Political Fallout

In some ways, therefore, Iran’s economic conditions today are more dire than they were when the sanctions were imposed the first time around. And so the political consequences may be more dramatic.

President Hassan Rouhani came to power in 2013 as a reformer, focused specifically on revamping the economy. He promised to implement measures that would cure some of the negative economic consequences of Ahmadinejad’s policies. (Indeed, inflation rates have dropped under Rouhani, though they remain high overall.) Part of Rouhani’s plan to make this happen was to work with the West to seek sanctions relief. Expectations were high, and when sanctions were lifted, people believed the benefits would trickle down to the public at large.

But those expectations turned out to be misplaced. GDP growth stemming from sanctions relief came primarily from greater oil and petroleum sales, which benefited the small portion of the country that controlled oil-related assets, namely the Islamic Revolutionary Guard Corps and other elites. Profits were then used in part to intervene in conflicts throughout the Middle East. This is why protests in recent months against deteriorating economic conditions have featured slogans like “death to Syria” and “death to Palestine.”

Protests in the past few days have also featured chants of “death to inflation” and “death to unemployment.” Despite its best efforts, the government hasn’t convinced Iranians that the U.S. is responsible for their economic woes. Since large-scale protests broke out at the end of 2017, demonstrators have instead criticised Tehran’s mismanagement of the economy.