Whiplash In Iran As US Sanctions Resume

With the nuclear deal in tatters, Iran faces an uncertain future.

- Ladane Nasseri, Golnar Motevalli, And Arsalan Shahla

In the runup to the Aug. 7 resumption of U.S. sanctions against Iran, the country’s beleaguered president, Hassan Rouhani, got stern directives from a few corners of the Islamic Republic. Iran’s Supreme Leader, Ali Khamenei, urged him to deal with corruption. The powerful Revolutionary Guards commander told him to focus on Iran’s slumping currency, the rial, while a sizable chunk of Parliament summoned Rouhani to harangue him about the sinking economy. None of them, however, had any advice on how to ease the growing sense of despair and outrage in the streets.

Over the past few weeks, record temperatures, power outages, and water shortages, along with a 50 percent rise in the price of some food items, have triggered scattered protests. One person was killed and 20 others detained in the city of Karaj, west of Tehran, in a protest on Aug. 3. In a nearby town, about 500 people used stones and bricks to smash the windows of a seminary and tried to set the building on fire, local media reported.

As bad as things are, they’re likely to get worse. The new sanctions ban purchases of U.S. dollars by Iran and prevent the trade of gold, metals, and automobiles. Their mere prospect has fueled a record crash in the value of the rial, down 70 percent since May. Government attempts to stabilize the currency by pegging it at a set rate to the dollar backfired and ended up speeding its decline. The real pain, however, will hit in November, when the U.S. reimposes sanctions on Iran’s oil industry, the economy’s lifeblood, in a bid to bring the country back to the table to renegotiate the 2015 nuclear accord.