed by US President Donald Trump in the wake of the American exit from the Iran nuclear deal earlier this year.

In speech broadcast live on state TV, Rouhani blamed the spontaneous demonstrations that erupted across the country a day earlier on “foreign media propaganda,” and accused the US of waging “an economic war” against Tehran.

“Even in the worst case, I promise that the basic needs of Iranians will be provided. We have enough sugar, wheat, and cooking oil. We have enough foreign currency to inject into the market,” Rouhani said according to the Reuters news agency.

The president accused Washington of waging a “psychological, economic and political war” on Iran, and warned it would pay a high price for exiting the 2015 accord that lifted international sanctions in exchange for a scaling back of Tehran’s atomic program.

“Withdrawal was the worst decision he [Trump] could make. It was appalling. It hurt America’s global reputation,” he added. “The US cannot defeat our nation, our enemies are not able to get us to their knees.”

The protests  have seen unusual scenes of demonstrators chanting against continued Iranian spending of billions of dollars on regional proxy wars and support for terrorist groups, which many say has meant less investment in the struggling economy at home.

In recent years, Iran has provided financial aid to Palestinian terror groups Hamas and Islamic Jihad, Lebanon’s Hezbollah, Yemen’s Houthi rebels and Shiite militias in Iraq. Since the start of the Syrian civil war in 2011, Tehran has poured a reported $6 billion into propping up president Bashar Assad’s government.

Iranian shops closed at the ancient Grand Bazaar in Tehran on June 25, 2018. (AFP Photo/Atta Kenare)

Monday’s protests in Tehran and around the country — including economically hard-hit cities like Kermanshah in western Iran — included shouts of “Death to Palestine,” “No to Gaza, no to Lebanon” and “Leave Syria and think of us.” Chants of “We don’t want the ayatollahs” and “Death to the dictator” were also heard at some rallies.

Police attempted to suppress the Monday protests in Tehran with tear gas, but early reports from Iran on Tuesday seem to indicate the demonstrations are only expanding.

Monday’s protests in Tehran began at the capital’s sprawling Grand Bazaar, which has long been a center of conservatism in Iranian politics and where the ayatollahs’ 1979 Islamic Revolution first gathered pace. Protesters there forced storekeepers to close down their shops.

At the end of last year, similar economic protests roiled Iran and spread to some 75 cities and towns, becoming the largest demonstrations in the country since its 2009 disputed presidential election. The protests in late December and early January saw at least 25 people killed and nearly 5,000 arrested.

However, those protests largely struck Iran’s provinces as opposed to Tehran itself. Analysts believe conservative elements in the regime may have encouraged the first protest that took place in Mashhad to try to weaken President Hassan Rouhani, considered a moderate member of the ruling ayatollah class. The protests then spiraled out of control, with people openly criticizing both Rouhani and Supreme Leader Ayatollah Ali Khamenei.

The slogans heard at Monday’s rallies mark a shift in Iranian street protests, where “Death to Israel” and “Death to America” are commonly heard. The protests signaled widespread unease in the wake of US President Donald Trump’s decision to withdraw America from Iran’s nuclear deal with world powers and restore sanctions on the country.

According to Hadashot TV news’s veteran Middle East analyst Ehud Ya’ari, Monday’s protests marked the first time that Iranians have chanted “Death to Palestine” during anti-regime protests.

In the last six months, Iran’s currency has lost almost 50 percent of its value, with the US dollar now buying around 85,000 rials on the open market.

Apart from the rial’s collapse, the Iranian private sector has long been starved of investment, its banking system is crippled by bad loans and record levels of unemployment mean a third of under-30-year-olds are out of work.

A group of protesters chant slogans at the old grand bazaar in Tehran, Iran, June 25, 2018. (Iranian Labor News Agency via AP)

Rouhani’s government has struggled with the economic problems, including high unemployment. A government-set exchange rate of 42,000 rials to $1 has generated a vibrant black market. On Monday, state television quoted Iranian Central Bank chief Valiollah Seif as saying the government plans to create a parallel market next week to combat the black market.

Meanwhile, some conservatives have called for new elections or for Rouhani’s civilian government to be replaced by a military-led one. The Fars news agency, believed to be close to Iran’s paramilitary Revolutionary Guard, made a point Monday of publishing an article from the Sobh-e No daily newspaper describing the government as being ready to “bow down to foreign threats and sit at the negotiation table.”

Eshaq Jahangiri, Iran’s first vice president, was quoted Monday as saying, “We’re on the verge of an economic war by an economic terrorist,” referring to the US.

“Conditions will get worse in future,” Jahangiri said, according to the pro-reform Etemad daily newspaper. “Even our friends and neighbors like Russia, China and Europeans can’t help us today.”

Agencies contributed to this report.

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