Iranians are under no illusions about a regime that has squandered its resources to spread terror

From a collapsing economy to street protests, Iran's rulers are confronting a crisis of their own making, writes Con Coughlin

Tehran's old grand bazaar was closed as people protested in the streets over the economic situation. EPA / STR

Ever since Iran's Green Revolution in 2009, the ruling regime has been desperate to crush any hint of dissent to its authoritarian rule. Nine years ago, this took the form of units from the Republican Guard Corps and the Basij, the so-called people's militia, being deployed to confront the pro-democracy protesters who had taken to the streets in their tens of thousands to vent their anger at president Mahmoud Ahmadinejad's surprise election victory, which many believed had been rigged.

The official death toll from the regime’s brutal suppression of the Green Revolution is hard to estimate, not least because many of those detained during the protests were subsequently tried on a variety of different charges, from indulging in un-Islamic activities to outright treason. But human rights organisations put the death toll in the thousands, with many of those who perished dying of injuries sustained after being subjected to torture in the regime’s infamous detention facilities.

While the methods might have been uncompromising, they did nonetheless succeed in achieving the regime's goal of crushing the revolt, thereby silencing the voices that rose against the ayatollahs' authoritarian rule. And that, by and large, is how the situation has remained, apart from a brief uprising in 2012 that was suppressed using the same ruthless tactics.

But now the protesters are back, as shown by this week's dramatic scenes at the Iranian majlis, or parliament, when the police were obliged to use tear gas against demonstrators who had marched on the parliament building to express their deep dissatisfaction over the government's handling of the current economic crisis.

Of even more concern for the ayatollahs should be the closure of Tehran’s Grand Bazaar, the country’s economic centre where Iran’s 1979 Islamic revolution originated. The bazaaris have long been considered one of the most influential constituencies in Iran, having the ability to make or break governments, be they run by Shahs or ayatollahs.

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And the fact that the bazaaris now appear to be bringing their considerable weight to bear on the latest wave of protests is a development the ruling regime should regard with alarm. At the root of the new political turbulence lies the dire state of the country’s economy, a crisis that, to a large extent, is self-inflicted.

The economic effects of US President Donald Trump's decision to withdraw from the nuclear deal – taken in response to Tehran's failure to comply with the spirit of the agreement – is now having a serious impact on the Iranian economy, with the rial exchange rate falling to around 90,000 to the dollar on Iran's thriving black market this week. This compares with a rate of 65,000 rials before Mr Trump's announcement in May.

The official exchange rate is 42,000 rials, but the dire shortage of foreign exchange, one of the main consequences of Mr Trump’s decision to quit the nuclear deal, means that ordinary Iranians are increasingly forced to deal on the black market.

Iran’s worsening economic predicament has already led to sporadic protests taking place in towns and cities around the country. In all, there have been demonstrations in around 75 cities and towns – the largest protest seen since 2009, and activists say at least 25 people have been killed and 5,000 arrested.

Now the protests have moved to the Iranian capital, and the message emanating loud and clear from the protestors is that they want to see a radical change in policy from their government, one where the regime stops wasting billions of dollars on its overseas military adventures and instead concentrates its efforts on rebuilding the Iranian economy.

That, after all, was the main driving force behind Iran's decision to enter negotiations with a number of leading world powers on its nuclear programme. Indeed, Iranian president Hassan Rouhani's election in 2013 owed much to his promise to repair relations with the West and get the punitive economic sanctions lifted.

And to that end, the 2015 nuclear deal could be deemed a success. In return for Iran scaling down its nuclear activities, the sanctions were lifted and the regime was given the opportunity to restore the country’s economic well-being. But instead of concentrating its efforts on domestic policy, the regime instead decided to invest much of the estimated $150 billion it received from the sanctions being lifted in numerous overseas adventures in countries such as Syria, Iraq and Yemen.

Yet, for all the money Iran has spent on its foreign interventions, Tehran has little to show for its multi-billion dollar investment. In Syria, for example, the Iranians are under intense pressure to dismantle the military infrastructure they have constructed while spending $35 billion annually defending the president, Bashar Al Assad.

It is a similar picture in Yemen, where fighters from Hezbollah, on whom Iran has spent an estimated $700 million a year, are fighting alongside Houthi rebels. The Arab-led coalition's efforts to recapture the vital port of Hodeidah have inflicted a serious defeat against the Iranian-backed Houthi rebels, making many Iranians question the wisdom of backing them in the first place.

By re-imposing economic sanctions against Iran, the Trump administration no doubt hopes they will have the same sobering effect on Tehran as they have had on North Korea, where the threat or renewed economic hardship –together with the Trump administration's very serious threat to launch military action to destroy Pyongyang's nuclear weapons programme – persuaded North Korean dictator Kim Jong-un to enter peace talks.

The uncompromising nature of Iran’s Islamic revolution, as well as the regime’s visceral anti-Americanism, suggests that a similar resolution of the long-standing hostility between Tehran and Washington is unlikely.

Any failure, though, by Tehran to resolve the diplomatic stand-off with the Trump administration over the nuclear deal and get the sanctions lifted could have serious repercussions. The country’s increasingly restless population are under no illusions about who is really to blame for the country’s dire economic plight.

Con Coughlin is the Daily Telegraph’s defence and foreign affairs editor