Update from AIJAC

June 29, 2018

Update 06/18 #05

This Update deals with the growing unrest on the streets of Iran in recent weeks, principally over economic matters, and the potential implications of this unrest for international policies to contain Iran’s regional aggression, support for terrorism, and efforts to construct weapons of mass destruction.

We lead with a general summary and analysis of the state of play of the Iranian protests, and the wider economic problems which sparked them, from Israeli strategic analyst Lt. Col. (ret) Michael Segall. Segall notes the recent spread of the protests to the traders of Teheran’s Grand Bazaar, the government’s responses and the reality that economic conditions and dramatic falls in the Iranian currency, the Rial, are not likely to improve. He also notes, however, that conservative forces in Iran are among those trying to capitalise on the unrest against the Rouhani government. For this good primer on what is happening in Iran and why it matters,  CLICK HERE.

Next up is an interview from the Jerusalem Post with Prof. David Menashri, Israel’s top academic expert on Iranian politics. Menashri, who lived in Iran during the 1970s, see some fairly close parallels between what is going on now in Iran and events leading up to the 1979 revolution which overthrew the Shah and led to the present Islamist regime. While Menashri does not believe that regime change is imminent, he does argue that getting on top of Iran’s economic crisis must require pulling back from Iran’s policy of spending large amounts of money to project power abroad. For Menashri’s well-informed opinion in full, CLICK HERE.

Finally, American Middle East scholar Michael Rubin explores in more detail the significance of the Bazaar merchants joining the Iranian protests. He notes the Bazaar is not just a shopping district, but in Iranian and Middle Eastern culture is a “focal point of cultural, social, and economic activities.” He also explores how the loss of the support of Bazaar merchants during the Shah’s regime was a major trigger for the 1979 revolution, and today, like back then, signals the sharp decline of middle class support for the regime. For all the details of Rubin’s argument,  CLICK HERE.

• Israeli strategic analyst Brig.(ret ) Michael Herzog looks at the state of international efforts to pressure the Iranian regime over its rogue behaviour in the context of Iran’s domestic unrest and economic problems.
• Some more analysis of the Iranian regime’s current problems from Zvi Bar’el of Haaretz and American thinktanker Behnam Ben Taleblu. 
• American pundit Geneive Abdo argues that if Iran is counting on China to save it from the consequences of renewed US sanctions, it is not going to work.
• Three Iran experts explain what Western governments and publics can do to help encourage the protests in Iran.
• Israeli PM Binyamin Netanyahu, in a video message, uses Iranian success at the World Cup to encourage Iranians to oppose their government and renew Israeli-Iranian ties.
• Dr Doron Itzchakov from the BESA Centre considers the extent to which Iran’s hostility towards Israel, expressed most notably on Quds day, is ideological or strategic.
• The transcript of an interview Jared Kushner, US President Donald Trump’s special adviser on the Middle East (and son in law) gave to the Palestinian newspaper Al Quds, in which he says that both sides will be better off under the peace deal he is working on, and expresses frustration with Palestinian President Mahmoud Abbas.
• The response of Palestinian leaders, who denounced the interview, accusing Kushner of incitement, and have also rejected US and Israeli ideas about improving the standard of living in Gaza, calling them a way of “undermining the Palestinian national project”.
• Israel’s parliament to vote on a bill deducting the amount paid by the Palestinian Authority to terrorists from tax revenues remitted to the PA, with the amount to go to compensate victims of Palestinian terrorism instead.
• The Gatestone Institute’s Bassam Tawil looks at what Prince William was not shown on his recent visit to the West Bank; the Palestinian Authority’s support for terrorism, contradicting the fine words about peace spoken by PA President Abbas.
• The Jerusalem Post editorialises that Mahmoud Abbas should step aside to give a chance to a new generation of Palestinian leaders, stating, “Ordinary Palestinians are paying the price for his lack of leadership and the policies of the oligarchs who surround him.”
• Video taken from a drone flying near Gaza shows the extent of the devastation caused by the 400+ fires started by incendiary kites and balloons launched from the strip.
• Washington Institute Turkey expert Soner Cagaptay looks at the potential aftermath of the recent Turkish election, noting that President Erdogan relied on the support of the far-right Nationalist Movement Party (MHP) for his victory, with potentially dangerous consequences.
• AIJAC’s Naomi Levin examines the latest signs of problems with Australian aid to the Palestinians – following a new allegation that Australian taxpayer funds were paying the salary of a leader of the banned terrorist group the PFLP through the trade union aid agency APHEDA.

Article1

Iran’s Regime Faces Widespread Economic and Political Unrest

Lt. Col. (ret.) Michael Segall

Caricature by the Fars news agency, criticizing the president for taking a vacation at a luxury resort while the Iranian currency rate crashes and the economy is in a serious crisis.

Since June 24, 2018, protests have been taking place in several main cities in Iran. This time, the protesters were mainly comprised of traders from the Bazaar in Tehran and other commercial locations throughout Iran. The bazzaris initially protested the sharp and fast fall in the value of the Iranian currency, the rial, in dollar terms, the freeze in Iran’s economic activity, and the rising cost of imported goods.

The decline of the Iranian economy gathered speed, and it is expected to suffer even more due to President Trump’s May 8, 2018, announcement that the United States was pulling out of the nuclear deal, the re-imposition of sanctions on Iran, and the notice of several large international corporations that they intend to stop doing business with Iran and/or not sign any new contracts.

The main protest centered on the huge Grand Bazaar in Tehran, where the merchants closed their stores and marched toward the Parliament (Majlis) building to protest against the government’s economic policies. The metro station serving the Bazaar was closed because of the protest. Closing stores and halting trade happened in several other large cities, including Tabriz, Mashhad, Arak, Kermanshah, and Isfahan. Additionally, in the free trade zone on the island of Gheshm at the entrance to the Strait of Hormuz, merchants closed their stores and joined the strike.

Hashtag announcement of protests

The social networks were flooded with hashtags from bazaaris calling for more people to join the national strike #اعتصابات_سراسری).). The hashtag ( #ساعت_6 ) widely appeared. It gave the time to start demonstrating at 6:00 PM, when people should swarm into the streets. It was presented in different variations, with clear symbols and slogans of the opponents of the regime. Demonstrators chanting “Death to Khamenei” and “Death to Palestine” (#مرگ_بر_فلسطین), in defiance of Iran’s foreign adventures at the expense of the Iranian people, were uploaded to social network accounts. At the same time, Iranian virtual platforms also dealt with unemployment, economic hardships, and the ongoing water crisis that has hit different areas in the country.

Conservatives Use the Protests to Taunt the Government
Conspicuously, the conservative media outlets, which usually don’t cover anti-government protests, have been following the traders’ protests. Apparently, it is so they can taunt the government and its economic failings. The secretary-general of the traders’ guild of the Tehran Bazaar, Ahmad Karimi Isfahani, pointed an accusing finger at the government and said, “We expect President Rouhani and his government to admit that the steps they have taken connected with anything to do with the Iranian economy were a mistake” and that the protest began due to a lack of economic stability, the deepening economic crisis, and the apathy of the government toward the population and the traders.

The Iranian security forces, and primarily the units for dispersing protests, were deployed in the streets of Tehran in order to contain the events, but until June 26, they generally refrained from using force to disperse the demonstrators and relied on teargas grenades.

The value of the rial against the dollar 

The government, for its part, acted to bring down the value of the dollar as compared with local currency and to deal with foreign currency offenders. The governor of the Central Bank of the Islamic Bank of Iran, Valiollah Seyf, announced that Iran would open a “parallel/secondary market” for trading in foreign currencies at fixed rates (42,000 rials = 1 U.S. dollar) to help the private sector import goods valued in dollars and prevent wild currency rates being set by uncertified brokers. In April, President Rouhani first imposed this rate to prevent any further fall in the value of the rial but without any success, and the dollar rate reached 85,000 rials or more.

During the current crisis, President Rouhani instructed authorities to reveal the names of those importers who have received foreign currency at subsidized rates but sold their merchandises at free-market prices. Rouhani blamed U.S. sanctions for the crisis at a gathering in Tehran on June 26, 1018, and insisted that there is no shortage of currency and goods in the market. Supreme National Security Council (SNSC) Secretary Ali Shamkhani, said that profiteer groups (mainly in the mobile phone market) and currency smugglers would be monitored. Judiciary chief, Ayatollah Sadeq Amoli Larijani, lambasted those who are “disrupting the economy” by funneling their huge assets into foreign currency, threatening they will be designated as “corrupted on earth (punishable by death).” Amoli urged the police to identify those who disrupt the market, saying they commit “treason against the system and the nation.” The Majlis‘ National Security and Foreign Policy Committee discussed the recent economic fluctuation during its latest meeting on June 25, 2018.

The Iranian media has dealt with the economic crisis in depth, as well as the solutions offered by the government. Essentially, much of the criticism was directed at President Rouhani who, “to the surprise of the public,” chose to spend his vacation at the luxury Tochal mountain resort in north Tehran in the middle of an economic crisis, while the traders and public opinion are waiting for a solution to the economic problems and price rises.

Even the president’s western-style apparel has been subject to criticism. For example, he was seen wearing Western-brand apparel – an Under Armour sweatshirt and a Puma hat. The headline of the Vatan Emrooz newspaper on June 25, 2018, shows the president dressed in western sports clothing, and it shrieks, “The economy is on the verge of the abyss, and Rouhani is in Tochal.”

Rouhani in his Western-Style “Under Armour” Attire

The Situation Is Only Getting Worse
Economic stabilization in Iran is not yet visible on the horizon. The protest of the bazaar traders is just one example of the many different demonstrations that have taken place throughout Iran in recent times (truck drivers, teachers, laborers, and protests about pollution and the lack of water). This process was accelerated when President Trump decided to pull out of the nuclear deal with Iran, and all the immediate ramifications of this upon the Iranian economy occurred. The regime’s recent steps toward what Khamenei termed in 2017 the “Year of Economy of Resistance” or “resistive economy” to circumvent sanctions are likely to have a negative effect on the citizens of Iran with more bans on imported goods.

Traders’ strike in the huge Tehran Bazaar, with its 10-kilometre long corridors

A Perfect Storm?

At the same time, the protest by the traders at the bazaar – the beating heart of Iran’s economy, at least in the past – is unique and a warning light for the Iranian regime. The bazaar protest originally was not against the Islamic government. It was focused upon Iran’s growing and genuine economic hardships due to the sanctions on the country that are already affecting it. The protest is authentic, and it reflects the difficulties of the traders at the bazaar (mainly those who buy in dollars) and the Iranian citizen, who finds it hard to buy goods due to rising prices. At the same time, the protest did not occur in a vacuum, and it adds to the general feeling of discontent – not only at the economic level – with the Islamic regime (and not only against the government as the conservatives try to portray).

Senior hardline government officials and written and conservative broadcast media outlets have been quick to use the bazaar protest against the Rouhani government and its economic shortcomings. Some continue to blame the government for the agreement on nuclear negotiations and its temporary compromise on Iran’s nuclear capabilities. Khamenei’s advisor, Yahya Rahim Safavi, a Revolutionary Guard commander and presently the Supreme Leader’s hardline adviser on security affairs, has written in the past that the country would be better without any government (an expression that was later removed from the conservative media.)

The bazaaris are not necessarily aligned with the sworn opponents of the regime, despite the continued erosion of their position by the Revolutionary Guards’ substantial economic conglomerate. Meanwhile, the economy of the Revolutionary Guard is strengthening through smuggling and the eviction of the established, traditional class of the traders. At the same time, the bazaar has been part of every revolution that has occurred in Iran, and given the appropriate opportunity, the emergence of a united leadership, and a clerical support base, it may join a new revolution.

Right now, a perfect storm does not appear to be on the horizon. As the sanctions increase and go into effect and the economic crisis worsens, circumstances may be created that could undermine the current stability of the regime. As opposed to the “gentle” pushing out of the traders’ protests, the regime would not hesitate to use all of its powers of suppression, such as they did at the events of the “Green Protest” in 2009, led by Mir-Hossein Mousavi and Mehdi Karroubi, who are presently still under house arrest.

IDF Lt.-Col. (ret.) Michael (Mickey) Segall, an expert on strategic issues with a focus on Iran, terrorism, and the Middle East, is a senior analyst at the Jerusalem Center for Public Affairs and at Alcyon Risk Advisors.

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Article 2

Echoes of the revolution, but will Iran’s protests bring down the regime?

By SAMUEL THROPE

Jerusalem Post, 06/26/2018

“It was a revolution for bread and liberty, welfare and freedom”

Widespread demonstrations protesting the deteriorating economic situation continued throughout Iran on Tuesday.

Pictures and video posted to social media and news websites show thousands of demonstrators marching past striking merchants’ shuttered stores – even in Tehran’s central bazaar, a bastion of religious conservatism in the cosmopolitan capital – and closed shops in Kermanshah and Tabriz as well. Police fired tear gas at demonstrators approaching the parliament building in the capital, the BBC and other media outlets reported.

For Professor David Menashri, Founding Director of the Alliance Center for Iranian Studies at Tel Aviv University and a leading expert on Iran, this news has a familiar resonance.

“Two years before the Islamic Revolution, I lived in Iran,” Menashri told The Jerusalem Post. “I saw what was bothering the Iranian people. The country was rich and the people were poor. And it’s repeating now.”

Scenes from the 1979 revolution in Iran. Academic expert David Menashri, who lived in Iran during the 1970s, says the same problems that dogged the Shah’s regime are sparking the latest unrest.

“It was a revolution for bread and liberty, welfare and freedom,” he said. “Forty years later, there is no greater liberty or more freedom in Iran today than there was under the Shah – which was no democracy. Under the Shah to act or speak against the government was a crime; today it is a sin.”

This week’s demonstrations, the biggest in Iran since 2009, were sparked by rising prices and the plummeting value of Iran’s currency, the rial. It sank as low as 90,000 against the dollar in the unofficial market on Monday from 87,000 on Sunday and around 75,500 last Thursday, according to foreign exchange website Bonbast.com. At the end of last year, the rial stood at 42,890.

While Iran’s economic woes have become more severe in the wake of renewed US sanctions and President Donald Trump’s decision to withdraw from the 2015 nuclear accords, Menashri says that Iran’s problems run deeper.

“It is easy to attribute everything to American policy,” he said. “But even if you had all these sanctions removed, the economic situation would not be good.” Iran’s military involvement in the civil war in Syria, as well as in Lebanon, Iraq and Yemen, and the country’s support for Hamas, have used up much of the influx of funds that Tehran received after signing the nuclear accords, Menashri said.

“Iranians know that a great deal of their economic misery is also because of mismanagement and corruption inside the country, because of priorities they don’t share,” he said.

Despite the fact that Iran’s parliament and president are popularly elected, and President Hassan Rouhani won a second term handily last year, Menashri explained that the elected government does not set the country’s economic priorities.

“In Iran, the president is only a president,” Menashri said. “I believe that Rouhani would have liked to have a different regional policy for Iran, but he doesn’t have a say. And with the withdrawal of the United States from the deal, the power of the conservatives, Supreme Leader Ali Khamenei and the Revolutionary Guards, that control much of the economy, is much more than it used to be.”

However, although observers abroad have predicted that these and earlier protests could lead to the overthrow of the Islamic Republic, Menashri is skeptical.

“It is possible that one of these cycles will expand and lead to that,” he said. “Ultimately, it will happen. The ground is ready, the displeasure is deep. But to come out with a larger movement, you need the intelligentsia and the underprivileged joining a movement together, as it was during the Islamic Revolution.”

Iranian politics expert Prof. David Menashri

During Menashri’s time in Iran on the eve of the 1979 revolution, economic problems also played a major role in the unrest leading up to the overthrow of leader Muhammad Reza Shah Pahlavi.

“The difference is that [then,] there were 37-38 million people, but today Iran is a country of more than 80 million people,” Menashri said. “To deal with the economic problems of a country the size of Iran today is much more difficult… it requires significant change in the priorities of the government – and to focus inside the country, rather than on policies of projecting power beyond the borders.”

Juliane Helmhold contributed to this report.

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Article 3

In Iran, revolution is starting in the bazaar

by Michael Rubin

Washington Examiner, June 25, 2018 05:02 PM

The Tehran bazaar isn’t simply a traditional market in a city where shopping malls are becoming increasingly common, nor is it a tourist attraction. (Iranian Labor News Agency via AP)

The demonstrations which began in Iran on Dec. 28, 2017, have never completely petered out. Every few days, protesters seemingly spontaneously take to the streets in a different city or province motivated less by high politics than accumulated frustration with 40 years of corruption, repression, and failed economic promise.

Today, however, the slow motion uprising in the Islamic Republic took a new turn. Crowds have marched through the streets chanting “Marg bar Filistin” (Death to Palestine!), voicing their frustration at the priorities of an unelected leadership which prefers to transfer billions of dollars to a conflict in which Iran has no natural interest while many Iranians go hungry.

More significant, however, is the general strike which on Monday closed the Tehran bazaar. Here, for example, are bazaar merchants marching while chanting against Supreme Leader Ali Khamenei.

#Tehran bazaar protests target Khamenei: “We don’t want an incompetent Supreme Leader, we don’t want it.” #بازارتهران pic.twitter.com/1qABjtuvyF
— Farnaz Fassihi (@farnazfassihi) June 25, 2018

The Tehran bazaar isn’t simply a traditional market in a city where shopping malls are becoming increasingly common, nor is it a tourist attraction. Rather, as former parliamentary speaker Abdollah Nategh-Nouri once explained, “The bazaar in Islamic culture has always been regarded as a focal point of cultural, social, and economic activities.” In Tehran, especially, it has historic significance as the place where revolutions begin.

Consider Edward Browne, a British scholar and Orientalist who presented one of the best first-hand accounts of Iran during the first decade of the 20th century. In 1905, as the shah traveled to Russia, Browne noted, “The Shah’s journey created a bad impression in his capital … and the bazaars were closed for five days.” Most scholars date the beginning of Iran’s constitutional revolution that same year to a general strike in the bazaar that followed the police beating of several merchants in a dispute over sugar prices.

It was the loss of bazaari support that ultimately doomed populist Prime Minister Mohammad Mosaddegh a half-century later and enabled the CIA-sponsored coup to succeed. As the late Iran scholar James Bill wrote, “As Mosaddegh began to seek extraordinary political powers for himself … the bazaar and religious groups angrily departed the coalition…. The loss of the traditional middle class was a serious blow to Mosaddegh; it effectively cut his connections with the lower middle classes and Iranian masses.” In Answer to History, the Shah’s post-revolution memoir, he acknowledged that the anger of the bazaaris helped push revolution, though he argued that his efforts to modernize the institution was necessary.

Regardless, it is hard not to see the bazaaris believing they had the last laugh as their turn and embrace of the Islamic Revolution helped topple a 2,000-year-old monarchy. As for revolutionary leader Ayatollah Ruhollah Khomeini, he too understood the importance of the Tehran bazaar. In a Feb. 19, 1978 speech, he declared how the bazaar demonstrated popular support. “Even Tehran is ninety-percent closed, and it is no easy thing to close down Tehran,” he said. “With this kind of hullabaloo, they try to pretend that they have the support of the people. But this general strike is itself a living answer to them.”

Well, Mr. Khomeini, with the bazaaris denouncing your successor’s legitimacy, who has the support of the people now?

The Islamic Revolution was an accident of history, not the natural apex of Iranian political evolution. Like the Soviet Union and all other regimes that depend on repression rather than the consent of the governed, it is doomed to fail. The question has never been if, but when. And, increasingly, as regime officials send tens of billions of dollars outside the country, as Supreme Leader Ali Khamenei nears the end of his life, as the economy continues its death spiral, and as protests now spread to the Tehran bazaar, it seems that the answer to that question could be tantalizingly near.

Michael Rubin (@Mrubin1971) is a contributor to the Washington Examiner’s Beltway Confidential blog. He is a resident scholar at the American Enterprise Institute and a former Pentagon official.